UNITED THERAPEUTICS CORP, POS AM, 2000-03-30

UNITED THERAPEUTICS CORP
POS AM, 2000-03-30
PHARMACEUTICAL PREPARATIONS

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<PAGE> 1

AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON MARCH 30, 2000
REGISTRATION NO. 333-93853
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
------------------------
POST-EFFECTIVE
AMENDMENT NO. 1
TO

FORM S-1
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
------------------------

UNITED THERAPEUTICS CORPORATION
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)

DELAWARE
(STATE OR OTHER JURISDICTION OF
INCORPORATION OR ORGANIZATION)

2836
(PRIMARY STANDARD INDUSTRIAL
CLASSIFICATION CODE NUMBER)

52-1984749
(I.R.S. EMPLOYER
IDENTIFICATION NUMBER)

1110 SPRING STREET
SILVER SPRING, MD 20910
(301) 608-9292
(ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE, OF
REGISTRANT'S PRINCIPAL EXECUTIVE OFFICES)
------------------------
MARTINE A. ROTHBLATT
CHAIRMAN AND CHIEF EXECUTIVE OFFICER
UNITED THERAPEUTICS CORPORATION
1110 SPRING STREET
SILVER SPRING, MD 20910
(301) 608-9292
(NAME, ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE,
OF AGENT FOR SERVICE)
------------------------
Copies to:
LADAWN NAEGLE, ESQ.
BRYAN CAVE LLP
700 THIRTEENTH STREET, N.W.
SUITE 700
WASHINGTON, DC 20005
(202) 508-6000
FAX: (202)508-6200

APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC:
As soon as practicable after the effective date of this Registration Statement.

If any of the securities registered on this form are to be offered on a
delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, check the following box. [X]

If this form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, check the following box and
list the Securities Act registration statement number of the earlier effective
registration statement for the same offering. [ ]

If this form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ]

If this form is a post-effective amendment filed pursuant to Rule 462(d)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ]

If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [ ]

THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL
FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(a) OF
THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(a),
MAY DETERMINE.

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<PAGE> 2

SUBJECT TO COMPLETION
MARCH 30, 2000

PROSPECTUS

[UNITED THERAPEUTICS LOGO]

2,500,000 SHARES OF COMMON STOCK
(PAR VALUE, $.01 PER SHARE)

The selling stockholders are offering to sell 2,500,000 shares of United
Therapeutics' common stock. United Therapeutics will not receive any of the
proceeds from sales of these shares by the selling stockholders.

The selling stockholders acquired the offered shares directly from United
Therapeutics in a private placement dated as of December 22, 1999. The selling
stockholders may sell the shares at prices determined by the prevailing market
price for the shares or in negotiated transactions. The selling stockholders may
also sell the shares to or with the assistance of broker-dealers.

United Therapeutics' common stock is traded on the Nasdaq National Market
under the symbol "UTHR." On March 27, 2000, the closing bid price of the common
stock as reported on the Nasdaq National Market was $82.25 per share.

BEFORE BUYING ANY SHARES YOU SHOULD READ THE DISCUSSION
OF MATERIAL RISKS OF INVESTING IN COMMON STOCK IN
"RISK FACTORS" BEGINNING ON PAGE 4.

NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES
COMMISSION HAS APPROVED OR DISAPPROVED OF THESE SECURITIES OR DETERMINED IF THIS
PROSPECTUS IS TRUTHFUL OR COMPLETE. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.

The date of this prospectus is March , 2000.
<PAGE> 3

TABLE OF CONTENTS

<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Prospectus Summary.......................................... 1
Risk Factors................................................ 4
Use of Proceeds............................................. 11
Market Price of Common Stock................................ 11
Capitalization.............................................. 11
Selected Consolidated Financial Data........................ 12
Management's Discussion and Analysis of Financial Condition
and Results of Operations................................. 13
Business.................................................... 17
Management.................................................. 35
Certain Transactions........................................ 44
Principal Stockholders...................................... 45
Selling Stockholders........................................ 46
Plan of Distribution........................................ 47
Description of Capital Stock................................ 48
Lawyers..................................................... 50
Experts..................................................... 50
Additional Information...................................... 50
Index to Consolidated Financial Statements.................. F-1
</TABLE>
<PAGE> 4

PROSPECTUS SUMMARY

You should read the following summary together with the more detailed
information and financial statements and related notes appearing elsewhere in
this prospectus. This prospectus contains forward-looking statements. The
outcome of the events described in these forward-looking statements is subject
to risks, and actual results could differ materially. The sections entitled
"Risk Factors," "Management's Discussion and Analysis of Financial Condition and
Results of Operations," and "Business" contain discussions of some of the
factors that could contribute to these differences.

United Therapeutics Corporation develops pharmaceuticals to treat vascular
diseases, including pulmonary hypertension and peripheral vascular disease, as
well as selected other chronic conditions. Both pulmonary hypertension and
peripheral vascular disease are characterized by reduced production of natural
prostacyclin, a highly unstable molecule that has powerful effects on
blood-vessel health. United Therapeutics' lead products, UT-15, also known as
Uniprost, and beraprost, are stable synthetic forms of prostacyclin. Uniprost is
delivered under the skin, or "subcutaneously," and United Therapeutics has
completed its pivotal Phase III clinical study of Uniprost for treating advanced
pulmonary hypertension. Beraprost is delivered orally, and United Therapeutics
is beginning a Phase III clinical trial program to treat early-stage peripheral
vascular disease.

Pulmonary hypertension is a progressive, life-threatening disease that is
difficult to diagnose and treat and is currently incurable. It is characterized
by high pressure in the blood vessels between the heart and lungs, but normal
blood pressure in the rest of the body. The advanced form of pulmonary
hypertension afflicts approximately 55,000 people in North America and Europe,
and United Therapeutics believes that the potential market for Uniprost to treat
these patients is approximately $2.5 billion. The FDA has approved only one drug
treatment for advanced pulmonary hypertension. Flolan(R), an intravenous
infusion of prostacyclin, was approved in 1995 to treat primary pulmonary
hypertension, a small subset of advanced pulmonary hypertension. Flolan is
marketed by Glaxo Wellcome Inc. Flolan is an effective therapy, but has numerous
significant drawbacks. For example, Flolan has a short half life in the body
which increases the risk of an abrupt recurrence of hypertension and death if
its delivery is interrupted for even a short period of time. Additionally,
Flolan must be continuously infused through a catheter surgically implanted in
the patient's chest, creating a risk of life-threatening sepsis infections.
United Therapeutics believes that Uniprost overcomes the safety and
quality-of-life drawbacks associated with Flolan therapy and will provide
patients with a safe, convenient, non-intravenous form of life-long prostacyclin
therapy.

In October 1998, United Therapeutics completed a 26-patient, eight-week
clinical trial for Uniprost in primary pulmonary hypertension patients. Results
from this trial demonstrated that Uniprost can be safely administered to
severely ill patients on an outpatient basis, and also showed that continuous,
subcutaneous dosing of Uniprost leads to improvements in pulmonary blood
pressure and exercise ability. Patients receiving Uniprost in this study
experienced improvements similar to those achieved by patients receiving Flolan
therapy for 12 weeks. Each patient who finished this study elected to receive
Uniprost therapy indefinitely.

In March 2000, United Therapeutics completed an international, randomized,
placebo-controlled, double-blind study of Uniprost involving a total of 470
patients with pulmonary hypertension. On March 27, 2000, United Therapeutics
announced the unblinding of the data from that study. Based on preliminary
analyses of the unblinded data, which are subject to continuing review and
analyses, the study shows that patients who received Uniprost demonstrated a
statistically significant improvement in their ability to exercise, the primary
endpoint of the study. The preliminary analyses also show that the patients who
received Uniprost had highly statistically significant improvement in pulmonary
blood pressure and in the signs and symptoms of the disease. All patients in the
pivotal study had the option to continue or commence Uniprost in an open-label
study after completion of the 12-week study. Approximately 500 patients are now
being treated with the drug, including additional patients who enrolled directly
into the open-label study. United Therapeutics is preparing a new drug
application and market authorization application for Uniprost which it expects
to complete and submit to the FDA during the third quarter of 2000. European
filings are also expected in the third quarter of this year, with other
international filings to follow.

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United Therapeutics is beginning a Phase III clinical trial program for
beraprost for treating early-stage peripheral vascular disease in the United
States. Peripheral vascular disease is characterized by the progressive
degradation of the circulatory system in the legs and affects over six million
people in the United States and a similar number in Europe. Peripheral vascular
disease results in over 200,000 amputations and more than $12 billion in medical
costs annually. Clinical testing outside the United States has demonstrated that
peripheral vascular disease is amenable to prostacyclin therapy. Beraprost was
approved for the treatment of peripheral vascular disease in Japan in 1994 and
generated 1998 sales of over $225 million for Toray Industries, Inc., the
developer of the compound, and its licensees. In December 1998, Hoechst Marion
Roussel, Inc., the European licensee of beraprost, submitted a regulatory
application for beraprost to treat peripheral vascular disease in Europe.

United Therapeutics is undertaking additional clinical studies. Uniprost is
in Phase II clinical trials to treat late-stage peripheral vascular disease, and
United Therapeutics is beginning a Phase III clinical trial program for
beraprost to treat early-stage pulmonary hypertension. United Therapeutics
believes that beraprost's current oral formulation will be complementary to
Uniprost because this formulation cannot provide the constant therapeutic levels
of prostacyclin in the body necessary to treat advanced pulmonary hypertension
and late-stage peripheral vascular disease effectively. United Therapeutics is
beginning a Phase II clinical trial program for UT-77, a compound for the
treatment of chronic obstructive pulmonary disease. Finally, United Therapeutics
is beginning a Phase III clinical trial program for Ketotop, a patch that
delivers the FDA-approved anti-inflammatory pain reliever ketoprofen, for the
treatment of osteoarthritis.

United Therapeutics believes that it has assembled the preeminent group of
scientists and clinicians in the field of pulmonary vascular medicine. Members
of United Therapeutics' scientific advisory board have won the Nobel Prize for
the discovery and characterization of prostacyclin, discovered Flolan and
invented UT-15, now Uniprost. Members of United Therapeutics' senior management
led the team at Burroughs Wellcome Co. that designed the clinical trials for,
obtained FDA approval of and commercialized Flolan. These executives have
similarly designed Uniprost's clinical trials, which have primary end points
identical to those used for the studies to approve Flolan. United Therapeutics
believes this expertise will be instrumental in the development and
commercialization of Uniprost, beraprost and its other products.

United Therapeutics also maintains a streamlined corporate infrastructure
that is focused on strategic business management. United Therapeutics outsources
the non-core aspects of its business where cost effective to substantially
reduce fixed overhead and capital investment, accelerate commercialization of
its products and reduce its business risk. For example, United Therapeutics
partnered with MiniMed Inc., the worldwide leader in subcutaneous
continuous-flow microinfusion devices. Under the terms of this strategic
alliance, in cooperation with United Therapeutics, MiniMed will market Uniprost
through a dedicated sales force, provide the pager-sized infusion device to
patients and train patients and care providers in its use.

United Therapeutics' objective is to become a leader in the development and
commercialization of drugs to treat pulmonary and vascular diseases, as well as
other selected chronic conditions. To achieve this objective, United
Therapeutics is pursuing the following strategies:

- Capitalize on its experience and expertise in pulmonary vascular
medicine;
- Establish its prostacyclin products as the standard of care for pulmonary
hypertension and peripheral vascular disease;
- Minimize fixed costs and corporate overhead through outsourcing and
partnering where cost effective; and
- Obtain licenses for, develop and commercialize selected other product
candidates.

United Therapeutics was incorporated in Delaware in June 1996 under the
name Lung Rx, Inc. Its principal office is located at 1110 Spring Street, Silver
Spring, Maryland 20910, and its telephone number there is (301) 608-9292. United
Therapeutics' clinical development office is located at 68 T.W. Alexander Drive,
Research Triangle Park, North Carolina 27709, and its telephone number there is
(919) 485-8350. United Therapeutics' manufacturing subsidiary, SynQuest, Inc. is
located at 225 West Harrison Street, Chicago, Illinois 60612, and its telephone
number there is (312) 421-1819. Information on United Therapeutics' web sites
are not a part of this prospectus.

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SUMMARY CONSOLIDATED FINANCIAL DATA

The following tables summarize the financial data for United Therapeutics'
business. The consolidated balance sheet data are presented as of December 31,
1999, and have been adjusted to reflect the sale of the 2,500,000 shares of
common stock to the selling stockholders and the application of the estimated
net proceeds of that sale to the company. See the consolidated financial
statements and related notes appearing elsewhere in this prospectus and
"Capitalization."

<TABLE>
<CAPTION>
PERIOD FROM
JUNE 26, 1996
(INCEPTION) TO YEAR ENDED DECEMBER 31,
DECEMBER 31, -----------------------------
1996 1997 1998 1999
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(IN THOUSANDS, EXCEPT PER SHARE DATA)
<S> <C> <C> <C> <C>
CONSOLIDATED STATEMENT OF OPERATIONS DATA:
Revenues........................................... $ 154 $ 116 $ 54 $ 436
Operating expenses:
Research and development......................... 100 2,027 11,015 30,715
General and administrative....................... 85 1,006 2,366 4,978
Cost of sales.................................... -- -- -- 164
------ ------- -------- --------
Loss from operations............................... (31) (2,917) (13,327) (35,421)
Net loss........................................... $ (30) $(2,901) $(12,835) $(33,507)
Basic and diluted net loss per share(1)............ $(0.02) $ (0.87) $ (1.54) $ (2.51)
Shares used in computing basic and diluted net loss
per share(1)..................................... 1,667 3,339 8,322 13,374
</TABLE>

<TABLE>
<CAPTION>
DECEMBER 31, 1999
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ACTUAL AS ADJUSTED
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(UNAUDITED)
<S> <C> <C>
CONSOLIDATED BALANCE SHEET DATA:
Cash, cash equivalents and short-term investments........... $ 51,596 $126,345
Total assets................................................ 59,943 134,692
Accumulated deficit......................................... (49,273) (49,273)
Total stockholders' equity.................................. 53,566 128,315
</TABLE>

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(1) See Note 2 of Notes to Consolidated Financial Statements for a description
of the computation of basic and diluted net loss per share.

This prospectus contains trademarks owned by other companies.

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RISK FACTORS

This offering involves a high degree of risk. You should carefully consider
the risks and uncertainties described below and the other information in this
prospectus before deciding whether to invest in United Therapeutics' common
stock. If any of the following risks actually occur, United Therapeutics'
business, financial condition or operating results could be materially adversely
affected. This could cause the market price of the common stock to decline, and
you may lose part or all of your investment.

IF UNITED THERAPEUTICS' PRODUCTS FAIL IN CLINICAL STUDIES, UNITED THERAPEUTICS
WILL BE UNABLE TO OBTAIN FDA APPROVAL AND WILL NOT BE ABLE TO SELL THOSE
PRODUCTS.

In order to sell its products, United Therapeutics must receive regulatory
approval for its products. To obtain those approvals, United Therapeutics must
conduct clinical studies demonstrating that the drug and the delivery mechanism
for the drug are safe and effective. If United Therapeutics cannot obtain FDA
approval for a product, that product cannot be sold and United Therapeutics'
revenues will suffer. United Therapeutics has completed its pivotal Phase III
clinical study for Uniprost for advanced pulmonary hypertension and has started
Phase II clinical studies for Uniprost for late-stage peripheral vascular
disease. United Therapeutics is beginning a Phase III clinical trial program to
treat early-stage peripheral vascular disease with beraprost and is beginning a
Phase III clinical trial program to treat early-stage pulmonary hypertension
with beraprost. United Therapeutics is still developing studies for its other
products and has only completed pre-clinical studies for a recently acquired
drug delivery mechanism. United Therapeutics' ongoing clinical studies might be
delayed or halted for various reasons, including:

- The drug is not effective, or physicians think that the drug is not
effective;

- Patients experience severe side effects during treatment;

- Patients die during the clinical study because their disease is too
advanced or because they experience medical problems that are not related
to the drug being studied;

- Patients do not enroll in the studies at the rate United Therapeutics
expects; and

- Drug supplies are not sufficient to treat the patients in the studies.

In addition, the FDA and foreign regulatory authorities have substantial
discretion in the approval process. The FDA and foreign regulatory authorities
may not agree that United Therapeutics has demonstrated that its products are
safe and effective.

IF UNITED THERAPEUTICS CANNOT MAINTAIN REGULATORY APPROVALS FOR ITS PRODUCTS, IT
CANNOT SELL THOSE PRODUCTS AND ITS REVENUES WILL SUFFER.

The process of obtaining and maintaining regulatory approvals for new drugs
is lengthy, expensive and uncertain. The manufacturing, distribution,
advertising and marketing of these products are subject to extensive regulation.
Any new product approvals United Therapeutics receives in the future could
include significant restrictions on the use or marketing of United Therapeutics'
products. Product approvals, if granted, can be withdrawn for failure to comply
with regulatory requirements or upon the occurrence of adverse events following
commercial introduction of the products. If approvals are withdrawn for a
product, United Therapeutics cannot sell that product and its revenues will
suffer. In addition, governmental authorities could seize United Therapeutics'
products or force United Therapeutics to recall its products. Finally, United
Therapeutics and its officers and directors could be subject to civil and
criminal penalties.

UNITED THERAPEUTICS HAS A HISTORY OF LOSSES AND MAY NOT BE PROFITABLE.

United Therapeutics has lost money since its inception in 1996, and its
accumulated deficit was approximately $49.3 million at December 31, 1999. United
Therapeutics expects to incur substantial additional losses over the next
several years, whether or not it generates revenue, as it expands clinical
studies

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and continues to develop its products. United Therapeutics expects its quarterly
and annual operating results to fluctuate, depending primarily on the following
factors:

- Timing of regulatory approvals and commercial sales of its products;

- Level of patient demand for its products;

- Timing of payments to licensors and corporate partners; and

- Timing of investments in new technologies.

United Therapeutics' products are in clinical studies and the related
regulatory approval process, and United Therapeutics is not yet selling any of
its products. United Therapeutics might not obtain regulatory approvals for its
products, including its lead products, Uniprost and beraprost, and may not be
able to sell its products commercially. Even if United Therapeutics sells its
products, United Therapeutics may not ever be profitable and may not be able to
sustain any profitability it achieves. See "Management's Discussion and Analysis
of Financial Condition and Results of Operations."

DISCOVERIES OR DEVELOPMENTS OF NEW TECHNOLOGIES BY OTHERS MAY MAKE UNITED
THERAPEUTICS' PRODUCTS OBSOLETE.

Other companies may conduct research, make discoveries or introduce new
products that render all or some of United Therapeutics' technologies and
products obsolete or not commercially viable. Researchers are continually
learning more about pulmonary and vascular diseases that may lead to new
technologies to treat the diseases. In addition, alternative approaches to
treating chronic diseases, such as gene therapy, may make United Therapeutics'
products obsolete or noncompetitive.

UNITED THERAPEUTICS' PRODUCTS MAY NOT BE COMMERCIALLY SUCCESSFUL BECAUSE
PHYSICIANS AND PATIENTS MAY NOT ACCEPT THEM.

Even if regulatory authorities approve United Therapeutics' products, those
products may not be commercially successful. United Therapeutics expects that
most of its products, including Uniprost, will be very expensive. Patient
acceptance of and demand for United Therapeutics' products will depend largely
on the following factors:

- Acceptance by physicians and patients of United Therapeutics' products as
safe and effective therapies;

- Reimbursement of drug and treatment costs by third-party payors;

- Pricing of alternative products;

- Convenience and ease of administration of United Therapeutics' products;
and

- Prevalence and severity of side effects associated with United
Therapeutics' products.

IF THIRD-PARTY PAYORS WILL NOT REIMBURSE PATIENTS FOR UNITED THERAPEUTICS' DRUG
PRODUCTS, SALES WILL SUFFER.

United Therapeutics' commercial success will depend in part on third-party
payors agreeing to reimburse patients for the costs of United Therapeutics'
products. Third-party payors frequently challenge the pricing of new drugs.
United Therapeutics expects that its products will be very expensive.
Third-party payors may not approve United Therapeutics' products for
reimbursement.

If third-party payors do not approve a United Therapeutics' product for
reimbursement, sales will suffer as patients will opt for a competing product
that is approved for reimbursement.

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UNITED THERAPEUTICS RELIES ON THIRD PARTIES TO DEVELOP, MARKET, DISTRIBUTE AND
SELL ITS PRODUCTS AND THOSE THIRD PARTIES MAY NOT PERFORM.

United Therapeutics does not have the ability to independently conduct
clinical studies, obtain regulatory approvals, market, distribute or sell its
products and intends to rely substantially on experienced third parties to
perform all of those functions. United Therapeutics may not locate acceptable
contractors or enter into favorable agreements with them. If third parties do
not successfully carry out their contractual duties or meet expected deadlines,
United Therapeutics will be unable to get marketing approvals and will be unable
to sell its products. MiniMed Inc. is United Therapeutics' exclusive partner for
the subcutaneous delivery of Uniprost using the MiniMed Inc. microinfusion
device in the field of pulmonary hypertension. United Therapeutics is relying on
MiniMed's experience, expertise and performance. If MiniMed is unsuccessful in
its efforts, United Therapeutics' revenues will suffer. See "The MiniMed
Strategic Alliance."

UNITED THERAPEUTICS HAS LIMITED EXPERIENCE WITH MANUFACTURING AND DEPENDS ON
THIRD PARTIES, WHO MAY NOT PERFORM, TO SYNTHESIZE AND MANUFACTURE MANY OF ITS
PRODUCTS.

United Therapeutics itself has limited experience with manufacturing. In
October 1999, United Therapeutics acquired SynQuest, Inc., a company that
manufactured Uniprost for United Therapeutics. Prior to this acquisition United
Therapeutics had no experience with manufacturing. Although in connection with
the acquisition of SynQuest, United Therapeutics retained the employees and
managers of SynQuest, United Therapeutics may be unsuccessful in developing and
maintaining drug manufacturing operations. United Therapeutics is highly
dependent on SynQuest's current management and key scientific and technical
personnel, including Dr. Robert M. Moriarty, President and Chief Scientific
Officer.

United Therapeutics relies on third parties for the manufacture of all its
other products. United Therapeutics is relying on Cook Imaging Corporation for
the formulation of Uniprost. United Therapeutics relies on Magellan Laboratories
Incorporated to test the purity and stability of each batch of Uniprost. United
Therapeutics relies exclusively on Toray Industries, Inc. to manufacture
beraprost and on Global Medical Enterprises Ltd. to supply Ketotop. United
Therapeutics' manufacturing strategy presents the following risks:

- The manufacturing processes for some of United Therapeutics' products
have not been tested in quantities needed for commercial sales;

- Delays in scale-up to commercial quantities could delay clinical studies,
regulatory submissions and commercialization of United Therapeutics'
products;

- A long lead time is needed to manufacture Uniprost, and the manufacturing
process is complex;

- United Therapeutics and manufacturers of United Therapeutics' products
are subject to the FDA's good manufacturing practices regulations and
similar foreign standards, and although United Therapeutics controls
compliance issues with respect to the work conducted by SynQuest, the
company does not have control over compliance with these regulations by
its third-party manufacturers;

- If United Therapeutics has to change to another manufacturing contractor
or abandon its captive manufacturing operations, FDA and comparable
foreign regulators would require new testing and compliance inspections
and the new manufacturer would have to be educated in the processes
necessary for the production of the affected product;

- Without satisfactory long-term agreements with its manufacturers, United
Therapeutics will not be able to develop or commercialize its products,
other than Uniprost, as planned or at all and will have to rely solely on
the manufacturing capacity the company acquired through SynQuest;

- Without substantial experience in operating a manufacturing facility,
United Therapeutics may not be able to successfully manufacture Uniprost;
and

- United Therapeutics may not have intellectual property rights, or may
have to share intellectual property rights, to many improvements in the
manufacturing processes or new manufacturing processes for its products.

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<PAGE> 10

Any of these factors could delay clinical studies or commercialization of
United Therapeutics' products, entail higher costs and result in United
Therapeutics being unable to effectively sell its products. See "Government
Regulation."

IF THE LICENSES UNITED THERAPEUTICS DEPENDS ON ARE BREACHED OR TERMINATED,
UNITED THERAPEUTICS WOULD LOSE ITS RIGHT TO DEVELOP AND SELL THE PRODUCTS
COVERED BY THE LICENSES.

United Therapeutics acquires or licenses drugs which have been discovered
and initially developed by others. In addition, United Therapeutics has obtained
and will be required to obtain licenses to third-party technology to conduct its
business, including licenses for its products and a license for the MiniMed
microinfusion device. This dependence on licenses has the following risks:

- United Therapeutics may not be able to obtain future licenses at a
reasonable cost or at all;

- If any of United Therapeutics' licenses are terminated, United
Therapeutics will lose its rights to develop and market some or all of
its products;

- The licenses that United Therapeutics holds generally provide for
termination by the licensor in the event United Therapeutics breaches the
license agreement, including by failing to pay royalties and other fees
on a timely basis;

- In the event that Glaxo Wellcome or Pharmacia & Upjohn terminate their
agreements, United Therapeutics will have no further rights to utilize
their patents or trade secrets to develop and commercialize Uniprost; and

- If licensors fail to maintain the intellectual property licensed to
United Therapeutics as required by most of United Therapeutics' license
agreements, United Therapeutics may lose its rights to develop and market
some or all of its products and may be forced to incur substantial
additional costs to maintain the intellectual property itself or force
the licensor to do so.

IF UNITED THERAPEUTICS' PATENT AND OTHER INTELLECTUAL PROPERTY PROTECTION IS
INADEQUATE, UNITED THERAPEUTICS' SALES AND PROFITS COULD SUFFER OR COMPETITORS
COULD FORCE UNITED THERAPEUTICS' PRODUCTS COMPLETELY OUT OF THE MARKET.

The U.S. patent for the UT-15 composition of matter expires in 2000, and
the U.S. patent for the method of treating pulmonary hypertension with UT-15
expires in 2009. The U.S. patents for the beraprost composition of matter and
synthesis expire in 2003 and 2010. United Therapeutics may not be able to extend
these or any other patents. Ketotop is patented in the United States, but not in
any other jurisdiction where United Therapeutics has marketing rights.
Competitors may develop products based on the same active ingredients as United
Therapeutics' products, including Uniprost, and market those products after the
patents expire, or may design around United Therapeutics' existing patents. If
this happens, United Therapeutics' sales would suffer and United Therapeutics'
profits could be severely impacted.

The issued beraprost patents do not cover methods of treating any disease,
including pulmonary hypertension or peripheral vascular disease, using
beraprost. The issued Ketotop patent in the United States does not cover methods
of treating osteoarthritis with Ketotop. Patents may be issued to others which
prevent the manufacture or sale of United Therapeutics' products. United
Therapeutics may have to license those patents and pay significant fees or
royalties to the owners of the patents in order to keep marketing its products.
This would cause profits on sales to suffer.

United Therapeutics has filed a patent application in the United States for
the use of UT-15 to treat peripheral vascular disease, but this and other patent
applications which have been or may be filed by United Therapeutics may not
issue. The scope of any patent that issues may not be sufficient to protect
United Therapeutics' technology. The laws of foreign jurisdictions in which
United Therapeutics intends to sell its products may not protect the company's
rights to the same extent as the laws of the United States.

In addition to patent protection, United Therapeutics also relies on trade
secrets, proprietary know-how and technology advances. United Therapeutics
enters into confidentiality agreements with its employees and
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others, but these agreements may not be effective in protecting the company's
proprietary information. Others may independently develop substantially
equivalent proprietary information or obtain access to United Therapeutics'
know-how.

Litigation, which is very expensive, may be necessary to enforce or defend
United Therapeutics' patents or proprietary rights and may not end favorably for
United Therapeutics. Any of United Therapeutics' licenses, patents or other
intellectual property may be challenged, invalidated, canceled, infringed or
circumvented and may not provide any competitive advantage to United
Therapeutics.

UNITED THERAPEUTICS MAY NOT HAVE, OR MAY HAVE TO SHARE RIGHTS TO, FUTURE
INVENTIONS ARISING FROM ITS OUTSOURCING AGREEMENTS AND MAY LOSE POTENTIAL
PROFITS OR SAVINGS.

Pursuant to the MiniMed agreement, any new inventions or intellectual
property that arise from United Therapeutics' activities with MiniMed will be
owned jointly by United Therapeutics and MiniMed. Under United Therapeutics'
agreement with Cortech, any inventions or intellectual property that relate to
UT-77 will be owned by the company that employs the person who made the
discovery. Under United Therapeutics' agreement with Shearwater Polymers, Inc.,
any inventions that relate to a non-prostacyclin pegylation method will be owned
by Shearwater Polymers, Inc. If United Therapeutics does not have rights to new
developments or inventions that arise during the terms of these agreements, or
United Therapeutics has to share the rights with others, United Therapeutics
will lose the benefit of the new rights which may mean a loss of future profits
or savings generated from improved technology.

IF UNITED THERAPEUTICS' HIGHLY QUALIFIED MANAGEMENT AND TECHNICAL PERSONNEL
LEAVE THE COMPANY, ITS BUSINESS MAY SUFFER.

United Therapeutics is highly dependent on its current management and key
scientific and technical personnel, including Ms. Martine A. Rothblatt, Chairman
of the Board and Chief Executive Officer, Dr. James W. Crow, President and Chief
Operating Officer, Dr. Gilles Cloutier, Executive Vice President, Business
Development and Treasurer, Shelmer D. Blackburn, Jr., Director of Operations,
Dr. Roger Jeffs, Director of Research, Development and Medical, and Dr. Robert
M. Moriarty, President and Chief Scientific Officer of SynQuest, Inc., United
Therapeutics' manufacturing subsidiary. United Therapeutics does not maintain
key person life insurance. United Therapeutics' success will depend in part on
retaining the services of its existing management and key personnel and
attracting and retaining new highly qualified personnel. Expertise in the field
of pulmonary and vascular disease is not generally available in the market, and
competition for qualified management and personnel is intense.

UNITED THERAPEUTICS MAY NOT SUCCESSFULLY COMPETE WITH ESTABLISHED DRUG
COMPANIES.

United Therapeutics competes with established drug companies for funding,
access to licenses, personnel and third-party collaborators and during product
development. Almost all of these companies have substantially greater financial,
marketing, sales, distribution and technical resources, and more experience in
research and development, clinical trials and regulatory matters, than United
Therapeutics. United Therapeutics is aware of existing treatments that will
compete with its products. If United Therapeutics cannot successfully compete
with new or existing products, United Therapeutics' marketing and sales will
suffer and it may not ever be profitable. See "Competition."

IF UNITED THERAPEUTICS NEEDS ADDITIONAL FINANCING AND CANNOT OBTAIN IT, PRODUCT
DEVELOPMENT AND SALES MAY BE LIMITED.

United Therapeutics may need to spend more money than currently expected
because it may need to change its product development plans or product offerings
to address difficulties with clinical studies or preparing for commercial sales.
United Therapeutics may not be able to obtain additional funds on commercially
reasonable terms or at all. If additional funds are not available, United
Therapeutics may be compelled to delay clinical studies, curtail operations or
obtain funds through collaborative arrangements that may require it to
relinquish rights to certain of its products or potential markets.

8
<PAGE> 12

UNITED THERAPEUTICS MAY NOT HAVE ADEQUATE INSURANCE AND MAY HAVE SUBSTANTIAL
EXPOSURE TO PAYMENT OF PRODUCT LIABILITY CLAIMS.

The testing, manufacture and marketing of human drugs involves product
liability risks. Although United Therapeutics has product liability insurance,
United Therapeutics may not be able to maintain this product liability insurance
at an acceptable cost, if at all, and this insurance may not provide adequate
coverage against potential losses. If claims or losses exceed United
Therapeutics' liability insurance coverage, United Therapeutics may go out of
business.

UNITED THERAPEUTICS' STOCK PRICE COULD BE VOLATILE AND COULD DECLINE.

The market prices for securities of drug companies are highly volatile, and
there are significant price and volume fluctuations in the market that may be
unrelated to particular companies' operating performances. United Therapeutics'
stock price could decline suddenly due to the following factors:

- Results of clinical trials;

- Timing of regulatory approvals;

- Fluctuations in operating results;

- Announcements by United Therapeutics or others of technological
innovations or new products;

- Failure to meet estimates or expectations of securities analysts;

- Rate of product acceptance;

- Developments in patent or other proprietary rights;

- Public concern as to the safety of products developed by United
Therapeutics or by others;

- Future sales of substantial amounts of common stock by existing United
Therapeutics stockholders; and

- General market conditions.

FUTURE SALES OF SHARES MAY DEPRESS THE STOCK PRICE.

If the stockholders sell a substantial number of shares of United
Therapeutics' common stock in the public market, or investors become concerned
that substantial sales might occur, the market price of the common stock could
decrease. Such a decrease could make it difficult for United Therapeutics to
raise capital by selling stock or to pay for acquisitions using stock. To the
extent outstanding options or warrants are exercised or additional shares of
capital stock are issued, existing stockholders may incur additional dilution.

EXISTING DIRECTORS AND EXECUTIVE OFFICERS OF UNITED THERAPEUTICS OWN A
SUBSTANTIAL BLOCK OF STOCK AND MIGHT BE ABLE TO DIRECT THE OUTCOME OF MATTERS
REQUIRING STOCKHOLDER APPROVAL.

United Therapeutics' directors and executive officers beneficially own
approximately 29 percent of its outstanding common stock. Accordingly, these
stockholders as a group might be able to direct the outcome of matters requiring
approval by United Therapeutics' stockholders, including the election of its
directors. Such stockholder control could delay or prevent a change of control
of United Therapeutics.

BECAUSE OF "ANTI-TAKEOVER" PROVISIONS IN UNITED THERAPEUTICS' CERTIFICATE OF
INCORPORATION AND BYLAWS, A THIRD PARTY MAY BE DISCOURAGED FROM MAKING A
TAKEOVER OFFER WHICH COULD BE BENEFICIAL TO UNITED THERAPEUTICS AND THE PUBLIC
STOCKHOLDERS.

Certain provisions of United Therapeutics' Amended and Restated Certificate
of Incorporation and Amended and Restated By-Laws, and the anti-takeover
provisions of Section 203 of the Delaware General Corporation Law, could delay
or prevent a third party from acquiring United Therapeutics or replacing members
of the United Therapeutics board of directors, even if the acquisition or the
replacements would be

9
<PAGE> 13

beneficial to United Therapeutics' stockholders. These factors could also reduce
the price that certain investors might be willing to pay for shares of the
common stock and result in the market price being lower than it would be without
these provisions.

IF STOCKHOLDERS DO NOT RECEIVE DIVIDENDS, STOCKHOLDERS MUST RELY ON STOCK
APPRECIATION FOR ANY RETURN ON THEIR INVESTMENT IN UNITED THERAPEUTICS.

United Therapeutics has never declared or paid cash dividends on any of its
capital stock. United Therapeutics currently intends to retain its earnings for
future growth and therefore does not anticipate paying cash dividends in the
future.

10
<PAGE> 14

USE OF PROCEEDS

United Therapeutics will not receive any proceeds from the sale of the
shares of common stock by the selling stockholders pursuant to this prospectus.

MARKET PRICE OF COMMON STOCK

United Therapeutics' common stock began trading on the Nasdaq Stock
Market's Nasdaq National Market on June 17, 1999 under the symbol "UTHR." Prior
to that time, there had been no public market for the common stock. The table
below sets forth the high and low closing bid prices for the common stock for
the periods indicated:

<TABLE>
<CAPTION>
HIGH LOW
------ ------
<S> <C> <C>
1999
June 17 - June 30........................................... $12.25 $11.63
July 1 - September 30....................................... 29.88 12.00
October 1 - December 31..................................... 46.00 28.25
</TABLE>

As of March 27, 2000, there were 150 holders of record of common stock. The
closing bid price of United Therapeutics common stock on March 27, 2000 was
$82.25 per share.

United Therapeutics has never paid and does not intend to pay any dividends
on the common stock in the foreseeable future but intends to retain any earnings
for use in the company's business operations.

CAPITALIZATION

The following table sets forth United Therapeutics' capitalization as of
December 31, 1999 (1) on an actual basis and (2) as adjusted to reflect the sale
of the 2,500,000 shares of common stock to the selling stockholders at a price
of $ 32.00 per share.

<TABLE>
<CAPTION>
AS OF DECEMBER 31, 1999
-----------------------
ACTUAL AS ADJUSTED
-------- -----------
(DOLLARS IN THOUSANDS)
<S> <C> <C>
Short-term debt:
Current portion of notes and leases payable............... $ 57 $ 57
Long-term debt:
Notes and leases payable.................................. $ 1,784 $ 1,784
Stockholders' equity:
Preferred stock, $0.01 par value, 10,000,000 shares
authorized; no shares issued and outstanding, actual
and as adjusted........................................ $ -- $ --
Common stock, $0.01 par value, 100,000,000 shares
authorized 16,003,218 shares issued and outstanding,
actual and 18,503,218 shares issued and outstanding, as
adjusted(1)............................................ 160 185
Additional paid-in capital.................................. 102,679 177,403
Accumulated deficit......................................... (49,273) (49,273)
Total stockholders' equity.................................. 53,566 128,315
Total capitalization........................................ $ 55,407 $130,156
======== ========
</TABLE>

- ---------------
(1) Excludes 1,740,719 shares of common stock issuable upon exercise of stock
options and warrants outstanding at December 31, 1999, at a weighted average
exercise price of $15.73 per share. An additional 13,626,793 shares of
common stock are reserved for issuance under United Therapeutics' stock
option plan.

11
<PAGE> 15

SELECTED CONSOLIDATED FINANCIAL DATA

The following selected consolidated financial data should be read in
conjunction with United Therapeutics' consolidated financial statements and
related notes included elsewhere in this prospectus and "Management's Discussion
and Analysis of Financial Condition and Results of Operations" included
elsewhere in this prospectus. The consolidated statement of operations data for
the period from June 26, 1996, the date of inception, through December 31, 1996
and for the years ended December 31, 1997, 1998 and 1999, and the consolidated
balance sheet data as of December 31, 1997, 1998 and 1999, are derived from the
audited consolidated financial statements which have been audited by KPMG LLP,
independent auditors, and are included elsewhere in this prospectus. The
consolidated balance sheet data as of December 31, 1996 are derived from audited
consolidated financial statements not included herein. The historical results
are not necessarily indicative of results to be expected for future periods.

<TABLE>
<CAPTION>
PERIOD FROM YEAR ENDED
JUNE 26, 1996 DECEMBER 31,
(INCEPTION) TO -------------------------------
DECEMBER 31, 1996 1997 1998 1999
----------------- ------- -------- --------
(IN THOUSANDS, EXCEPT PER SHARE DATA)
<S> <C> <C> <C> <C>
CONSOLIDATED STATEMENT OF OPERATIONS DATA:
Revenues................................... $ 154 $ 116 $ 54 $ 436
Operating expenses:
Research and development................. 100 2,027 11,015 30,715
General and administrative............... 85 1,006 2,366 4,978
Cost of sales............................ -- -- -- 164
------ ------- -------- --------
Total operating expense............... 185 3,033 13,381 35,857
------ ------- -------- --------
Loss from operations....................... (31) (2,917) (13,327) (35,421)
Other income (expense):
Interest income.......................... 1 135 510 1,925
Interest expense......................... -- (8) (15) (57)
Write-down of investment................. -- (111) -- --
Other, net............................ -- -- -- 50
------ ------- -------- --------
Total other income, net............... 1 16 495 1,918
------ ------- -------- --------
Net loss before income tax................. (30) (2,901) (12,832) (33,503)
Income tax................................. -- -- (3) (3)
------ ------- -------- --------
Net loss................................... $ (30) $(2,901) $(12,835) $(33,507)
====== ======= ======== ========
Basic and diluted net loss per share(1).... $(0.02) $ (0.87) $ (1.54) $ (2.51)
====== ======= ======== ========
Shares used in computing basic and diluted
net loss per share(1).................... 1,667 3,339 8,322 13,374
</TABLE>

<TABLE>
<CAPTION>
AS OF DECEMBER 31,
---------------------------------------
1996 1997 1998 1999
---- ------- -------- --------
(IN THOUSANDS)
<S> <C> <C> <C> <C>
CONSOLIDATED BALANCE SHEET DATA:
Cash, cash equivalents and short-term investments... $ 94 $ 5,018 $ 16,802 $ 51,596
Total assets........................................ 102 5,074 18,747 59,943
Notes and leases payable(2)......................... -- -- 314 1,841
Accumulated deficit................................. (30) (2,931) (15,767) (49,273)
Total stockholders' equity.......................... 70 4,617 16,676 53,566
</TABLE>

- ---------------
(1) See Note 2 of Notes to Consolidated Financial Statements for a description
of the computation of pro forma basic and diluted net loss per share.

(2) Includes current portion.

12
<PAGE> 16

MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following discussion should be read in conjunction with the financial
statements and related notes appearing elsewhere in this prospectus. The
following discussion contains forward-looking statements concerning the cash
needed for current research and development contract obligations through the end
of 2000, and the adequacy of United Therapeutics' resources to fund operations
through 2002. These forward-looking statements reflect the plans and estimated
beliefs of management as of the date of this prospectus. Actual results could
differ materially from those anticipated in the forward-looking statements.
Factors that could cause or contribute to such differences include those
discussed below and elsewhere in this prospectus, particularly in "Risk
Factors."

OVERVIEW

United Therapeutics develops pharmaceuticals to treat vascular diseases
including pulmonary hypertension and peripheral vascular disease, as well as
selected other chronic conditions. United Therapeutics commenced operations in
June 1996 and, since its inception, has devoted substantially all of its
resources to its research and development programs. United Therapeutics has
generated no product revenues and has funded its operations primarily from the
proceeds of the sale of its equity securities. United Therapeutics operates with
a minimal number of employees and has contracted with qualified third parties
for most pharmaceutical development activities, including certain key aspects of
clinical trials.

United Therapeutics has incurred net losses each year since inception and
had an accumulated deficit of $49.3 million at December 31, 1999. United
Therapeutics expects to continue to incur net losses and cannot provide
assurances that, in the future, it will have product sales or become profitable.
United Therapeutics has contracted with various companies and research
organizations to coordinate and perform clinical trials and to provide other
activities related to the development of its lead product, Uniprost, and other
products. It is anticipated that approximately $19.0 million in cash will be
used during 2000 under these agreements. These expenses will be funded from
existing working capital.

FINANCIAL POSITION

On June 17, 1999, United Therapeutics completed an initial public offering
of 4.5 million shares of common stock at $12.00 per share. The offering closed
on June 22, 1999, and United Therapeutics received net proceeds, after deducting
underwriting commissions and offering expenses, of approximately $48.9 million.
On July 16, 1999, United Therapeutics closed on the sale of 675,000
over-allotment shares to its underwriters and received net proceeds, after
deducting underwriting commissions and offering expenses, of approximately $7.5
million. On January 22, 2000, United Therapeutics closed on the sale of 2.5
million shares of common stock at $32 per share and received net proceeds, after
deducting underwriting commissions and offering expenses, of approximately $75.0
million.

Cash and cash equivalents at December 31, 1999 were $18.3 million as
compared to $6.8 million at December 31, 1998. Investments in marketable debt
securities at December 31, 1999 were $33.3 million as compared to $10.0 million
at December 31, 1998. The combined increases in cash, cash equivalents and
investments in marketable debt securities of approximately $34.8 million is due
to receipt of the net proceeds from the initial public offering and the sale of
the over-allotment shares, less amounts used for operations during 2000.

On October 7, 1999, the company acquired all the outstanding stock of
SynQuest, Inc. (SynQuest), an Illinois corporation engaged in the synthesis and
manufacture of complex molecules. SynQuest manufactures Uniprost, the company's
lead compound. The total cost of this acquisition was approximately $3.2
million, including transaction costs. Cash of $200,000 and 101,251 shares of the
company's common stock valued at $2.9 million was paid to the sellers as
consideration. At December 31, 1999, goodwill and other intangible assets
resulting from the acquisition were approximately $2.7 million net of
accumulated amortization of approximately $154,000, as compared to none at
December 31, 1998.

13
<PAGE> 17

Accounts payable at December 31, 1999 were $2.3 million as compared to $1.7
million at December 31, 1998. This increase in accounts payable is due to
clinical trial activities. The notes payable as of December 31, 1999 totaled
$1.8 million as compared to $314,000 as of December 31, 1998. A new mortgage
note payable was issued in June 1999 for $720,000, the proceeds from which were
partially used to pay off the original mortgage note payable. The new mortgage
note is secured by the building and property owned by United Therapeutics
located at 1110 Spring Street in Silver Spring, Maryland. Another mortgage note
payable was issued in September 1999 for $1,078,000, the proceeds from which
were used to purchase 1106 Spring Street in Silver Spring, Maryland. That
mortgage note is secured by a certificate of deposit in the amount of $512,000
and building and property owned by United Therapeutics located at that address.

Common stock and additional paid-in capital at December 31, 1999 increased
as compared to amounts at December 31, 1998. This increase of approximately
$70.4 million was due primarily to the net proceeds of the initial public
offering of $48.9 million, sales of common stock through private placements
prior to commencement of the initial public offering totaling $2.0 million,
stock issued in exchange for an exclusive license agreement totaling $9.0
million, stock issued to purchase SynQuest, Inc. totaling $2.8 million, and
approximately $7.5 million in net proceeds from the sale of over-allotment
shares to the underwriters.

RESULTS OF OPERATIONS

Years ended December 31, 1999 and 1998

Total revenues for the year ended December 31, 1999 were approximately
$436,000, as compared to $54,000 for the year ended December 31, 1998.
Approximately $211,000 of these revenues were earned under the "orphan drug"
grant awarded by the FDA related to United Therapeutics' development of Uniprost
for the treatment of primary pulmonary hypertension. The FDA may designate a
product as an "orphan drug" if the drug is one intended to treat a rare disease
or condition. Approximately $225,000 of these revenues were earned by SynQuest,
United Therapeutics' wholly owned subsidiary, for the synthesis and manufacture
of complex molecules.

Research and development expenses consist primarily of costs to acquire
pharmaceutical products for development and amounts paid to contract research
organizations, hospitals and laboratories for the provision of services and
materials for drug development and clinical trials. Research and development
expenses were $30.7 million for the year ended December 31, 1999, as compared to
$11.0 million for the year ended December 31, 1998. Approximately $7.1 million
of the increase in research and development expenses is related to increased
levels of patient enrollment in United Therapeutics' clinical trials of
Uniprost. Approximately, $9.1 million of the increase is related to the payment
in March 1999 of an up-front licensing fee consisting of common stock valued at
$9.0 million and $100,000 in cash to obtain the exclusive rights to develop
beraprost, an oral form of prostacyclin, to treat peripheral vascular disease in
the United States and Canada. Additionally, $1.7 million of the increase is
related to the development of beraprost and other products.

General and administrative expenses consist primarily of personnel
salaries, office expenses and professional fees. General and administrative
expenses were $5.0 million for the year ended year ended December 31, 1999, as
compared to $2.4 million for the year ended year ended December 31, 1998. This
increase was due primarily to increased staffing and related travel to support
expanded operations.

Interest income for the year ended year ended December 31, 1999 was $1.9
million, as compared to $510,000 for the year ended year ended December 31,
1998. This increase was attributable to an increase in the amount of cash
available for investing resulting from sales of common stock during 1999, less
amounts used for operations.

Years ended December 31, 1998 and 1997

Revenue for the year ended December 31, 1998 was approximately $54,000, as
compared to approximately $116,000 for the year ended December 31, 1997. The
1998 revenue was earned under an orphan drug

14
<PAGE> 18

grant awarded by the FDA. The 1997 revenue was earned under a contract relating
to primary pulmonary hypertension research.

Research and development expenses were $11.0 million for the year ended
December 31, 1998, as compared to $2.0 million for the year ended December 31,
1997. This increase resulted primarily from higher expenditures of approximately
$7.6 million in 1998 associated with the commencement of Phase III clinical
trials for United Therapeutics' lead product, Uniprost. In addition, the company
paid up-front licensing fees approximating $2.0 million and consisting of common
stock, options, warrants and cash to obtain exclusive rights to develop
beraprost to treat pulmonary hypertension in the United States and Canada, and
UT-77 for all indications worldwide.

General and administrative expenses were $2.4 million for the year ended
December 31, 1998, as compared to $1.0 million for the year ended December 31,
1997. This increase was due primarily to the recruitment and hiring of
additional administrative personnel and increased legal and other professional
fees associated with license and patent activities and the expansion of United
Therapeutics' operations.

Interest income for the year ended December 31, 1998 was approximately
$510,000, as compared to approximately $135,000 for the year ended December 31,
1997. This increase was attributable to an increase in the amount of cash
available for investing resulting from $22.9 million in net proceeds from United
Therapeutics' private placements of common stock during 1998.

Year ended December 31, 1997

United Therapeutics' first full year of operations was 1997. For the year
ended December 31, 1997, revenue from operations was approximately $116,000
which was earned under a contract relating to primary pulmonary hypertension
research.

Operating expenses for the year ended December 31, 1997 totaled $3.0
million, of which $2.0 million was for research and development expenses and
$1.0 million was for general and administrative expenses.

Interest income for the year ended December 31, 1997 was approximately
$135,000.

LIQUIDITY AND CAPITAL RESOURCES

Until June 1999, United Therapeutics financed its operations principally
through various private placements of common stock. On June 17, 1999, United
Therapeutics completed an initial public offering of 4.5 million shares of
common stock at $12.00 per share. Net proceeds to United Therapeutics, after
deducting underwriting commissions and offering expenses, were approximately
$48.9 million. On July 16, 1999, United Therapeutics' closed on the sale of
675,000 over-allotment shares to its underwriters and received net proceeds,
after deducting underwriting commissions and offering expenses, of approximately
$7.5 million. On January 22, 2000, United Therapeutics closed on the private
sale of 2.5 million shares of common stock at $32 per share and received net
proceeds, after deducting fees and offering expenses, of approximately $75
million.

United Therapeutics' working capital at December 31, 1999 was $48.2
million, as compared with $15.1 million at December 31, 1998. Current
liabilities at December 31, 1999 were approximately $4.6 million, as compared
with $1.8 million at December 31, 1998. United Therapeutics' debt at December
31, 1999 was approximately $1.8 million, as compared with $314,000 at December
31, 1998, and consisted of two mortgage notes, one secured by a certificate of
deposit, and both secured by the buildings and property owned by United
Therapeutics located at 1106 -- 1110 Spring Street in Silver Spring, Maryland
and are due in monthly installments over 30 years.

Net cash used in operating activities was approximately $23.7 million and
$9.6 million for the years ended December 31, 1999 and 1998, respectively. The
increase resulted from the expansion of United Therapeutics' operations,
particularly with respect to increased costs for the Uniprost trials. For the
years ended December 31, 1999 and 1998, United Therapeutics invested
approximately $2.0 million and $1.0 million, respectively, in cash for property,
plant, and equipment. Net cash provided by financing activities was
approximately $59.3 million and $22.9 million for the years ended December 31,
1999 and 1998, respectively.

15
<PAGE> 19

Cash flows from financing activities for the year ended December 31, 1999 were
derived primarily from private equity financings in the first quarter, the
initial public offering in June, and the sale of the over-allotment shares to
the underwriters in July. Cash flows from financing activities for the year
ended December 31, 1998 were derived primarily from private equity financings
during that year.

United Therapeutics has contracted with various companies and research
organizations to coordinate and perform clinical trials and to provide other
activities related to the development of Uniprost and other products. It is
anticipated that approximately $19.0 million in cash will be used during 2000
under these agreements. These expenses will be funded from existing working
capital. United Therapeutics expects to make approximately $500,000 in milestone
payments during 2000. United Therapeutics does not expect to make any royalty
payments during 2000.

United Therapeutics expects that existing capital resources will be
adequate to fund its operations through 2002. United Therapeutics' future
capital requirements and the adequacy of its available funds will depend on many
factors, including:

- Regulatory approval of Uniprost and beraprost;

- Size and scope of its development efforts for additional products

- Cost, timing and outcomes of regulatory reviews;

- Rate of technological advances;

- Determinations as to the commercial potential of United Therapeutics'
products under development;

- Status of competitive products;

- Defending and enforcing intellectual property rights;

- Establishment, continuation or termination of third-party manufacturing
arrangements;

- Development of manufacturing resources or the establishment, continuation
or termination of third-party manufacturing arrangements;

- Development of sales and marketing resources or the establishment,
continuation or termination of third-party sales and marketing
arrangements; and

- Establishment of additional strategic or licensing arrangements with
other companies.

As of December 31, 1999, United Therapeutics had available approximately
$33.6 million in net operating loss carryforwards and $11.5 million in business
tax credit carryforwards for federal income tax purposes that expire at various
dates through 2019. United Therapeutics' ability to utilize its net operating
loss and general business tax credit carryforwards may be limited in the future
if it is determined that United Therapeutics experienced an ownership change, as
defined in Section 382 of the Internal Revenue Code, as a result of prior
transactions and/or future transactions. However, these net operating loss and
general business tax credit carryforwards, if subject to limitation arising from
an earlier Section 382 ownership change, would be fully available to offset
income and taxes, as applicable, during their carryforward lives.

RECENT ACCOUNTING PRONOUNCEMENTS

In June 1998, the FASB issued SFAS No. 133, "Accounting for Derivative
Instruments and Hedging Activities." United Therapeutics is required to adopt
SFAS No. 133, as amended, for fiscal quarters beginning after June 15, 2000.
SFAS No. 133 established methods of accounting for derivative financial
instruments and hedging activities related to those instruments as well as other
hedging activities. Because United Therapeutics holds no derivative financial
instruments and does not engage in hedging activities, adoption of SFAS No. 133
is not expected to have a material impact on United Therapeutics' financial
condition or results of operations.

16
<PAGE> 20

BUSINESS

This prospectus contains forward-looking statements that involve risks and
uncertainties. United Therapeutics' actual results may differ significantly from
the results discussed in these forward-looking statements. Factors that may
cause such a difference include, but are not limited to, those discussed in
"Risk Factors."

OVERVIEW

United Therapeutics develops pharmaceuticals to treat vascular diseases,
including pulmonary hypertension and peripheral vascular disease, as well as
selected other chronic conditions. Both pulmonary hypertension and peripheral
vascular disease are characterized by reduced production of natural
prostacyclin, a highly unstable molecule with powerful effects on blood-vessel
health. United Therapeutics' lead products, Uniprost, also known as UT-15, and
beraprost, are stable synthetic forms of prostacyclin. Uniprost is delivered
subcutaneously, and United Therapeutics has completed two multi-center Phase III
clinical trials of Uniprost for treating advanced pulmonary hypertension.
Beraprost is delivered orally, and United Therapeutics is beginning a Phase III
clinical trial program for beraprost to treat early-stage peripheral vascular
disease.

In October 1998, United Therapeutics completed a 26-patient, eight-week
clinical trial for Uniprost in primary pulmonary hypertension patients. In this
trial, patients were randomly selected to receive either Uniprost or a
non-therapeutic saline solution, known as a placebo. This trial was a
"double-blind" study, meaning neither the patients nor the investigators in the
trial were informed during the trial as to which patients were receiving
Uniprost or the placebo. Results from this trial demonstrated that Uniprost can
be safely administered to severely ill patients on an out-patient basis and also
showed that continuous, subcutaneous dosing of Uniprost leads to improvements in
pulmonary blood pressure and exercise ability. Patients receiving Uniprost in
this study experienced improvements similar to those achieved by patients
receiving Flolan therapy for 12 weeks. Flolan was approved by the FDA in 1995 to
treat primary pulmonary hypertension, a small subset of advanced pulmonary
hypertension. Each patient who finished this study elected to receive Uniprost
therapy indefinitely.

In March 2000, United Therapeutics completed an international, randomized,
placebo-controlled, double-blind study of Uniprost involving a total of 470
patients with pulmonary hypertension. Half of the patients received Uniprost
subcutaneously for 12 weeks, while the other half received a placebo. On March
27, 2000, United Therapeutics announced the unblinding of the data from that
study. Based on preliminary analyses of the unblinded data, the study data show
that patients who received Uniprost demonstrated a statistically significant
improvement in their ability to exercise, the primary endpoint of the study. The
preliminary data also show that the patients who received Uniprost had highly
statistically significant improvement in pulmonary blood pressure and in the
signs and symptoms of the disease. All patients in the pivotal study had the
option to continue or commence Uniprost in an open-label study after completion
of the 12-week study. Approximately 500 patients are now being treated with the
drug, including additional patients who enrolled directly into the open-label
study. United Therapeutics will continue analyses of the unblinded data, and the
data will be reviewed by the study's Steering Committee. United Therapeutics is
preparing a new drug application and market authorization application for
Uniprost which it expects to complete and submit to the FDA during the third
quarter of 2000. European filings are also expected in the third quarter of this
year, with other international filings to follow. United Therapeutics plans to
make detailed data available through articles published in peer-reviewed
journals and presentations at scientific conferences later this year.

17
<PAGE> 21

Roussel, Inc., the European licensee of beraprost, submitted a regulatory
application for beraprost to treat peripheral vascular disease in Europe.

United Therapeutics is undertaking additional clinical studies. Uniprost is
in Phase II clinical trials for treating late-stage peripheral vascular disease,
and United Therapeutics is beginning a Phase III clinical trial program for
beraprost to treat early-stage pulmonary hypertension. United Therapeutics
believes that beraprost's current oral formulation will be a complementary
product to Uniprost because this formulation cannot provide the constant
therapeutic levels of prostacyclin in the body necessary to treat advanced
pulmonary hypertension and late-stage peripheral vascular disease effectively.
United Therapeutics is also beginning a Phase II clinical trial program for
UT-77, an elastase inhibitor, for the treatment of chronic obstructive pulmonary
disease. Finally, United Therapeutics is preparing to conduct a Phase III
clinical trial program for Ketotop, a patch that delivers the FDA-approved
anti-inflammatory pain reliever ketoprofen, for the treatment of osteoarthritis.

BACKGROUND

VASCULAR DISEASE AND PROSTACYCLIN

Many vascular diseases are characterized by the degradation of the
blood-vessel wall lining, the aggregation of platelets and the disruption of
smooth muscle cell function. These conditions cause blockages and affect the
ability of the blood vessels to dilate and then constrict as blood flows through
the circulatory system.

Prostacyclin is an important molecule that is produced by the body and has
powerful effects on blood-vessel health and function. Natural prostacyclin is
inherently unstable, with the period of time it remains in the body before
breaking down, known as the "half life," of under six minutes. It appears to act
in three key ways to keep blood vessels functioning properly:

- It dilates blood vessels, where necessary, enabling smooth blood flow;

- It prevents platelet aggregation; and

- It prevents proliferation of smooth muscle cells surrounding the vessels,
which otherwise would constrict the vessels and obstruct blood flow.

PULMONARY HYPERTENSION

Pulmonary hypertension is a progressive, life-threatening vascular disease
that is difficult to diagnose and treat and is currently incurable. It is
characterized by high pressure in the blood vessels between the heart and lungs,
known as the pulmonary blood vessels, but normal blood pressure in the rest of
the body. The high pressure is due to the narrowing of pulmonary blood vessels
caused primarily by reduced production of prostacyclin in the affected blood
vessels. This elevated pulmonary blood pressure causes increasing strain on the
right side of the heart as it tries to pump blood to the lungs. Patients with
early-stage pulmonary hypertension may be unaware they have the disease. As the
disease progresses, however, patients suffer breathlessness and fainting spells
and are increasingly unable to carry out normal daily activities. Patients with
untreated advanced pulmonary hypertension become bedridden and die, usually of
right-heart failure. According to statistics compiled by the National Institutes
of Health before the introduction of Flolan in 1995, the mean survival period
for a patient with primary pulmonary hypertension was approximately 30 months
from diagnosis. Survival of patients using Flolan appears to be markedly
increased. The five-year survival rate of children using Flolan is 92%.

Traditionally, physicians have thought of pulmonary hypertension as
consisting of two diseases: primary pulmonary hypertension and secondary
pulmonary hypertension. Primary pulmonary hypertension has been defined as
pulmonary hypertension with no identified specific cause. Secondary pulmonary
hypertension has been defined as pulmonary hypertension with a known cause such
as heart, lung or liver dysfunction or the connective tissue disease,
scleroderma. Currently, several thousand people in North America and Europe have
been diagnosed with primary pulmonary hypertension, while over 50,000 people in
North America and Europe

18
<PAGE> 22

have advanced secondary pulmonary hypertension. Primary pulmonary hypertension
and advanced secondary pulmonary hypertension appear to be amenable to
prostacyclin therapy. In its 1998 world symposium on primary pulmonary
hypertension, The World Health Organization proposed a new combined
classification -- pulmonary hypertension -- to recognize the similarity between
primary pulmonary hypertension and secondary pulmonary hypertension. The new
classification also includes pulmonary hypertension linked to the use of
Redux(R) or phen-fen diet drugs, HIV infection and genetic predisposition to the
disease. In addition, according to a 1989 report published in Chest, the
official publication of the American College of Chest Physicians, the prevalence
of pulmonary hypertension in the U.S. male population is between 8% and 13% for
men between the ages of 35 and 44, depending on severity. It is also reported
that the prevalence of mild pulmonary hypertension in men age 65 and older
exceeds 20%.

Current Treatments

Flolan. The FDA has approved only one drug treatment for primary pulmonary
hypertension and no drug treatments for secondary pulmonary hypertension. The
approved drug treatment is Flolan, a continuous intravenous infusion of
prostacyclin, marketed by Glaxo Wellcome Inc. in the United States since 1995.
Flolan has also been approved for the treatment of primary pulmonary
hypertension in France and Switzerland. Prior to Flolan's approval in the United
States for primary pulmonary hypertension, physicians often treated pulmonary
hypertension with off-label use of other drugs such as calcium channel blockers
and anticoagulants. In certain circumstances, these are still used off-label to
treat pulmonary hypertension. The FDA approved Flolan based on results from
Glaxo Wellcome's pivotal Phase III trial, in which Flolan proved to be an
effective treatment for patients with primary pulmonary hypertension. Patients
who were treated with Flolan experienced clinical benefits during the 12-week
study, such as increased survival and exercise ability. In contrast, patients
who were not treated with Flolan because they were in the control group
experienced a worsening of their condition. Of the 40 patients in the control
group, eight died during the study, while no patients treated with Flolan died.
Although Flolan is not an approved treatment for secondary pulmonary
hypertension, a study published in the Annals of Internal Medicine in May 1999
concluded that intravenous prostacyclin may be an effective therapy for
secondary pulmonary hypertension. In this study, intravenous prostacyclin
therapy resulted in significant improvement in patients' exercise ability.
Additionally, a study of scleroderma patients presented at the November 1998
American Heart Association meeting reported that Flolan appears to be a safe and
effective treatment for advanced secondary pulmonary hypertension.

Flolan's active component, prostacyclin, dilates blood vessels, prevents
platelet aggregation and prevents proliferation of smooth muscle cells
surrounding blood vessels. The half life of Flolan in the body, however, is
under six minutes.

Although Flolan extends the lives of patients with primary pulmonary
hypertension, there are a number of significant drawbacks associated with Flolan
treatment:

- Because of its short half life and unstable nature, Flolan must be
delivered continuously by an external pump through an intravenous
catheter surgically implanted in the patient's chest;

- Because of Flolan's short half life, patients risk abrupt recurrence of
hypertension, called rebound hypertension, and death in the event Flolan
delivery is interrupted for even a short period of time;

- Because of Flolan's highly unstable nature, patients must prepare a
mixture of Flolan under completely sterile conditions one or more times a
day;

- Patients experience frequent infections, including life-threatening
sepsis, from the catheter or from mixing the drug under unsterile
conditions;

- Because of its highly unstable nature, Flolan should always remain
refrigerated, even during administration;

- To be mobile, patients must wear or carry a pack containing the pump and
ice; and

- Patients should not swim, shower or otherwise immerse themselves in water
because of the infection risks caused by the permanent intravenous
catheter.
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<PAGE> 23

Because of these safety and quality-of-life drawbacks, physicians typically
prescribe Flolan for only those approximately 2,000 patients with the most
advanced stages of pulmonary hypertension. United Therapeutics believes that
other patients who could benefit from Flolan therapy are not using Flolan
because they live in countries where Flolan is unavailable or they are diagnosed
with forms of pulmonary hypertension for which Flolan is not approved and thus
the costs of Flolan therapy are generally not reimbursed by third-party payors.

Transplants. Besides Flolan, the only other treatment for advanced
pulmonary hypertension is a lung or heart-lung transplant. There are significant
drawbacks associated with transplants, including the following:

- Patients often die before suitable donor organs become available;

- Less than 20% of heart-lung transplant patients survive for 10 years;

- Post-operative complications can result in organ rejection, requiring
another transplant if organs are available; and

- Transplant patients require life-long immuno-suppressant drug therapy
that entails life-threatening side effects, including vulnerability to
serious infections and diseases such as cancer and insulin-dependent
diabetes.

Market Size

United Therapeutics believes that the potential market for a
non-intravenous form of prostacyclin such as Uniprost to treat advanced
pulmonary hypertension exceeds $2.5 billion based on the current cost of Flolan
therapy and the estimated number of advanced pulmonary hypertension patients as
reported in medical journals. There are an estimated 55,000 people suffering
from advanced pulmonary hypertension in North America and Europe. According to
the Journal of Pharmacy Systems Reports, the annual cost of Flolan therapy in
the United States, including the necessary supplies and pumps, is in excess of
$57,000 per patient. There are only approximately 2,000 advanced pulmonary
hypertension patients receiving Flolan therapy, representing a current market of
over $110 million in the aggregate. In addition, Flolan patients may incur
substantial annual hospitalization and other costs related to the surgically
implanted catheter. The costs associated with Flolan therapy are reimbursable by
third-party payors, including Medicare. In addition to Uniprost, which United
Therapeutics is developing to treat patients with advanced pulmonary
hypertension. United Therapeutics believes that its oral form of prostacyclin
therapy, beraprost, may provide an opportunity to treat millions of patients
with early-stage pulmonary hypertension.

PERIPHERAL VASCULAR DISEASE

When vascular disease affects the blood vessels in the legs, it is referred
to as peripheral vascular disease. While the precise cause of peripheral
vascular disease is unknown, diabetes, obesity, smoking and lack of exercise are
associated with the disease. In the early stages of the disease, the patient is
at first free of symptoms and then experiences mild to severe pain while
walking. As the disease progresses, the patient experiences leg pain while at
rest and suffers from delayed wound healing which sometimes leads to ulcers,
gangrene and amputation. The mean survival period of the late-stage peripheral
vascular disease patient is six years.

Peripheral vascular disease affects approximately six million people in the
United States, and United Therapeutics believes that a similar number of people
are affected by the disease in Europe. Additionally, there are approximately
350,000 new diagnoses of peripheral vascular disease annually in the United
States and 650,000 new diagnoses of peripheral vascular disease annually in
Europe.

Current Treatments

Treatment for peripheral vascular disease depends upon the disease stage.
In the early stages, physicians treat the disease primarily by recommending
lifestyle changes such as special diet and regular exercise programs. If these
changes are not effective in halting the progress of the disease, physicians
sometimes prescribe drug treatment. The progression of the disease frequently
results in repeated surgeries or other

20
<PAGE> 24

interventions, including angioplasty to unblock the arteries of the leg,
arterial grafts to bypass the blocked arteries and insertion of stents to
prevent the arteries from collapsing. If these procedures are ineffective,
amputations are often required. The FDA has approved only two drugs for
peripheral vascular disease, pentoxifylline and cilostazol. Pentoxifylline
improves the flow properties of the red blood cells, and cilostazol reduces the
stickiness of blood platelets. Cilostazol should not be prescribed for patients
with certain cardiovascular complications, including those that commonly occur
in patients with peripheral vascular disease. The company believes that neither
of these drugs provide all the benefits of Uniprost or beraprost.

Market Size

Surgeons currently perform approximately 200,000 amputations each year in
the United States and Europe on late-stage peripheral vascular disease patients.
Additionally, 300,000 non-amputation surgical procedures are performed in the
United States each year and, the company believes a similar number are performed
each year in Europe. Based on an average cost of $16,000 per amputation and of
$15,000 per angioplasty, there is in excess of $12 billion spent each year on
surgeries related to peripheral vascular disease in the United States and
Europe. United Therapeutics is evaluating how much of this market can be
addressed by prostacyclin therapy. The company expects that many amputations may
be avoided and, when prostacyclin therapy is used in conjunction with the other
surgical procedures, repeat surgical procedures may be reduced.

CHRONIC OBSTRUCTIVE PULMONARY DISEASE

Chronic obstructive pulmonary disease is a serious and potentially
life-threatening inflammation of the lungs characterized by chronic obstruction
of airflow. The two principal subsets of chronic obstructive pulmonary disease
are emphysema and chronic bronchitis.

Emphysema

Approximately two million people in the United States, and the company
believes a similar number in Europe, suffer from emphysema, which is a disease
affecting the small airways of the lung. Emphysema may be hereditary or caused
by smoking or environmental toxins. Patients with emphysema experience shortness
of breath, labored breathing, excessive and chronic coughing and production of
excessive sputum. In healthy lungs, two proteins act in harmony to keep the
lungs clear and functional. The first protein, elastase, is carried by the
body's white blood cells and protects the lungs by killing bacteria and
neutralizing inhaled particles. Once these beneficial effects are achieved, the
second protein -- alpha-1 antitrypsin -- neutralizes elastase, which, if left to
act unchecked, destroys lung tissue. In patients with emphysema, the alpha-1
antitrypsin levels are greatly reduced, which allows elastase to damage the
elastic fibers of the lungs, rendering the lungs unable to expand and contract
as with normal breathing. In most cases, this damage is permanent and
irreversible.

Chronic Bronchitis

Approximately 14 million people in the United States, and the company
believes a similar number in Europe, suffer from chronic bronchitis, which is a
disease affecting the large airways of the lungs. Chronic bronchitis is an
inflammation of the bronchi which can be caused by smoking, environmental toxins
or bacterial infections. Patients with chronic bronchitis, like emphysema
patients, experience shortness of breath, labored breathing, excessive and
chronic coughing and production of excessive sputum.

Current Treatments

Current management of chronic obstructive pulmonary disease is based on the
degree of the respiratory obstruction and the extent of the patient's
disability. Prolastin(R) is the only FDA-approved drug specifically for the 5%
of chronic obstructive pulmonary disease patients with an inherited deficiency
of alpha-1 antitrypsin. Prolastin is difficult to manufacture and is not
available in sufficient quantities to support this subset of emphysema patients.
A lung transplant is the treatment of last resort for late-stage emphysema
patients. There is no treatment currently available to restore lung elasticity
and thus reverse the progression of emphysema.

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<PAGE> 25

With respect to chronic bronchitis, early in the disease process physicians
prescribe bronchodilators, which act to open airways in the lungs, including
Combivent(R) and Atrovent(R) inhalation aerosols. Theophylline and albuterol are
frequently prescribed to produce dilation of bronchioles for both emphysema and
chronic bronchitis. Finally, physicians have used intermittent positive pressure
breathing devices and continuous oxygen therapy when other agents have failed.
For patients with the most advanced stages of emphysema, the only treatment is a
lung transplant.

Market Size

There were 97,000 deaths in the United States in 1995 attributable to
chronic obstructive pulmonary disease, the country's fourth leading cause of
death. There are approximately 500,000 hospitalizations annually due to chronic
bronchitis.

STRATEGY

Capitalize on United Therapeutics' Experience and Expertise in Pulmonary
Vascular Medicine. United Therapeutics believes that it has assembled the
preeminent group of scientists and clinicians in the field of pulmonary vascular
medicine. Members of United Therapeutics' scientific advisory board have won the
Nobel Prize for the discovery and characterization of prostacyclin, discovered
Flolan and invented UT-15, also known as Uniprost. Members of United
Therapeutics' senior management led the team at Burroughs Wellcome Co. that
designed the clinical trials for, obtained FDA approval of and commercialized
Flolan. These executives have similarly designed Uniprost's clinical trials,
which have primary end points identical to those used for the studies to approve
Flolan. United Therapeutics believes this expertise will be instrumental in the
development and commercialization of Uniprost, beraprost and its other products.

Establish United Therapeutics' Prostacyclin Products as the Standard of
Care for Pulmonary Hypertension and Peripheral Vascular Disease. United
Therapeutics is seeking to establish Uniprost and beraprost, its stable analogs
of prostacyclin, as the worldwide standards of care for the treatment of
pulmonary hypertension and peripheral vascular disease. United Therapeutics has
completed two multi-center pivotal Phase III clinical trials of Uniprost for
advanced pulmonary hypertension and is conducting a Phase II trial of Uniprost
for late-stage peripheral vascular disease. United Therapeutics is also
conducting a Phase III clinical trial program for beraprost to treat early-stage
peripheral vascular disease and a Phase III clinical trial program for beraprost
to treat early-stage pulmonary hypertension. United Therapeutics believes that
its influential scientific advisory board, strong network of clinical
investigators and experienced management team can demonstrate and communicate to
physicians the benefits of treating pulmonary hypertension and peripheral
vascular disease patients with United Therapeutics' stable synthetic forms of
prostacyclin following their approval.

Minimize Fixed Costs and Corporate Overhead Through Outsourcing and
Partnering Where Cost Effective. United Therapeutics maintains a streamlined
corporate infrastructure focused on strategic business management. United
Therapeutics contracts with FDA-approved manufacturers for the synthesis and
manufacture of many of its products and with established drug sales
organizations for marketing and distribution of its products. United
Therapeutics has partnered with MiniMed, Inc., the worldwide leader in
subcutaneous continuous-flow microinfusion device systems, to design, develop
and implement the delivery of Uniprost therapies for pulmonary hypertension
using MiniMed products. Prior to October 1999, United Therapeutics outsourced
manufacturing of Uniprost to SynQuest, Inc. United Therapeutics acquired
SynQuest, Inc. in October 1999. By outsourcing many non-core aspects of its
business, United Therapeutics believes that it will substantially reduce fixed
overhead and capital investment, accelerate commercialization of its products
and reduce its business risk.

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<PAGE> 26

Obtain Licenses for, Develop and Commercialize Selected Other Product
Candidates. United Therapeutics intends to continue to license and develop
product candidates that:

- have positive human safety and efficacy data;

- address a chronic condition with currently inadequate or high-cost
treatment options; and

- address a condition with little existing or potential treatment
competition.

Accordingly, United Therapeutics has obtained licenses for UT-77 and
Ketotop. The company is developing UT-77, which appears to prevent elastase from
destroying lung tissue, for the treatment of chronic obstructive pulmonary
disease. United Therapeutics is beginning a Phase II clinical trial program for
UT-77. United Therapeutics is also preparing to conduct a Phase III clinical
trial program for Ketotop, a unique transdermal delivery system for the
FDA-approved anti-inflammatory pain reliever, ketoprofen. Ketotop is currently
being sold by others in several countries outside the United States. In
addition, in August 1999, Unither Telemedicine Services Corporation entered into
an agreement to develop and commercialize infrared wound healing technology.

UNITED THERAPEUTICS' PRODUCTS

The following table summarizes United Therapeutics' potential product
portfolio.

<TABLE>
<CAPTION>
PRODUCT MODE OF DELIVERY INDICATION CLINICAL TRIAL STATUS UT TERRITORY
------- ---------------- ---------- --------------------- ------------
<S> <C> <C> <C> <C>

Uniprost Subcutaneous Advanced pulmonary Completed Pivotal Worldwide
(UT-15) hypertension Phase III

Uniprost Subcutaneous Late-stage peripheral Phase II Worldwide
vascular
(UT-15) disease

Beraprost Oral Early-stage peripheral Phase III U.S./Canada
vascular
disease

Beraprost Oral Early-stage pulmonary Phase III U.S./Canada
hypertension

UT-77 Inhalation Chronic obstructive pulmonary Phase II Worldwide
disease

Ketotop Transdermal Osteoarthritis Beginning Phase III North America/
Europe
</TABLE>

UNIPROST

In December 1996 and January 1997, United Therapeutics obtained worldwide
rights to UT-15, also known as Uniprost, for all indications from Glaxo Wellcome
and Pharmacia & Upjohn. In October 1999, United Therapeutics acquired all the
outstanding stock of SynQuest, Inc., manufacturer of Uniprost.

Pulmonary Hypertension

United Therapeutics has focused primarily on developing Uniprost as its
lead product for treating advanced pulmonary hypertension. Uniprost is a
significantly more stable form of prostacyclin than Flolan, and United
Therapeutics believes that it will provide patients with a convenient and
non-intravenous life-long prostacyclin therapy. In contrast to Flolan, Uniprost
is stable at room temperature for up to five years and is significantly longer
lived in the human body than Flolan. These attributes allow for a safer and more
convenient delivery of Uniprost to patients. Specifically, Uniprost does not
need to be administered by a refrigerated, bulky pump through a surgically
implanted catheter. Instead, Uniprost is delivered by subcutaneous infusion with
a pager-sized MiniMed microinfusion device, the same type of reliable device
that has been

23
<PAGE> 27

used to deliver insulin to over 60,000 diabetics. Subcutaneous delivery of
Uniprost also eliminates the risk of sepsis infection and related
hospitalization associated with the Flolan catheter. Uniprost's extended half
life also greatly reduces the risk of death from life-threatening rebound
hypertension in cases of treatment interruption. The stability of Uniprost also
allows it to be prepackaged, thus eliminating the need to reconstitute the drug
one or more times daily under completely sterile conditions, as is the case with
Flolan.

The primary differences between the Flolan therapy and the Uniprost therapy
are summarized in the following table.

<TABLE>
<CAPTION>
CHARACTERISTIC FLOLAN UNIPROST
-------------- ----------- ------------
<S> <C> <C>
Delivery of drug............................................ Intravenous Subcutaneous
Surgical implant of catheter................................ Yes No
Constant refrigeration...................................... Yes No
Sterile conditions for frequent drug constitution Yes No
required..................................................
Risk of rebound hypertension................................ High Low
Risk of serious infections, including sepsis................ High Low
Bulky pack for pump......................................... Yes No
Swimming and showers prohibited............................. Yes No
</TABLE>

The pivotal Phase III clinical trials of Uniprost for advanced pulmonary
hypertension have been completed. The main objective of the trials was to
determine the impact of continuous subcutaneous Uniprost therapy on exercise
ability after 12 weeks. The primary endpoints for these trials were identical to
those in the studies to approve Flolan. Secondary objectives included assessing
the impact of Uniprost on the symptoms of advanced pulmonary hypertension.
Preliminary analyses of the unblinded data are positive, revealing that the
patients who received Uniprost experienced improved exercise ability, improved
pulmonary blood pressure and improved signs and symptoms of the disease. United
Therapeutics is continuing its analysis of the data and is preparing the
necessary submissions to the FDA and similar European agencies. The company
expects to make these filings in the third quarter of this year and to make
detailed public disclosure of the data in peer-reviewed journals and at
scientific conferences later in the year.

In clinical trials in October 1998, United Therapeutics demonstrated that
Uniprost, delivered in a brief intravenous infusion, has similar effects on
primary pulmonary hypertension patients as does a comparable infusion of Flolan.
United Therapeutics then demonstrated that Uniprost, delivered in a brief
subcutaneous infusion to primary pulmonary hypertension patients, had similar
effects as when delivered intravenously. Recently, United Therapeutics studied
26 primary pulmonary hypertension patients in a randomized, double-blind,
placebo-controlled, eight-week trial that concluded:

- Uniprost can be safely administered to severely ill patients on an
outpatient basis;

- Continuous dosing of Uniprost leads to improvement in pulmonary blood
pressure and exercise ability; and

- These improvements are similar to improvements observed with Flolan
administered for 12 weeks.

All patients enrolled in the Phase III study had the option to continue or
commence Uniprost in an open-label study. Approximately 500 patients are now
being treated with the drug, including patients who finished the study in
October 1998 and elected to receive Uniprost therapy indefinitely.

Peripheral Vascular Disease

United Therapeutics is also developing Uniprost for late-stage peripheral
vascular disease. Peripheral vascular disease appears to be similar to pulmonary
hypertension in that there is a reduction in natural prostacyclin in the
affected blood vessels. In September 1998, United Therapeutics completed a Phase
II study which assessed the safety and blood flow effects of Uniprost
administered intravenously to patients with late-stage peripheral vascular
disease. The study demonstrated that Uniprost can be administered safely to
patients with late-stage peripheral vascular disease and substantially increased
blood flow in the affected areas

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<PAGE> 28

of the legs. United Therapeutics will next undertake a pre-pivotal study to
optimize dosing levels of Uniprost for pivotal Phase III trials. Other studies
by independent clinical investigators have shown that Flolan provides
therapeutic benefit to patients with early- and late-stage peripheral vascular
disease.

BERAPROST

In September 1998, United Therapeutics obtained an exclusive license from
Toray Industries, Inc. for beraprost for the treatment of pulmonary hypertension
in the United States and Canada. In March 1999, United Therapeutics obtained an
additional exclusive license from Toray for beraprost for the treatment of
peripheral vascular disease in the United States and Canada. Beraprost is an
oral form of prostacyclin that is chemically stable and has a half life in the
body of approximately one hour. Like natural prostacyclin and Uniprost,
beraprost dilates blood vessels, prevents platelet aggregation and prevents
proliferation of smooth muscle cells surrounding blood vessels. United
Therapeutics believes that beraprost may be an important treatment for
early-stage peripheral vascular disease and for early-stage pulmonary
hypertension. Intermittent oral doses of beraprost do not, however, provide
consistent levels of the drug in the blood necessary to treat advanced stages of
these diseases. Consequently, United Therapeutics believes that Uniprost will be
the more effective treatment for the late stages of these diseases.

Beraprost has proven to be safe and effective for the treatment of
peripheral vascular disease in clinical studies conducted outside the United
States and has been approved for treatment of peripheral vascular disease in
Japan since 1994. Sales in Japan of beraprost by Toray and its licensees were
over $225 million in 1998. Toray has licensed to Hoechst Marion Roussel, Inc.
rights to beraprost in Europe. Hoechst has conducted extensive clinical research
with beraprost, including a controlled study in patients suffering from
intermittent leg pain due to blood vessel blockages. This study shows that
beraprost is effective in treating patients with early-stage peripheral vascular
disease, and Hoechst has filed for approval of beraprost for the treatment of
peripheral vascular disease in Europe. A recent Japanese study presented at the
1998 American Heart Association meeting suggests that beraprost may improve
survival in patients with pulmonary hypertension as well. In that study, 21 of
the 24 patients using beraprost survived during the four year study period, as
compared to eight of the 34 patients not using beraprost. United Therapeutics is
conducting a Phase III clinical trial program for beraprost to treat early-stage
peripheral vascular disease and Phase III clinical trial program for beraprost
to treat early-stage pulmonary hypertension.

UT-77

In November 1998, United Therapeutics acquired from Cortech, Inc. exclusive
worldwide rights to develop and market UT-77 for all indications, except the
treatment of skin conditions. United Therapeutics believes that UT-77 is the
only potential new chemical entity or drug in Phase II or later clinical trials
for preventing elastase from destroying the lung tissue of patients with chronic
obstructive pulmonary disease. United Therapeutics intends to develop UT-77 for
delivery by both injection and inhalation. The company is conducting a
multi-center Phase II study to assess the effectiveness of UT-77 in improving
breathing of patients suffering from periodic life-threatening episodes
associated with chronic obstructive pulmonary disease. Cortech conducted
extensive pre-clinical and clinical studies of UT-77 that showed continuous
intravenous infusion of UT-77 inhibits lung tissue destruction associated with
chronic obstructive pulmonary disease and enhances lung function in chronic
obstructive pulmonary disease patients. Prior to United Therapeutics' license
from Cortech, clinical investigators in U.S. medical centers conducted Phase I
and Phase II studies involving 40 patients that showed UT-77 to be safely
tolerated as a continuous intravenous infusion therapy. These studies also
showed that the drug affected the levels of certain proteins in the body that
are involved in several respiratory diseases. United Therapeutics believes that
these results provide a reasonable basis for further development of UT-77 as a
treatment for chronic obstructive pulmonary disease.

KETOTOP

In July 1998, United Therapeutics began collaborating with Global Medical
Enterprises Ltd. and Global Medical Enterprises Ltd., LLC to develop Ketotop. In
February 1999, United Therapeutics obtained the exclusive rights from Global
Medical to develop Ketotop for marketing in North America and Central
25
<PAGE> 29

America. In December 1999, United Therapeutics and Global Medical formed a
limited liability company to commercialize Ketotop in Europe. Ketotop is a
unique, transdermal drug delivery system which contains ketoprofen, an
FDA-approved oral pain reliever that has strong anti-inflammatory properties.
United Therapeutics plans to market Ketotop to relieve osteoarthritis and other
musculo-skeletal pain. Osteoarthritis is a disease that afflicts nearly 21
million people in the United States, including 13.7 million with osteoarthritis
of the knee. Although highly effective, ketoprofen in pill form frequently
produces gastric irritation. To address this problem, Ketotop uses a unique
matrix technology to provide ketoprofen transdermally, through the skin using a
patch, in concentrated doses specifically to targeted sites for a sustained
period of 12 to 14 hours. United Therapeutics believes that this delivery
system, which is patented in the United States, is the most effective way to
deliver pain relief through the skin. United Therapeutics is preparing to
conduct Phase III studies to demonstrate that Ketotop is safe and effective for
the treatment of osteoarthritis.

TELEMEDICINE SERVICES

Pulmonary hypertension patients require periodic monitoring of certain
bodily measurements such as heart and lung function. Much of this monitoring can
be achieved with less expense and inconvenience by using telemedicine devices
that enable physicians to monitor patients remotely. United Therapeutics intends
to provide telemedicine services for a fee to patients and physicians using and
prescribing United Therapeutics' products. United Therapeutics also intends to
utilize its experience with pulmonary hypertension telemedicine to explore the
development of similar internet-based services for other chronic diseases.

THE MINIMED STRATEGIC ALLIANCE

MiniMed, Inc. is a world leader in the design, development, manufacturing
and marketing of advanced infusion systems for the delivery of drugs. The
pager-sized microinfusion device which MiniMed has agreed to provide United
Therapeutics to deliver Uniprost by continuous, subcutaneous infusion is a
system substantially similar to the system which has been successfully marketed
to over 60,000 diabetics for insulin delivery.

United Therapeutics entered into an agreement with MiniMed in September
1997, which was implemented in a detailed set of guidelines adopted in November
1999, to collaborate in the design, development and implementation of therapies
to treat pulmonary hypertension utilizing MiniMed products and Uniprost. The
term of the agreement commenced on September 3, 1997 and continues for seven
years after the FDA grants a new drug approval for Uniprost. The agreement will
be automatically extended for additional 12-month periods unless otherwise
terminated. The agreement is subject to early termination in the event of a
material breach or bankruptcy of either party. United Therapeutics and MiniMed
have established a Management Committee comprised of two representatives from
each company to implement the agreement. MiniMed will:

- Establish a dedicated sales force for Uniprost for advanced pulmonary
hypertension;

- Take responsibility for the marketing and sales of Uniprost to physicians
who treat pulmonary hypertension;

- Train patients and care providers in the use of the MiniMed device with
Uniprost;

- Provide the MiniMed device, related supplies and customer service to
United Therapeutics; and

- Assist patients with third-party payor reimbursement.

The guidelines implementing the agreement provide that United Therapeutics
will purchase the pumps and supplies from MiniMed at a discount off of MiniMed's
list prices from time to time. In the event that there are any discoveries or
improvements arising out of work performed under the agreement, the parties will
have joint ownership of those discoveries or improvements. The guidelines
require United Therapeutics to purchase its Uniprost infusion pumps exclusively
from MiniMed unless MiniMed's infusion pumps fail to receive certain government
approvals.

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PATENTS AND PROPRIETARY RIGHTS

United Therapeutics' success will depend in part on its ability to obtain
and maintain patent protection for its products, preserve trade secrets, prevent
third parties from infringing upon its proprietary rights and operate without
infringing upon the proprietary rights of others, both in the United States and
internationally.

GLAXO WELLCOME ASSIGNMENT

In January 1997, Glaxo Wellcome Inc. assigned to United Therapeutics
patents and patent applications for the use of the stable prostacyclin analog,
UT-15, now known as Uniprost, for the treatment of pulmonary hypertension and
congestive heart failure. Glaxo Wellcome has a right to negotiate a license from
United Therapeutics if United Therapeutics decides to license any part of the
marketing rights to a third party. Glaxo Wellcome waived this right with respect
to the agreement with MiniMed. Under the agreement, Glaxo Wellcome is entitled
to certain royalties from United Therapeutics for a period of 10 years from the
date of the first commercial sale of any product containing Uniprost. If United
Therapeutics grants to a third party any license to Uniprost, Glaxo Wellcome is
also entitled to a percentage of all consideration payable to United
Therapeutics by such licensee.

For pulmonary hypertension, the patent does not expire in the United States
until October 2009 and until various dates from September 2009 to August 2013 in
nine other countries. For congestive heart failure, the patent does not expire
until May 2011 in the United States and from May 2011 to March 2012 in five
other countries. United Therapeutics is responsible for all patent prosecution
and maintenance for the UT-15 patent portfolio.

PHARMACIA & UPJOHN LICENSE

In December 1996, Pharmacia & Upjohn Company exclusively licensed to United
Therapeutics patents and a patent application for the composition and production
of the stable prostacyclin analog UT-15, now known as Uniprost. United
Therapeutics filed a U.S. patent application for a new synthesis and production
method for UT-15 in October 1997. United Therapeutics believes that its method
is a substantial improvement over the Pharmacia & Upjohn method. United
Therapeutics intends to use its improved and unique synthesis method rather than
the licensed Pharmacia & Upjohn method for the actual production of the Uniprost
product.

Under the Pharmacia & Upjohn agreement, United Therapeutics paid an initial
license fee and must make additional milestone payments for orphan and
non-orphan indications of the compound of up to $3,875,000. United Therapeutics
will make royalty payments between 2.5% and 5% of net sales, subject to
reduction based on required royalty payments to Glaxo Wellcome, to Pharmacia &
Upjohn until the later of the expiration of the applicable patent or 10 years
after the date of the first commercial sale of a product in a country defined as
a milestone country under the agreement. The agreement may be terminated earlier
by either party in certain circumstances, including upon a material breach by or
bankruptcy of the other party, and by United Therapeutics at any time upon 60
days' notice to Pharmacia & Upjohn. Pursuant to the agreement, United
Therapeutics is obliged to use its best efforts to conduct a research and
development program in the United States relating to the use of the product
containing the compound for at least one indication, and to obtain regulatory
approvals and market a product in the United States and such other countries as
United Therapeutics deems appropriate.

The term of the patent licensed from Pharmacia & Upjohn expires in March
2000 in the United States and on various dates from January 2001 to February
2010 in 14 other countries. Pharmacia & Upjohn is responsible for prosecution
and maintenance of the U.S. and foreign patent portfolio relating to the UT-15
compound and synthesis method, but may discontinue prosecution of and/or abandon
the patent portfolio and give United Therapeutics an opportunity to prosecute or
maintain the portfolio.

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TORAY INDUSTRIES LICENSES

In September 1998, United Therapeutics entered into an agreement with Toray
Industries, Inc. obtaining the exclusive right to develop and market beraprost
in the existing immediate-release oral form in the United States and Canada for
the treatment of pulmonary hypertension and other pulmonary vascular diseases,
plus certain additional rights of first refusal for other products, therapies or
territories. In exchange, United Therapeutics paid Toray cash and 166,666 shares
of common stock, and granted Toray an option to purchase an additional 166,666
shares of common stock at an exercise price of $9.00 per share. United
Therapeutics also agreed to pay Toray milestone payments of up to $750,000. In
March 1999, United Therapeutics entered into an agreement with Toray obtaining
the exclusive right to develop and market beraprost in the United States and
Canada for the treatment of peripheral vascular disease. United Therapeutics
paid Toray cash and 500,000 shares of common stock and agreed to pay Toray
milestone payments of up to $750,000.

Pursuant to the agreements, United Therapeutics has agreed to pay all costs
and expenses associated with undertaking clinical trials, obtaining regulatory
approvals and commercializing beraprost in the United States and Canada for the
treatment of pulmonary hypertension and peripheral vascular disease. Toray has
retained all manufacturing rights for beraprost. United Therapeutics has agreed
to purchase beraprost solely from Toray at specified prices based on volume. The
agreements each set forth a product development schedule. In the event that
development by United Therapeutics falls significantly behind the schedule
specified in either agreement, Toray may terminate that agreement. Furthermore,
United Therapeutics is responsible under the agreements for achieving minimum
annual product net sales as determined in advance by mutual agreement and in the
case of the first two years of commercial sales, minimum net sales of $2.5
million and $5 million. In the event that United Therapeutics is unable to meet
any minimum annual net sales requirement for two consecutive years, Toray may
convert the exclusive license to a non-exclusive license. United Therapeutics
would then be required to share any product marketing rights approved by the FDA
with a third-party licensee chosen by Toray. Each agreement expires 10 years
following FDA approval of beraprost for the particular disease indication.
United Therapeutics may extend each agreement for unlimited one-year periods
with Toray's consent.

The United States patents licensed by United Therapeutics cover the
compound beraprost and its method of synthesis and will expire in January 2003
and April 2010. The licensed Canadian patent expires in January 2003. There are
no issued patents covering methods of treating any disease, including pulmonary
hypertension and peripheral vascular disease, using beraprost. Toray is
responsible for prosecuting and maintaining beraprost patents with United
Therapeutics' reasonable assistance.

CORTECH LICENSE

In November 1998, United Therapeutics signed an agreement with Cortech,
Inc. obtaining the exclusive right to develop and market a compound, now known
as UT-77, for all indications worldwide, except for certain dermatological uses.
In exchange, United Therapeutics made a cash payment and granted Cortech a
warrant to purchase 116,666 shares of common stock. The warrant vests only if
United Therapeutics continues developing UT-77 after November 2000 and
terminates in November 2004. United Therapeutics also agreed to make milestone
payments in the event it elects to develop the drug after November 2000 of up to
$6,450,000 for non-orphan drug indications and pay royalty fees between 6% and
10% of UT-77 net sales.

Pursuant to the agreement, United Therapeutics is required to use
reasonable efforts to develop and conduct research and pre-clinical and human
clinical trials to obtain all regulatory approvals to manufacture, market and
commercialize the products that United Therapeutics determines are commercially
feasible. In addition, United Therapeutics is responsible for a majority of the
costs for prosecuting and maintaining the patents covering UT-77. United
Therapeutics may choose to discontinue the development of the products without
penalty upon written notice to Cortech if the products do not satisfy United
Therapeutics' clinical needs for targeted indications. If United Therapeutics
terminates the agreement, however, Cortech will receive an exclusive
royalty-free license to use any improvements, know-how, data, information or
regulatory filings or any other intellectual property arising from United
Therapeutics' performance under the agreement. Under the agreement, inventions
or improvements to the technology for the manufacture or use of UT-77 are

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<PAGE> 32

retained by the party whose employees conceive them. Cortech may terminate the
agreement if United Therapeutics does not commence Phase II clinical trials of
UT-77 before May 2001, subject to certain exceptions.

UT-77 is patented in the United States and in 22 foreign countries. Patent
applications are pending in six countries. The U.S. patent expires in June 2010
and foreign counterparts expire between August 2008 and December 2012. Cortech
is responsible for patent prosecution and maintenance under the agreement.

GLOBAL MEDICAL ENTERPRISES AGREEMENT

In February 1999, United Therapeutics entered into an agreement with Global
Medical Enterprises Ltd. and Global Medical Enterprises Ltd., LLC. This
agreement gives to United Therapeutics the exclusive right to commercialize and
sell Ketotop in the United States, Canada, Mexico, Central America and the
Caribbean for treatment of all indications. Global Medical holds its rights
under an exclusive sales and distribution agreement with Pacific
Pharmaceuticals, Inc., the Korean manufacturer of Ketotop. Both the agreement
between United Therapeutics and Global Medical and the agreement between Global
Medical and Pacific Pharmaceuticals expire in July 2008. The agreement between
United Therapeutics and Global Medical will be extended if Pacific
Pharmaceuticals extends its agreement with Global Medical. The agreement is
subject to early termination in the event of a material breach or bankruptcy of
either party or if the underlying agreement between Global Medical and Pacific
Pharmaceuticals is terminated. United Therapeutics has agreed to purchase
Ketotop solely from Global Medical and will pay Global Medical a product
purchase price equal to Global Medical's cost of obtaining Ketotop from Pacific
Pharmaceuticals plus a profit percentage of between 15% and 23%. United
Therapeutics and Global Medical will jointly determine Global Medical's
compensation for sales in additional territories.

Ketotop is patented in the United States, but is not patented in any other
territory where United Therapeutics has marketing rights. The Ketotop patent
expires in April 2013. There are no issued U.S. patents covering methods of
treating osteoarthritis with Ketotop. Global Medical and Pacific Pharmaceuticals
are responsible for prosecuting and maintaining the Ketotop patent portfolio. In
addition, United Therapeutics is obligated under its agreement with Global
Medical to obtain trademark protection on behalf of Pacific Pharmaceuticals for
the Ketotop mark in every jurisdiction where United Therapeutics has marketing
rights. United Therapeutics has not yet filed trademark applications for
Ketotop. If United Therapeutics fails to file them in the future, Global Medical
may terminate the agreement.

On December 1, 1999, United Therapeutics and Global Medical formed Ketotop,
LLC, a Delaware limited liability company, to commercialize Ketotop in Europe.
United Therapeutics and Global Medical each own a one-half interest in Ketotop,
LLC and will jointly manage its operations. Global Medical assigned to Ketotop,
LLC at no cost the exclusive right to commercialize and sell Ketotop in the
European Union. Global Medical had received this exclusive right from Pacific
Pharmaceuticals Inc. This right expires in July 2008 unless extended by Pacific
Pharmaceuticals. United Therapeutics and Global Medical intend that Ketotop, LLC
will sublicense exclusive Ketotop commercialization rights to sublicensees in
Europe which will be responsible for the costs of commercializing Ketotop within
their subterritories. United Therapeutics agreed to provide its clinical data to
Ketotop, LLC in return for reciprocal clinical data access from Ketotop, LLC's
European sublicensees.

SHEARWATER POLYMERS, INC. AGREEMENT

In September 1999, United Therapeutics entered into an agreement with
Shearwater Polymers, Inc. This agreement grants to United Therapeutics the
exclusive right to Shearwater's know-how for the design, development, production
and use of a technology known as pegylation to develop and produce sustained
release prostacyclin molecules for the possible treatment of pulmonary
hypertension, peripheral vascular disease, stroke, heart disease, cancer, and
related diseases worldwide. In exchange, United Therapeutics paid Shearwater
$100,000 in cash and agreed to pay Shearwater milestone payments of up to
$2,900,000. Milestone payments will come due upon the achievement of certain
product development goals set forth in the agreement and are expected to be paid
over a period of approximately six years. United Therapeutics also

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agreed to pay royalties ranging from two to four percent of net sales from
developed products. Minimum annual royalties of $1,000,000 are required
commencing with the thirteenth month following government approval of a
developed product.

Under United Therapeutics' agreement with Shearwater, any inventions that
relate to the combination of prostacyclin and the pegylation technology,
including production methods and therapeutic methods for the treatment of any
indication, will be owned solely by United Therapeutics, and any inventions
relating to non-protacyclin pegylation methods such as drug formulation or
delivery will be owned solely by Shearwater. Both United Therapeutics and
Shearwater have filed for U.S. patent applications relating to their respective
inventions and each is responsible for prosecuting and maintaining its patent
portfolio.

SYNERGY PHARMACEUTICALS, INC. AGREEMENT

In March 2000, Unither Pharmaceuticals, Inc., a wholly owned subsidiary of
United Therapeutics, entered into a license agreement with Synergy
Pharmaceuticals, Inc. to obtain from Synergy the exclusive worldwide rights to
certain patents owned or licensed by Synergy relating to anti-viral compounds.
Unither will pay Synergy, at closing, a $100,000 license fee. In addition, the
agreement conditionally requires Unither to pay Synergy milestone payments of up
to $22.2 million for each FDA-approved product plus royalties ranging from 6
percent to 12.25 percent, subject to reductions, based on net sales. As part of
the transaction, Unither has agreed to acquire 15 percent of the outstanding
stock of Synergy for a total of $5 million, payable as $3 million in cash and $2
million in shares of common stock of United Therapeutics, all payable at
closing. Unither will acquire an exclusive option to purchase the remaining
outstanding stock of Synergy. The closing is expected to occur by March 31,
2000, after obtaining the consents of current Synergy shareholders.

The license agreement provides that any inventions arising out of the
agreement will be owned solely by Unither if made by employees or others acting
solely on behalf of Unither, and jointly by Unither and Synergy if made by
employees or others acting jointly on behalf of Unither and Synergy. Each party
is responsible for prosecuting and maintaining its patents.

PATENT TERM EXTENSIONS

United Therapeutics believes that some of the patents to which it has
rights may be eligible for extensions of up to five years based upon patent term
restoration procedures in Europe and in the United States under the Waxman-Hatch
Act. For instance, under Waxman-Hatch, the Toray U.S. patent relating to the
compound beraprost could be extended by up to five years, giving the product
patent protection until as late as January 2008 if approval in the United States
is received before expiration of the original patent term in 2003. In addition,
patent extensions are available under similar laws in Europe. United
Therapeutics is considering which products it will seek to extend under
Waxman-Hatch and similar laws of other jurisdictions. See "-- Government
Regulation."

ORPHAN DRUG STATUS AND GRANTS

In June 1997, United Therapeutics was notified by the FDA that Uniprost for
primary pulmonary hypertension qualified for orphan drug status. In November
1999, United Therapeutics was notified that the FDA had approved an amendment to
the orphan designation for Uniprost from the treatment of primary pulmonary
hypertension to the treatment of "pulmonary arterial hypertension" (a
designation which includes both primary pulmonary hypertension and advanced
secondary pulmonary hypertension). The company believes that if Uniprost is
approved by the FDA, no other non-oral treatment for primary pulmonary
hypertension using prostacyclin will be approved by the FDA for seven years,
unless such other treatment is significantly safer or more effective than
Uniprost. In November 1998, United Therapeutics received a $415,000 grant from
the FDA's orphan drug grant program for the development of Uniprost for the
treatment of primary pulmonary hypertension, $265,000 of which has been
recognized as revenue through December 31, 1999.

In April 1999, United Therapeutics was notified by the FDA that beraprost
for advanced pulmonary hypertension qualified for orphan drug status. United
Therapeutics believes that if beraprost is approved by the
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FDA, no other oral treatment for advanced pulmonary hypertension using
prostacyclin will be approved by the FDA for seven years, unless such other
treatment is significantly safer or more effective than beraprost.

CLINICAL INVESTIGATOR NETWORK

United Therapeutics has established a multi-center clinical investigation
network with approximately 40 leading medical centers. This network consists of
pulmonologists and cardiologists from centers in North America, Europe,
Australia and Israel who collectively treat a majority of patients with primary
pulmonary hypertension and a substantial number of patients with secondary
pulmonary hypertension. These physicians understand and have extensive
experience in clinical research of severe pulmonary diseases. United
Therapeutics is continually expanding its clinical investigator network by
adding professionals who have demonstrated success in conducting clinical
research required for regulatory approval.

MANUFACTURING

United Therapeutics has generally contracted with qualified third-party
manufacturers to produce its drugs. This manufacturing strategy has enabled
United Therapeutics to direct financial resources to product licensing, clinical
development and anticipated commercialization efforts rather than diverting
resources to building manufacturing plants and establishing compliance with the
FDA's good manufacturing practices regulations.

SynQuest, Inc., formerly known as Steroids, Ltd., has been the manufacturer
of Uniprost for United Therapeutics. United Therapeutics has contracted with
Schweizerhall, Inc. as a second source of manufacturing. On October 7, 1999,
United Therapeutics acquired all the outstanding stock of SynQuest, which became
a wholly owned subsidiary of the company. The acquisition of this established
corporation engaged in the synthesis and manufacture of complex molecules has
allowed United Therapeutics to acquire the manufacturing capacity for its lead
product without having to invest its resources over time in building facilities
and initiating manufacturing regulatory compliance.

Cook Imaging Corporation continues to formulate the bulk active ingredient
in Uniprost for United Therapeutics. An analytical testing laboratory, Magellan
Laboratories Inc., tests the purity and stability of each batch of manufactured
Uniprost for compliance with FDA standards.

MARKETING AND SALES

In accordance with the implementation of United Therapeutics' strategic
alliance with MiniMed, United Therapeutics and MiniMed will jointly handle
aspects of distribution of Uniprost when formulated for subcutaneous delivery
for pulmonary hypertension. United Therapeutics will have primary sales and
marketing responsibility. United Therapeutics' marketing strategy will rely upon
existing chronic care specialty pharmacy distributors to handle doctor and
patient requests for Uniprost on a non-exclusive basis in the United States. See
"-- The MiniMed Strategic Alliance."

To further this strategy, United Therapeutics has entered into two
non-exclusive distributor agreements for the United States. In addition, United
Therapeutics has entered into an exclusive distributor agreement for Canada with
Paladin Labs Inc. United Therapeutics will sell Uniprost and MiniMed products to
these distributors at a discount from an average wholesale price set by United
Therapeutics. These distributors will be responsible for assisting patients with
obtaining reimbursement.

COMPETITION

Many drug companies engage in research and development to commercialize
products to treat blood vessel and lung diseases. United Therapeutics competes
with these companies for funding, access to licenses, personnel, third-party
collaborators and product development. Almost all of these companies have
substantially greater financial, marketing, sales, distribution and technical
resources, and more experience in research

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and development, clinical trials and regulatory matters, than United
Therapeutics. United Therapeutics is aware of existing treatments that will
compete with its products, including the following:

- Uniprost will compete with Flolan, the only FDA-approved treatment for
primary pulmonary hypertension;

- Uniprost and beraprost will compete with two FDA-approved drugs,
pentoxifylline and cilostazol, for the treatment of peripheral vascular
disease;

- UT-77 will compete with one FDA-approved drug, Prolastin, for the
treatment of chronic obstructive pulmonary disease; and

- Ketotop will compete with existing oral drugs containing the FDA-approved
pain reliever ketoprofen, as well as with a variety of other oral and
transdermal pain relievers.

Competitors may develop and commercialize additional products that compete
with United Therapeutics' products and may do so more rapidly than United
Therapeutics. For example, United Therapeutics understands that:

- Schering AG may develop Iloprost, a stable form of prostacyclin, as a
drug delivered through sustained inhalation to treat pulmonary
hypertension;

- Texas Biotechnology Corp. was conducting an uncontrolled study of a
potentially competitive drug for early-stage pulmonary hypertension;

- There are reports on the use of continuously inhaled nitric oxide as a
therapy for pulmonary hypertension of the newborn; and

- Several companies are developing other drugs and surgical methods for
treating different aspects of peripheral vascular disease.

GOVERNMENTAL REGULATION

The research, development, testing, manufacture, promotion, marketing and
distribution of drug products are extensively regulated by government
authorities in the United States and other countries. Drugs are subject to
rigorous regulation by the FDA in the United States and similar regulatory
bodies in other countries. The steps ordinarily required before a new drug may
be marketed in the United States, which are similar to steps required in most
other countries, include:

- Preclinical laboratory tests, preclinical studies in animals and
formulation studies and the submission to the FDA of an investigational
new drug application for a new drug or antibiotic;

- Adequate and well-controlled clinical trials to establish the safety and
efficacy of the drug for each indication;

- The submission of a new drug application to the FDA; and

- FDA review and approval of the new drug application prior to any
commercial sale or shipment of the drug.

Preclinical tests include laboratory evaluation of product chemistry
toxicity and formulation, as well as animal studies. The results of preclinical
testing are submitted to the FDA as part of an investigational new drug
application. A 30-day waiting period after the filing of each investigational
new drug application is required prior to the commencement of clinical testing
in humans. At any time during this 30-day period or at any time thereafter, the
FDA may halt proposed or ongoing clinical trials until the FDA authorizes trials
under specified terms. The investigational new drug application process may be
extremely costly and substantially delay development of United Therapeutics'
products. Moreover, positive results of preclinical tests will not necessarily
indicate positive results in clinical trials.

Clinical trials to support new drug applications are typically conducted in
three sequential phases, but the phases may overlap. During Phase I, the initial
introduction to the drug into healthy human subjects or
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patients, the drug is tested to assess metabolism, pharmacokinetics and
pharmacological actions and safety, including side effects associated with
increasing doses. Phase II usually involves studies in a limited patient
population to:

- Assess the efficacy of the drug in specific, targeted indications;

- Assess dosage tolerance and optimal dosage; and

- Identify possible adverse effects and safety risks.

If a compound is found to be potentially effective and to have an
acceptable safety profile in Phase II evaluations, Phase III trials, also called
pivotal studies, major studies or advanced clinical trails, are undertaken to
further demonstrate clinical efficacy and to further test for safety within an
expanded patient population at geographically dispersed clinical study sites.

After successful completion of the required clinical testing, generally a
new drug application is submitted. The FDA may request additional information
before accepting a new drug application for filing, in which case the
application must be resubmitted with the additional information. Once the
submission has been accepted for filing, the FDA has 180 days to review the
application and respond to the applicant. The review process is often
significantly extended by FDA requests for additional information or
clarification. The FDA may refer the new drug application to an appropriate
advisory committee for review, evaluation and recommendation as to whether the
application should be approved, but the FDA is not bound by the recommendation
of an advisory committee.

If FDA evaluations of the new drug application and the manufacturing
facilities are favorable, the FDA may issue either an approval letter or an
approvable letter. An approvable letter will usually contain a number of
conditions that must be met in order to secure final approval of the new drug
application and authorization of commercial marketing of the drug for certain
indications. The FDA may refuse to approve the new drug application or issue a
not approvable letter, outlining the deficiencies in the submission and often
requiring additional testing or information.

The FDA may designate a product as an "orphan drug" if the drug is a drug
intended to treat a rare disease or condition. A disease or condition is
considered rare if it affects fewer than 200,000 people in the United States, or
if it affects more than 200,000 people but will be sold for less money than it
will cost to develop. If a sponsor obtains the first FDA marketing approval for
a certain orphan drug, the sponsor will have a seven-year exclusive right to
market the drug for the orphan indication.

If regulatory approval of Uniprost or any of United Therapeutics' other
products is granted, it will be limited to certain disease states or conditions.
The manufacturers of approved products and their manufacturing facilities will
be subject to continual review and periodic inspections. In addition,
identification of certain side effects or the occurrence of manufacturing
problems after any of its drugs are on the market could cause subsequent
withdrawal of approval, reformulation of the drug, additional preclinical
testing or clinical trials, and changes in labeling of the product.

The Waxman-Hatch Act provides that patent terms may be extended during the
FDA regulatory review period for the related product. This period is generally
one-half the time between the effective date of an investigational new drug
application and the submission date of a new drug application, plus the time
between the submission date of a new drug application and the approval of that
application, subject to a maximum extension of five years. Similar patent term
extensions are available under European laws.

Outside the United States, United Therapeutics' ability to market its
products will also be contingent upon receiving marketing authorizations from
the appropriate regulatory authorities. The foreign regulatory approval process
includes all of the risks associated with FDA approval set forth above. The
requirements governing the conduct of clinical trials and marketing
authorization vary widely from country to country. At present, foreign marketing
authorizations are applied for at a national level, although within Europe
procedures are available to companies wishing to market a product in more than
one EU member state.

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Under a new regulatory system in the EU, marketing authorizations may be
submitted at either a centralized, a decentralized or a national level. The
centralized procedure is mandatory for the approval of biotechnology products
and high technology products and available at the applicant's option for other
products. The centralized procedure provides for the grant of a single marketing
authorization that is valid in all EU member states. The decentralized procedure
is available for all medicinal products that are not subject to the centralized
procedure. The decentralized procedure provides for mutual recognition of
national approval decisions, changes existing procedures for national approvals
and establishes procedures for coordinated EU actions on products, suspensions
and withdrawals. Under this procedure, the holder of a national marketing
authorization for which mutual recognition is sought may submit an application
to one or more EU member states, certify that the dossier is identical to that
on which the first approval was based or explain any differences and certify
that identical dossiers are being submitted to all member states for which
recognition is sought. Within 90 days of receiving the application and
assessment report, each EU member state must decide whether to recognize
approval. The procedure encourages member states to work with applicants and
other regulatory authorities to resolve disputes concerning mutual recognition.
Lack of objection of a given country within 90 days automatically results in
approval of the EU country.

United Therapeutics will choose the appropriate route of European
regulatory filing to accomplish the most rapid regulatory approvals. However,
the chosen regulatory strategy may not secure regulatory approvals or approvals
of the chosen product indications. United Therapeutics intends to secure
European regulatory approval for the use of Uniprost for pulmonary hypertension
and peripheral vascular disease in parallel with its United States and Canadian
regulatory filings. The company has contracted with Quintiles (UK) Ltd., a
contract research organization, to assist with its European clinical development
and regulatory actions.

PRODUCT LIABILITY INSURANCE

United Therapeutics owns a Products/Clinical Trials Liability Insurance
Policy, which it believes to be adequate for its needs. In addition, United
Therapeutics owns policies covering clinical trials in Austria, France, Spain
and Italy. United Therapeutics believes this insurance is adequate.

EMPLOYEES

United Therapeutics had 63 employees as of March 27, 2000. The company also
maintains active independent contractor relationships with various individuals
with whom it has month-to-month consulting contracts. The company believes its
employee relations are excellent. None of United Therapeutics' employees is
subject to a collective bargaining agreement.

FACILITIES

United Therapeutics currently maintains four facilities. The company's
clinical development office is in Research Triangle Park, North Carolina in
5,000 square feet of leased office space. United Therapeutics' corporate office
is in Silver Spring, Maryland in an 8,000 square foot building that it owns. The
company's subsidiary, Unither Telemedicine Services Corporation, leases
approximately 3,000 square feet of office space in the District of Columbia. The
company's subsidiary, SynQuest, Inc. leases approximately 10,000 square feet of
laboratory and office space in Chicago, Illinois. The Research Triangle Park
lease expires in June 2001, the District of Columbia lease expires in February
2001 with an extension at United Therapeutics' option, and the Chicago lease
expires in July 2001 with two one year lessee options to extend the lease.
United Therapeutics believes these facilities are adequate for its current and
planned operations.

In September 1999, United Therapeutics purchased a building adjacent to its
facilities in Silver Spring, Maryland. The building was fully leased to tenants
at the time of the purchase. The leases are expected to continue until their
expiration, which will be at various dates through 2002.

LEGAL PROCEEDINGS

United Therapeutics is not a party to any legal proceedings.

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MANAGEMENT

EXECUTIVE OFFICERS AND DIRECTORS

The following table sets forth certain information regarding the executive
officers and directors of United Therapeutics:

<TABLE>
<CAPTION>
NAME AGE POSITION
---- --- --------
<S> <C> <C>
Martine A. Rothblatt(1)(4)................ 45 Chairman, Chief Executive Officer and Director
James W. Crow, Ph.D.(1)(4)................ 55 President, Chief Operating Officer and Director
Gilles Cloutier, Ph.D.(1)................. 54 Executive Vice President, Business Development,
Treasurer and Director
Shelmer D. Blackburn, Jr.(1).............. 39 Vice President of Operations, Secretary and Director
Fred T. Hadeed............................ 35 Chief Financial Officer
Paul A. Mahon............................. 36 Assistant Secretary and General Counsel
Olivia Giscard d'Estaing.................. 37 Director
David Gooray, M.D.(2)(3).................. 49 Director
Jean-Guy Lambert(2)....................... 58 Director
Noah A. Samara(3)(4)...................... 42 Director
</TABLE>

- ---------------
(1) Member of Executive Committee.

(2) Member of Audit Committee.

(3) Member of Compensation Committee.

(4) Member of Nominating Committee.

Martine A. Rothblatt, J.D., M.B.A., is a co-founder of United Therapeutics.
She has served as Chairman of its Board of Directors and Chief Executive Officer
since its inception in 1996. In 1995, Ms. Rothblatt endowed the PPH Cure
Foundation to help find cures for pulmonary hypertension, which afflicts one of
her daughters, and continues to manage the foundation. Since 1990, she has
helped develop, as an independent consultant, satellite communications
businesses, including CD Radio Inc. (now Sirius Satellite Radio Inc.), which she
founded and served as Chairman and Chief Executive Officer until December 1992,
and WorldSpace Corp., which she co-founded and served as Chief Operating Officer
from January 1993 through January 1995. Since February 1995 Ms. Rothblatt has
also served as President of Beacon Projects, Inc., a company she incorporated
for her satellite communications consulting and real estate management
activities, and as Of Counsel to the law firm of Mahon Patusky Rothblatt &
Fisher, Chartered. Ms. Rothblatt also serves as Vice Chairman of the Law and
Medicine Committee of the International Bar Association and President of the
William Harvey Medical Research Foundation. Ms. Rothblatt devotes substantially
all of her time to the affairs of United Therapeutics.

James W. Crow, Ph.D., is a co-founder of United Therapeutics and has served
as President and Chief Operating Officer and as a member of its Board of
Directors since its inception in 1996. Prior to 1996, Dr. Crow worked for more
than 18 years at Glaxo Wellcome Inc., formerly Burroughs Wellcome Co., in
positions such as International Project Leader, Associate Medical Director and
Senior Clinical Research Scientist. While he was associate director of the
Pulmonary II Section, Dr. Crow led the team that developed and obtained FDA
approval for Flolan for the treatment of primary pulmonary hypertension patients
in September 1995.

Gilles Cloutier, Ph.D., is a co-founder of United Therapeutics and has
served as Executive Vice President, Business Development and Treasurer and as a
member of its Board of Directors since its inception in 1996. He also served as
Chief Financial Officer from December 1997 to January 2000. Prior to 1996, Dr.
Cloutier served as President of CatoPharma Canada, Inc. from April 1992 to
February 1997. From

35
<PAGE> 39

April 1990 to April 1992, Dr. Cloutier was the Vice President of Clinical
Operations at Quintiles Transnational Corp. Dr. Cloutier has more than 24 years
of experience in all phases of the drug development process in the United
States, Canada and other international locations.

Shelmer D. Blackburn, Jr., B.A., is a co-founder of United Therapeutics and
has served as Director of Operations, Secretary and a member of its Board of
Directors since its inception in 1996. In 1999, Mr. Blackburn was promoted to
Vice President of Operations. Prior to 1996, Mr. Blackburn worked for eight
years at Glaxo Wellcome Inc., formerly Burroughs Wellcome Co., where he was
responsible for the design and management of clinical trials for Flolan, as well
as for an artificial surfactant for the treatment of neonatal patients with
respiratory distress syndrome.

Fred T. Hadeed, B.S., C.P.A., was appointed Chief Financial Officer of
United Therapeutics in January 2000. Prior to joining United Therapeutics, Mr.
Hadeed worked for ten years at KPMG LLP, where he most recently served in their
life sciences practice.

Paul A. Mahon has served as General Counsel and Assistant Secretary of
United Therapeutics since its inception in 1996. He has been a principal and
managing partner of Mahon Patusky Rothblatt & Fisher, Chartered since its
formation in 1993.

Jean-Guy Lambert, M.B.A., has served on the Board of Directors of United
Therapeutics since July 1997. Since August 1996, Mr. Lambert has served as
Chairman, President and Chief Executive Officer of Dacha Capital, Inc., a
merchant bank. From June 1993 to August 1996, Mr. Lambert was President and
Chief Executive Officer of Intermont Inc., an oil and gas corporation. From
September 1991 to June 1993, Mr. Lambert acted as financial advisor to
Hydro-Quebec. Mr. Lambert is a director of several publicly traded companies,
including QR Canada Capital, Inc., Enerplus Resources Fund and Explogas Ltd.

Noah A. Samara, J.D., M.B.D., has served on the Board of Directors of
United Therapeutics since 1997. He has served as Chairman and Chief Executive
Officer of WorldSpace Corporation, a satellite communications company, since
August 1990.

David Gooray, M.D., has served on the Board of Directors of United
Therapeutics since December 1997. Dr. Gooray has practiced cardiovascular
medicine in Virginia, Maryland and the District of Columbia since July 1986.
Since 1986, he has also served as an instructor in medicine at Howard University
Medical School and principal investigator in a National Institutes of Health
study.

Olivia Giscard d'Estaing, M.S.B., has served on the Board of Directors
since July 1998. She has been employed as Director of Asset Management Services
at Banque Eurofin since 1988. She is in charge of mutual fund management with
assets over $1 billion.

The Amended and Restated Certificate of Incorporation of United
Therapeutics provides that the Board of Directors is to consist of three
classes, as nearly equal in size as the number of members permits. Each class of
directors generally has a term of three years. At each annual stockholders
meeting, the successors of the class of directors whose term expires at such
meeting shall be elected to hold office for a term expiring in three years.
United Therapeutics' Board of Directors is currently comprised of eight
directors. Executive officers are elected by, and serve at the discretion of,
the Board.

BOARD COMMITTEES

The Board of Directors has the following committees: an Executive
Committee; a Compensation Committee, which approves salaries and incentive
compensation for executive officers of the company and which administers the
company's equity incentive plan; an Audit Committee, which reviews audit
procedures, meets with United Therapeutics' independent auditors and assesses
the adequacy of the company's internal controls related to independent auditors;
and a Nominating Committee, which reviews and recommends candidates for the
Board of Directors.

36
<PAGE> 40

SCIENTIFIC ADVISORY BOARD

United Therapeutics has assembled a team of scientific and medical advisors
to advise it on issues related to specific pharmaceutical products. The current
group of advisors are experts in pulmonary hypertension and vascular biology.
United Therapeutics plans to assemble different advisory groups specific to
other products under development. In certain cases, these advisors have agreed
to be available for consultation for a specified number of days each year, but
individuals may consult and meet informally with the company on a more frequent
basis. All of these scientific and medical advisors are employed by major
medical schools, research institutions, hospitals, or other institutions and may
have other commitments that may limit their availability to United Therapeutics.
United Therapeutics' Scientific Advisory Board consists of the following
individuals:

Sir John Vane, D.Sc., F.R.S., is the 1982 Nobel Laureate in Physiology of
Medicine and discoverer of prostacyclin. Dr. Vane served as the Group Research
and Development Director at the Wellcome Foundation, Ltd. from 1974 to 1986, and
is President of the William Harvey Research Institute, The Medical School of
Queen Mary and Westfield College, London, which he founded in 1986. Since 1987,
he has been the non-executive Chairman of Technology Transfer Company of the
Imperial Cancer Research Fund. Since 1993, he has been Chairman of England's
Biomedical Research Education Trust. Throughout his distinguished career, Dr.
Vane has received numerous honors, in addition to over 25 Distinguished
Lectureships and 30 honorary memberships and degrees. He received his D. Phil.
and D.Sc. from Oxford University and is the author of more than 800
publications. He serves on the Board of Directors of deCODE genetics Inc. and,
until recently, served on the Board of Directors of Vanguard Medical Group plc,
a pharmaceutical company which he founded in 1991 and which is traded on the
London Stock Exchange.

Salvador Moncada, M.D., Ph.D., D.Sc., has been a Director of the Cruciform
Project at the University College, London, England since 1995. Dr. Moncada
co-discovered prostacyclin and Flolan. He was a Director of Research at the
Wellcome Foundation, Ltd. United Kingdom from 1986 to 1995. Dr. Moncada is also
internationally recognized as one of the key discoverers of the role of nitric
oxide in vascular biology. He is the author and editor of numerous scientific
textbooks, and the recipient of over 50 scientific awards, honorary memberships
and degrees.

Sir Magdi Yacoub, M.D., F.A.C.S., is a leading cardiothoracic surgeon and
developer of surgical techniques of heart and heart-lung transplantation. Dr.
Yacoub has been a professor at the National Heart and Lung Institute in London
since 1986.

Lewis Rubin, M.D., is the Professor of Medicine and Head of Pulmonary and
Critical Care Medicine, University of California, San Diego. Dr. Rubin is the
author of Primary Pulmonary Hypertension and numerous other publications on
pulmonary hypertension and pulmonary physiology. He is the recipient of the PPH
Cure Foundation 1997 Scientific Progress Award.

Robyn Barst, M.D., has been the Director since 1987 of the Children's
Pulmonary Hypertension Center, Columbia Presbyterian Medical Center. Dr. Barst
is an Associate Professor of Pediatrics and Medicine, Columbia University,
College of Physicians and Surgeons. She is the recipient of the PPH Cure
Foundation 1996 Scientific Progress Award and a leading expert on pulmonary
hypertension in children.

Urban Ramstedt, Ph.D., is the Director of Immunology at AVANT
Immunotherapeutics, Inc., Needham, Massachusetts. Dr. Ramstedt has written over
40 articles on immunology and gene therapy.

Tim Higenbottam, M.D., F.R.C.P., has been a Professor of Respiratory
Medicine at Sheffield University since 1995. Dr. Higenbottam is a leading
European expert on pulmonary hypertension. From 1981 to 1995, he was the Head of
Pulmonary Hypertension Medicine at Papworth Hospital, Cambridge, England.

DIRECTOR COMPENSATION

United Therapeutics reimburses each member of its Board of Directors for
out-of-pocket expenses incurred in connection with attending Board meetings.
Each director who is not also an employee also receives a fee of $8,000 per
year.

37
<PAGE> 41

SCIENTIFIC ADVISOR COMPENSATION

Each of Drs. Vane, Moncada, Yacoub and Ramstedt have agreements under which
he is entitled to receive options to purchase 1,666 shares of the company's
common stock for each year of service on the Scientific Advisory Board, plus
$3,000 per meeting attended. United Therapeutics granted 3,333 shares of common
stock to each of Drs. Vane, Moncada and Yacoub for his service from October 1996
through October 1998. United Therapeutics granted Dr. Ramstedt options to
purchase 1,666 shares of common stock for his service on the Scientific Advisory
Board during each of 1997, 1998 and 1999.

COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION

The members of the Compensation Committee for fiscal year 1999 were David
Gooray and Noah A. Samara. None of the Compensation Committee members has served
as an officer or employee of United Therapeutics or its subsidiaries, except Ms.
Rothblatt, who has been Chairman and Chief Executive Officer of United
Therapeutics since its inception in 1996. Effective March 1999, Ms. Rothblatt
resigned from the Compensation Committee, which currently consists solely of
non-employee directors.

EXECUTIVE COMPENSATION

The following table sets forth certain summary information concerning the
compensation awarded to or earned by United Therapeutics' Chief Executive
Officer and the other executive officers who earned in excess of $100,000 in
cash compensation during the years ended December 31, 1999 and 1998. All options
reflected in the chart were awarded under United Therapeutics' Amended and
Restated Equity Incentive Plan.

SUMMARY COMPENSATION TABLE

<TABLE>
<CAPTION>
SECURITIES
UNDERLYING
NAME AND PRINCIPAL POSITION YEAR SALARY BONUS OPTIONS(#)
- --------------------------- ---- -------- ------- ----------
<S> <C> <C> <C> <C>
Martine A. Rothblatt................................ 1999 $167,340 $18,000 80,000
Chairman and Chief Executive Officer 1998 120,000 -- 83,333

James W. Crow....................................... 1999 160,000 16,000 40,000
President and Chief Operating Officer 1998 150,000 -- 69,999

Gilles Cloutier..................................... 1999 160,000 16,000 20,000
Executive Vice President, Business Development, 1998 150,000 -- 50,000
Chief Financial Officer and Treasurer

Shelmer D. Blackburn, Jr............................ 1999 113,000 11,300 20,000
Director of Operations and Secretary 1998 100,000 -- 53,333
</TABLE>

STOCK OPTION GRANTS AND EXERCISES

The following tables show for the year ended December 31, 1999 certain
information regarding options granted to, and held at year end by, the named
executive officers. Each of the options listed in the table below was granted
pursuant to United Therapeutics' Amended and Restated Equity Incentive Plan and
vests upon the achievement of certain business milestones within certain
specified time periods. The first table is based on an aggregate of 501,254
options granted to employees, directors and consultants in 1999, including the
named executive officers. The exercise price per share of each option was equal
to the fair market value of the common stock on the date of grant. The value of
unexercised in-the-money options at December 31, 1999 is based on an assumed
price of $32.00, less the exercise price, without taking into account any taxes
that may be payable in connection with the transaction, multiplied by the number
of shares underlying the option.

38
<PAGE> 42

OPTION GRANTS IN FISCAL YEAR INDIVIDUAL GRANTS

<TABLE>
<CAPTION>
POTENTIAL REALIZABLE VALUE
NUMBER OF % OF TOTAL AT ASSUMED ANNUAL RATES
SECURITIES OPTIONS OF STOCK PRICE APPRECIATION
UNDERLYING GRANTED TO EXERCISE FOR OPTION TERM
OPTIONS EMPLOYEES IN PRICE PER EXPIRATION ---------------------------
NAME GRANTED(#) FISCAL YEAR SHARE DATE 5% 10%
- ---- ---------- ------------ --------- ---------- ------------ ------------
<S> <C> <C> <C> <C> <C> <C>
Martine A. Rothblatt........... 80,000 16.0% $27.50 9/09 $1,383,568 $3,506,233
James W. Crow.................. 40,000 8.0 27.50 9/09 691,789 1,753,117
Gilles Cloutier................ 20,000 4.0 27.50 9/09 345,892 876,558
Shelmer D. Blackburn........... 20,000 4.0 27.50 9/09 345,892 876,558
</TABLE>

Amounts reported in the potential realizable value column above are hypothetical
values that may be realized upon exercise of the options immediately prior to
the expiration of their term, calculated by assuming that the stock price on the
date of grant as determined by the Board of Directors appreciates at the
indicated annual rate compounded annually for the entire term of the option (10
years). The 5% and 10% assumed rates of appreciation are mandated by the rules
of the Securities and Exchange Commission and do not represent United
Therapeutics' estimate or projection of the future common stock price.

FISCAL YEAR-END OPTION VALUES

<TABLE>
<CAPTION>
NUMBER OF SECURITIES
UNDERLYING UNEXERCISED VALUE OF UNEXERCISED
OPTIONS AT IN-THE-MONEY OPTIONS AT
DECEMBER 31, 1999(#) DECEMBER 31, 1999($)
---------------------------- ----------------------------
NAME EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
---- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C>
Martine A. Rothblatt....................... 26,667 203,352 $413,338 $1,996,697
James W. Crow.............................. 25,001 143,331 445,021 1,756,621
Gilles Cloutier............................ 20,000 140,000 340,000 1,300,000
Shelmer D. Blackburn, Jr................... 15,001 91,665 275,021 1,178,297
</TABLE>

EXECUTIVE OFFICER EMPLOYMENT AGREEMENTS

In April 1999, United Therapeutics entered into an Executive Employment
Agreement with Martine A. Rothblatt, its Chief Executive Officer. The employment
agreement provides for an initial five year term ending on December 31, 2004,
and automatically renews for successive one-year periods after each year, unless
either party terminates the agreement. The current annual salary specified in
the agreement is $180,000. Ms. Rothblatt is entitled to bonuses for each year of
the initial term of the agreement in the form of stock options, in addition to
other discretionary bonuses that may be awarded by the Board of Directors. On
the first anniversary of United Therapeutics' initial public offering, Ms.
Rothblatt will receive an option to purchase the number of shares of common
stock equal to one percent of the increase in the company's market
capitalization after United Therapeutics' initial public offering up to that
date, divided by 18. At each of the next four anniversaries of the initial
public offering, Ms. Rothblatt will receive an option to purchase the number of
shares equal to one percent of the increase in United Therapeutics' market
capitalization since the last anniversary, divided by 18. These options will be
fully exercisable on the date of grant. The options will have an exercise price
equal to or exceeding the fair market value of a share of United Therapeutics'
common stock on the date of grant. The options are exercisable over five years
if Ms. Rothblatt is a 10% or greater stockholder on the date of grant, or 10
years otherwise. The maximum number of shares that may be granted to the Chief
Executive Officer in any one calendar year may not exceed 500,000 shares in
2000, 701,353 shares in 2001, 681,434 shares in 2002, 2,757,832 shares in 2003
and 3,298,898 shares in 2004.

If Ms. Rothblatt's employment is terminated due to her death or disability,
the company will continue to pay to Ms. Rothblatt or her estate her current base
salary through the end of the calendar year following such death or disability,
and, if her employment is terminated for disability, United Therapeutics will
pay for continued benefits under its short-term and long-term disability
insurance programs. If Ms. Rothblatt's employment is terminated by United
Therapeutics other than for cause, or if Ms. Rothblatt terminates her

39
<PAGE> 43

employment for good reason, as these terms are defined in the agreement,
including circumstances involving a change in control of United Therapeutics,
she will be entitled to a lump sum cash payment equal to the sum of:

- Her current base salary plus any bonus and incentive payments which have
been earned through the date of termination;

- The greater of her bonus and incentive payments for the prior year or the
average of such payments for the prior two years, on a prorated basis for
the year of termination;

- Three times the sum of her highest annual base salary for the preceding
12 months and the greater of her previous year's bonus and incentive
payment or the average of those payments for the previous two years; and

- The difference between the fair market price and the exercise price of
any non-vested options held by Ms. Rothblatt.

In addition, Ms. Rothblatt will receive certain employee and retirement
benefits. The agreement prohibits Ms. Rothblatt from engaging in activities
competitive with the company for five years following termination of her
employment.

United Therapeutics has entered into employment agreements with each of
Drs. Crow and Cloutier and Mr. Blackburn. The term of Dr. Crow's agreement ends
on July 15, 2002, and provides for an annual base salary of at least $150,000.
The term of Mr. Blackburn's agreement ends on August 1, 2002, and provides for
an annual base salary of at least $100,000. The term of Dr. Cloutier's agreement
ends on April 7, 2003, and provides for an annual base salary of at least
$150,000. Each of the agreements with Drs. Crow and Cloutier and Mr. Blackburn
also provides for an automatic annual renewal unless either party terminates
with at least 30 days notice to the other party. In addition, each of the
agreements provides that if the employee is terminated by United Therapeutics
other than for cause, or if the employee terminates the agreement for good
reason, as those terms are defined in the agreements, the employee is entitled
to his base salary through the full term of the agreement. In addition, each of
these agreements prohibits Drs. Crow and Cloutier and Mr. Blackburn from
accepting employment, consultancy or other business relationships with a
competitor of United Therapeutics for twelve months following his last receipt
of compensation from United Therapeutics.

AMENDED AND RESTATED EQUITY INCENTIVE PLAN

The company's Equity Incentive Plan originally became effective November
12, 1997, was subsequently amended and restated effective April 9, 1999, and was
amended again effective June 11, 1999. The Plan provides for the grant of
awards, including options, stock appreciation rights, restricted stock awards or
performances share awards or any other right or interest relating to shares or
cash to eligible directors, officers, key employees and consultants of United
Therapeutics and to employees of the company's subsidiaries. As amended, a total
of 14,939,517 shares of common stock has been reserved and is available for
awards under the Plan, including 7,939,517 shares of common stock specifically
reserved for stock option grants to the Chief Executive Officer in accordance
with her Executive Employment Agreement. The maximum number of shares that may
be granted to any one or more participants in any calendar year may not exceed
500,000 shares. The maximum number of shares that may be granted to the Chief
Executive Officer in any one calendar year may not exceed 500,000 shares in
2000, 701,353 shares in 2001, 681,434 shares in 2002, 2,757,832 shares in 2003
and 3,298,898 shares in 2004.

The Plan is administered by the Compensation Committee, which must consist
of two or more non-employee directors approved by the Board. The committee has
the power to determine the terms and conditions of awards, including but not
limited to the exercise price, the number of shares of common stock subject to
each award, the vesting provisions of each award and the form of consideration
payable upon exercise. In addition, the committee has the authority to amend,
modify or terminate the Plan, provided that no action may affect any shares
previously issued and sold or any award previously granted under the Plan
without the written consent of the participant.

40
<PAGE> 44

Options granted under the Plan are not generally transferable by the
optionee. Options granted under the Plan must generally be exercised within 10
years, subject to earlier termination upon termination of the holder's
employment, disability or death, but in no event later than the expiration of
the option's term. The exercise price of all options granted under the Plan must
be at least equal to the fair market value of the underlying shares of common
stock on the date of the grant. Incentive stock options granted to any
participant who owns 10% or more of United Therapeutics' outstanding common
stock must have an exercise price equal to or exceeding 110% of the fair market
value of a share of common stock on the date of the grant and must not be
exercisable for longer than five years.

Under the Plan, a participant may also be awarded a "performance award,"
which means that the participant may receive cash, stock or other awards which
is contingent upon achieving performance goals established by the committee. The
committee may also make "deferred share" awards under the Plan. A participant
who receives a deferred share award is entitled to receive the company's stock
in the future for services performed between the date of the award and the date
the participant may receive the stock.

A participant who is granted a "stock appreciation right" under the Plan
has the right to receive all or a percentage of the fair market value of a share
of stock on the date of exercise of the stock appreciation right minus the grant
price of the stock appreciation right determined by the committee. If a stock
appreciation right is granted in connection with an incentive stock option, the
grant price must not be less than the fair market value of the stock on the date
of grant. Finally, the committee may make "restricted stock" awards under the
Plan. Restricted stock granted under the Plan is subject to such terms and
conditions as the committee determines when it makes the award, and carries
voting, dividend and other ownership rights as set forth in the award agreement
relating to the restricted stock. Unless the committee otherwise provides, upon
termination of employment during the period when the restrictions apply, the
participant's restricted stock is forfeited to United Therapeutics.

In the event of certain changes of control of United Therapeutics, the
Compensation Committee has discretion to provide that any award under the Plan
that may be exercised will become fully exercisable, and/or that all
restrictions on any awards under the Plan will lapse as the Compensation
Committee determines, which may be prior to the change of control.

As of December 31, 1999 options to purchase 1,412,724 shares of common
stock were outstanding under the Plan and employee stock option agreements.
There are 13,626,793 shares reserved for future grants or purchases under the
Plan, including 7,939,517 shares of common stock reserved for issuance to the
Company's Chairman and Chief Executive Officer pursuant to her employment
agreement. No performance awards, deferred share awards, stock appreciation
rights or restricted stock awards are outstanding under the Plan. The Plan will
terminate in November 2007, unless terminated sooner by the Board.

401(K) PLAN

United Therapeutics has established an Employees' Retirement Plan, which is
intended to qualify under Sections 401(a) and 401(k) of the Internal Revenue
Code. Generally, all employees are eligible to participate in the 401(k) plan
after they complete one year of service. The purpose of the plan is to reward
eligible employees by providing certain retirement benefits funded through a
trust fund established as part of the plan. Eligible employees electing to
participate in the 401(k) plan may defer a portion of their compensation (up to
15% of their total compensation, subject to a $10,000 per year maximum). Such
deferred compensation amounts are contributed by the employee to the plan and
are allocated to investment options at the election of the employee. United
Therapeutics may, but is not required to, contribute a matching amount each year
to the plan for each employee. The plan does not include a company stock fund as
an investment option.

REPORT OF THE COMPENSATION COMMITTEE

United Therapeutics' executive compensation program is administered by the
Compensation Committee. In addition to base salary, compensation for United
Therapeutics' executive officers may include annual performance bonuses, stock
options pursuant to the Amended and Restated Equity Incentive Plan and
otherwise. It is the intention of the Compensation Committee to use salary and
bonuses as compensation for
41
<PAGE> 45

current and past performance, while using stock options and restricted stock
grants to provide incentives for superior long-term performance. To establish
compensation for executive officers of United Therapeutics, the Compensation
Committee uses subjective performance evaluations, and with respect to executive
officers other than Ms. Rothblatt, the salary and bonus recommendations of Ms.
Rothblatt.

Ms. Rothblatt's 1999 compensation was determined in accordance with her
Executive Employment Agreement. Each of the other named executive officers also
has an employment agreement with the Company. In 1999, Ms. Rothblatt and each of
the other executive officers received a cash bonus in an amount equal to 10% of
his or her base salary, which bonus was based upon the achievement of certain
development and performance goals by the Company in 1999.
Members of the Compensation Committee

Noah A. Samara
David Gooray

42
<PAGE> 46

COMPARISON OF 6 MONTH CUMULATIVE TOTAL RETURN

AMONG UNITED THERAPEUTICS CORPORATION,
THE S&P MID CAP 400 INDEX AND THE S&P BIOTECHNOLOGY INDEX
[6 MOS COMPARISON CUMULATIVE TOTAL RETURN]

<TABLE>
<CAPTION>
UNITED S&P MIDCAP 400 S&P BIOTECHNOLOGY
THERAPEUTICS -------------- -----------------
CORPORATION
------------
<S> <C> <C> <C>
6/17/99 * 100.00 100.00 100.00
12/31/99 377.44 113.09 189.92
</TABLE>

- ---------------
* Date of United Therapeutics' initial public offering.

43
<PAGE> 47

CERTAIN TRANSACTIONS

In August 1999, Unither Telemedicine Services Corporation entered into an
agreement to form Quantum Medical Corporation, a Delaware corporation. Unither
Telemedicine received approximately 35 percent of the initial outstanding common
stock of Quantum Medical Corporation. Ms. Rothblatt will serve as Co-Chairman of
the new company. At December 31, 1999, Unither Telemedicine's investment in
Quantum Medical Corporation had an original cost of zero and was reported at
zero, and its equity in the underlying net assets was approximately $158,000.

In July 1999, a subsidiary of Unither Telemedicine Services Corporation
entered into an agreement to form WonderClick.com (formerly AboveCable.com,
Inc.), a Delaware corporation, to provide Internet access via cable television
portals worldwide. This subsidiary received 20 percent of the initial
outstanding common stock of WonderClick.com and the exclusive rights to offer
telemedicine and electronic health services at the portal level. Martine A.
Rothblatt, the Chairman and Chief Executive Officer of United Therapeutics, will
serve as Vice Chair and a director of WonderClick.com. WorldSpace Corporation
purchased a 50 percent common stock shareholding in the new corporation. The
Chairman and Chief Executive Officer of WorldSpace is a major stockholder and
member of the Board of Directors of United Therapeutics. As of December 31,
1999, the equity investment by the subsidiary of Unither Telemedicine in
WonderClick.com had an original cost of zero and was reported at zero. The
subsidiary's equity in the underlying net assets was approximately $349,000.

On April 29, 1998, United Therapeutics purchased an office building for its
corporate headquarters from an entity owned by Ms. Rothblatt for approximately
$581,000, including expenses. United Therapeutics leased office space from
Beacon Projects, Inc. in 1997 and 1998 under a lease that was terminated when
the company purchased its building. Ms. Rothblatt is the President and owner of
Beacon Projects. Payments under that lease totaled $12,000 for the year ended
December 31, 1998, and $15,000 for the year ended December 31, 1997. In
addition, Unither Telemedicine Services Corporation, a subsidiary of United
Therapeutics, entered into a lease for office space with Beacon Projects in
March 1999. Payments under this lease will be approximately $30,000 annually
until the lease expires in 2001. The Board of Directors approved these
transactions based on independent appraisals and without the participation of
Ms. Rothblatt. United Therapeutics believes that the terms of each of the
transactions were at least as favorable as terms it could have obtained in arm's
length transactions with an independent third party.

Each of Ms. Rothblatt, Paul A. Mahon, General Counsel and Assistant
Secretary of United Therapeutics, and Christopher Patusky, an officer of the
company's telemedicine subsidiary, is a principal of the law firm Mahon Patusky
Rothblatt & Fisher, Chartered, which United Therapeutics has retained in the
past and intends to retain in the future. United Therapeutics paid the law firm
approximately $338,000 during the year ended December 31, 1999, approximately
$157,000 during the year ended December 31, 1998, approximately $81,000 during
the year ended December 31, 1997 and approximately $5,000 during the period from
inception to December 31, 1996.

In 1998, United Therapeutics entered into a cooperative drug discovery
agreement with William Harvey Research Limited. United Therapeutics paid
$258,000 during the year ended December 31, 1999 and $162,000 for the year ended
December 31, 1998 under this agreement. Under the agreement, United Therapeutics
is required to pay William Harvey a royalty equal to 10% of net sales and
license fees that the company earns from discoveries of William Harvey. Ms.
Rothblatt is president of William Harvey Medical Research Foundation, an
affiliate of William Harvey Research Limited.

During 1997, Ms. Rothblatt loaned United Therapeutics $500,000 at an
interest rate of 10% per annum. On August 19, 1997, principal and accrued
interest totaling $508,334 was converted into common stock pursuant to the terms
of the loan agreement. The company issued to Ms. Rothblatt 309,428 shares at
approximately $1.62 per share.

During 1996 and 1997, United Therapeutics earned substantially all of its
revenue from the PPH Cure Foundation. Ms. Rothblatt is also a Director of the
PPH Cure Foundation. United Therapeutics earned $115,909 for the year ended
December 31, 1997, and $153,972 during the period from the date of inception of
June 26, 1996 through December 31, 1996.

The Amended and Restated Certificate of Incorporation and the Amended and
Restated By-laws provide that United Therapeutics will indemnify each of its
directors and officers to the fullest extent permitted by the Delaware General
Corporation Law. In addition, United Therapeutics has entered into indemnity
agreements with each of the directors, which provide that United Therapeutics
will indemnify each director to the fullest extent permitted by law.

44
<PAGE> 48

PRINCIPAL STOCKHOLDERS

The following table sets forth certain information with respect to the
beneficial ownership of United Therapeutics' common stock as of March 27, 2000
by each person who United Therapeutics knows owns more than 5% of its common
stock, each of its directors, each of its named executive officers, and all of
its directors and executive officers as a group. The address of each person
listed below is the company's address. Beneficial ownership is determined in
accordance with the rules of the Securities and Exchange Commission and
generally includes voting or investment power with respect to securities.
Beneficial ownership also includes shares of stock subject to rights, options
and warrants currently exercisable or convertible, or exercisable or convertible
within 60 days of the date of this table. Percentage of beneficial ownership is
based on 18,503,218 shares of common stock outstanding. Unless otherwise
indicated, to the knowledge of United Therapeutics, all persons listed have sole
voting and investment power with respect to their shares of common stock, except
to the extent authority is shared by spouses under applicable law.

<TABLE>
<CAPTION>
NUMBER OF SHARES PERCENTAGE OF
OF COMMON STOCK OUTSTANDING
NAME BENEFICIALLY OWNED SHARES
---- ------------------ -------------
<S> <C> <C>
Noah A. Samara.............................................. 2,255,229 12.2%
Martine A. Rothblatt(1)..................................... 1,223,927 6.6%
Jean-Guy Lambert(2)......................................... 475,276 2.6%
James W. Crow(3)............................................ 440,001 2.4%
Gilles Cloutier(4).......................................... 436,666 2.4%
Shelmer D. Blackburn, Jr.(5)................................ 426,409 2.3%
Olivia Giscard d'Estaing(6)................................. 134,676 *
David Gooray, M.D........................................... 11,333 *
All directors and executive officers as a group (10
persons)(7)............................................... 5,426,204 29.3%
</TABLE>

- ---------------
* Represents less than one percent.

(1) Includes 17,776 shares held by Ms. Rothblatt's minor children and 403,204
shares held by her spouse. Ms. Rothblatt disclaims beneficial ownership of
such shares. Also includes 40,000 shares of common stock issuable upon
exercise of stock options within 60 days.

(2) Includes 395,000 shares of common stock owned by Dacha Capital, Inc. Mr.
Lambert is the President and Chief Executive Officer of Dacha Capital. Mr.
Lambert disclaims beneficial ownership of shares held by Dacha Capital
except to the extent of his proportionate interest therein. Also includes
41,666 shares of common stock issuable upon exercise of stock options within
60 days.

(3) Includes 36,668 shares of common stock issuable upon exercise of stock
options within 60 days.

(4) Includes 416,666 owned by The Hammock House Inc., LLC. Dr. Cloutier is the
Managing Director of Hammock House. Also includes 30,000 shares of common
sock issuable upon exercise of stock options within 60 days.

(5) Includes 21,668 shares of common stock issuable upon exercise of stock
options within 60 days.

(6) Includes 149,443 shares of common stock owned by Caisse Central des Banques
Populaires, an affiliate of Eurofin. Ms. Giscard d'Estaing is the Director
of Asset Management at Banque Eurofin. Ms. Giscard d'Estaing disclaims
beneficial ownership of shares held by Caisse Central des Banques
Populaires.

(7) Includes 183,335 shares of common stock issuable upon exercise of stock
options within 60 days.

45
<PAGE> 49

SELLING STOCKHOLDERS

United Therapeutics is registering all 2,500,000 shares covered by this
prospectus on behalf of the selling stockholders named in the table below.
United Therapeutics issued all of the shares to the selling stockholders in a
private placement transaction. United Therapeutics has registered the shares to
permit the selling stockholders and their pledgees, donees, transferees or other
successors-in-interest that receive their shares from the selling stockholders
as a gift, partnership distribution or other non-sale related transfer after the
date of this prospectus to resell the shares when they deem appropriate.

In the purchase agreement, each selling stockholder has represented that it
acquired the shares of common stock for investment and with no present intention
of distributing those shares. In addition, each selling stockholder has
represented that it qualifies as an "accredited investor" as such term is
defined in Rule 501 under the Securities Act of 1933. United Therapeutics agreed
in the purchase agreement to prepare and file a registration statement as soon
as practicable and to bear all expense other than fees and expenses of counsel
or other advisors for the selling stockholders and underwriting discounts and
commissions and brokerage commissions and fees. Accordingly, in recognition of
the fact that the selling stockholders, even though they purchased the shares
without a view to distribution, may wish to be legally permitted to sell the
shares when each deems appropriate, United Therapeutics filed with the SEC a
registration statement on Form S-1, of which this prospectus forms a part.
United Therapeutics has also agreed to prepare and file any amendments and
supplements to the registration statement as may be necessary to keep the
registration statement effective until the earlier of:

- two years after the effective date of the registration statement; or

- the date on which the shares offered in this prospectus may be resold by
the selling stockholders without registration in accordance with Rule
144(k) under the Securities Act of 1933 or any other rule of similar
effect.

None of the selling stockholders has had a material relationship with
United Therapeutics within the past three years except as a result of the
ownership of the shares offered in this prospectus.

The following table sets forth the name of each of the selling
stockholders, the number of shares owned by each of the selling stockholders
prior to this offering, the total number of shares offered under this
prospectus, and the number of shares of common stock owned by each of the
selling stockholders after this offering is completed. The number of shares in
the column "Number of Shares Being Offered" represent all of the shares that
each selling stockholder may offer under this prospectus. United Therapeutics
does not know how long the selling stockholders will hold the shares before
selling them and currently has no agreements, arrangements or understandings
with any of the selling stockholders regarding the sale of any of the shares.
The table assumes all shares being offered in this offering are sold to
non-affiliates of the selling stockholders. The shares offered by this
prospectus may be offered from time to time by the selling stockholders named
below.

<TABLE>
<CAPTION>
SHARES BENEFICIALLY PERCENT NUMBER OF SHARES BENEFICIALLY
OWNED OF SHARES BEING OWNED
NAME OF SELLING STOCKHOLDER PRIOR TO OFFERING OUTSTANDING OFFERED AFTER OFFERING
--------------------------- ------------------- ----------- ------------ -------------------
<S> <C> <C> <C> <C>
BayStar Capital, LP.................... 100,000 0.5% 100,000 0.00
BayStar International, Ltd............. 100,000 0.5% 100,000 0.00
SMALLCAP World Fund, Inc............... 1,200,000 6.5% 1,200,000 0.00
Four Partners.......................... 150,000 0.8% 150,000 0.00
Franklin Aggressive Growth Fund,
Inc.................................. 35,000 0.2% 35,000 0.00
Franklin Biotechnology Discovery Fund,
Inc.................................. 65,000 0.4% 65,000 0.00
Galleon Healthcare Overseas, Ltd....... 77,152 0.4% 77,152 0.00
Galleon Healthcare Partners, L.P....... 22,848 0.1% 22,848 0.00
Putnam Capital Appreciation Fund....... 32,900 0.2% 32,900 0.00
Putnam Health Sciences Trust........... 477,700 2.6% 477,700 0.00
Putnam Investment Funds -- Putnam
Capital Opportunities Fund........... 17,100 0.1% 17,100 0.00
</TABLE>

46
<PAGE> 50

PLAN OF DISTRIBUTION

The common stock offered by this prospectus may be sold from time to time
by selling stockholders, who consist of the persons or entities named under
"Selling Stockholders" above and those persons' pledgees, donees, transferees or
other successors-in-interest. United Therapeutics will pay all costs, expenses
and fees in connection with the registration of the common stock offered by this
prospectus. The selling stockholders must pay all brokerage commissions and
similar selling expenses relating to the sale of their shares. The selling
stockholders may sell their shares on the Nasdaq National Market or otherwise,
at market prices or at negotiated prices. They may sell shares by one or a
combination of the following:

- a block trade in which a broker or dealer so engaged will attempt to sell
the shares as agent, but may position and resell a portion of the block
as principal to facilitate the transaction;

- purchases by a broker or dealer as principal and resale by the broker or
dealer for its account pursuant to this prospectus;

- an exchange distribution in accordance with the rules of an exchange;

- ordinary brokerage transactions and transactions in which a broker
solicits purchasers; and

- in open-market transactions in reliance on Rule 144 under the Securities
Act of 1933, provided they meet the requirements of that rule.

In effecting sales, brokers or dealers engaged by the selling stockholders
may arrange for other brokers or dealers to participate. Brokers or dealers will
receive commissions or discounts from selling stockholders in amounts to be
negotiated prior to the sale. The selling stockholders and any broker-dealers
that participate in the distribution may be deemed to be "underwriters" within
the meaning of Section 2(11) of the Securities Act of 1933, and any proceeds or
commissions received by them, and any profits on the resale of shares sold by
broker-dealers, may be deemed to be underwriting discounts and commissions.
Because the selling stockholders may be deemed to be underwriters, they will be
subject to the prospectus delivery requirements of the Securities Act of 1933.

If any selling stockholder notifies United Therapeutics that a material
arrangement has been entered into with a broker-dealer for the sale of shares
through a block trade, special offering, exchange, distribution or secondary
distribution or a purchase by a broker or dealer, United Therapeutics will file
a prospectus supplement, if required by Rule 424 under the Securities Act of
1933.

United Therapeutics has agreed to indemnify each selling stockholder
against certain liabilities, including liabilities arising under the Securities
Act of 1933. The selling stockholders may agree to indemnify any agent, dealer
or broker-dealer that participates in transactions involving shares of the
common stock against certain liabilities, including liabilities arising under
the Securities Act of 1933.

47
<PAGE> 51

DESCRIPTION OF CAPITAL STOCK

United Therapeutics' authorized capital stock consists of 100 million
shares of common stock, par value $0.01, and 10 million shares of preferred
stock, par value $0.01.

COMMON STOCK

As of March 27, 2000, there were 18,503,218 shares of United Therapeutics'
common stock outstanding, including the 2,500,000 shares being offered by the
selling stockholders. The holders of common stock are entitled to one vote for
each share held of record on all matters submitted to a vote of United
Therapeutics' stockholders. The holders of common stock have no cumulative
voting rights with respect to the election of directors or any other matter.

Subject to preferences that may be applicable to any preferred stock
outstanding at the time, the holders of outstanding shares of common stock are
entitled to receive dividends out of assets legally available therefor at such
time and in such amounts as the Board of Directors may from time to time
determine.

Upon the liquidation, dissolution, distribution of assets or winding up of
United Therapeutics, holders of common stock are entitled to share ratably, in
proportion to the number of shares of common stock held, all the assets
remaining after distribution of the full preferential amounts due to the holders
of the outstanding shares of preferred stock, if any. A consolidation, merger or
reorganization of United Therapeutics with any other corporation, or a sale of
all or substantially all of the assets shall not be considered a dissolution,
liquidation or winding up of United Therapeutics.

The Amended and Restated Certificate of Incorporation denies holders of
common stock all preemptive rights and rights to covert their common stock into
any other securities. There are no redemption or sinking fund provisions
applicable to the common stock. All outstanding shares of common stock are fully
paid and nonassessable.

PREFERRED STOCK

Pursuant to United Therapeutics' Amended and Restated Certificate of
Incorporation, the Board of Directors has the authority, without further action
by the stockholders, to issue up to 10 million shares of preferred stock in one
or more series and to fix the rights, preferences, privileges and restrictions
thereof, including dividend rights, conversion rights, voting rights, terms of
redemption, liquidation preferences, sinking fund terms and the number of shares
constituting any series or the designation of such series, without any further
vote or action by the stockholders. The issuance of preferred stock could
adversely affect the voting power of holders of common stock, and the likelihood
that such holders will receive dividend payments and payments upon liquidation
may have the effect of delaying, deferring or preventing a change in control of
United Therapeutics, which could have a depressive effect on the market price of
United Therapeutics' common stock. United Therapeutics has no present plan to
issue any shares of preferred stock.

REGISTRATION RIGHTS

Holders of 3,420,449 shares of common stock, including the 2,500,000 shares
being offered by this prospectus, are entitled to certain rights with respect to
the registration of such shares under the Securities Act of 1933. If United
Therapeutics proposes to register any of its securities under the Securities
Act, either for its own account or for the account of other stockholders, the
holders of 920,449 shares of those shares subject to registration rights will be
entitled to notice of the registration and will be entitled to include, at
United Therapeutics' expense, their shares in the registration. In addition,
certain of the holders may require United Therapeutics, at its expense and on
not more than two occasions at any time beginning approximately December 17,
1999, to file a registration statement under the Securities Act, with respect to
their shares of common stock, and United Therapeutics will be required to use
its best efforts to effect the registration, subject to certain conditions and
limitations. Further, certain holders may require the company at its expense to
register their shares on Form S-3 when such form becomes available to the
company, subject to certain conditions and limitations.

48
<PAGE> 52

DELAWARE ANTI-TAKEOVER LAW AND CERTAIN CHARTER PROVISIONS

United Therapeutics is subject to Section 203 of the Delaware General
Corporation Law regulating corporate takeovers. Section 203, subject to certain
exceptions, prohibits a Delaware corporation from engaging in any business
combination with any interested stockholder for a period of three years
following the date that such stockholder became an interested stockholder
unless:

- Prior to such date, the Board of Directors of the corporation approved
either the business combination or the transaction that resulted in the
stockholder becoming an interested stockholder;

- Upon consummation of the transaction that resulted in the stockholder's
becoming an interested stockholder, the interested stockholder owned at
least 85% of the voting stock of the corporation outstanding at the time
the transaction commenced, excluding those shares owned by persons who
are directors and also officers, and employee stock plans in which
employee participants do not have the right to determine confidentially
whether shares held subject to the plan will be tendered in a tender or
exchange offer; or

- On or subsequent to such date, the business combination is approved by
the Board of Directors and authorized at an annual or special meeting of
stockholders, and not by written consent, by the affirmative vote of at
least two-thirds of the outstanding voting stock that is not owned by the
interested stockholder.

Section 203 defines "business combination" to include:

- Any merger or consolidation involving the corporation and the interested
stockholder;

- Any sale, transfer, pledge or other disposition involving the interested
stockholder of 10% or more of the assets of the corporation;

- Subject to certain exceptions, any transaction that results in the
issuance or transfer by the corporation of any stock of the corporation
to the interested stockholder; or

- The receipt by the interested stockholder of the benefit of any loans,
advances, guarantees, pledges or other financial benefits provided by or
through the corporation.

In general, Section 203 defines an "interested stockholder" as any entity or
person beneficially owning 15% or more of the outstanding voting stock of the
corporation and any entity or person affiliated with or controlling or
controlled by such entity or person. See "Risk Factors -- Because of
"Anti-Takeover" Provisions in United Therapeutics' Certificate of Incorporation
and Bylaws, A Third Party May Be Discouraged from Making a Takeover Offer Which
Could be Beneficial to United Therapeutics and The Public Stockholders" and
"Management -- Executive Officers and Directors."

LIMITATION OF LIABILITY AND INDEMNIFICATION

United Therapeutics' Amended and Restated Certificate of Incorporation and
Amended and Restated Bylaws contain certain provisions permitted under Delaware
law relating to the liability of directors. These provisions eliminate a
director's personal liability for monetary damages resulting from a breach of
fiduciary duty, except in circumstances involving certain wrongful acts, such
as:

- For any breach of the director's duty of loyalty to United Therapeutics
or its stockholders;

- For acts or omissions not in good faith or which involve intentional or a
knowing violation of law;

- For any acts under Section 174 of the Delaware General Corporation Law;
or

- For any transaction from which the director derives an improper personal
benefit.

These provisions do not limit or eliminate United Therapeutics' rights or any
stockholder's rights to seek non-monetary relief, such as an injunction or
rescission, in the event of a breach of director's fiduciary duty. These
provisions will not alter a director's liability under federal securities laws.
In addition, United Therapeutics has entered into separate indemnification
agreements with United Therapeutics' directors that provide the
49
<PAGE> 53

directors indemnification protection. United Therapeutics believes that these
provisions and agreements will assist it in attracting and retaining qualified
individuals to serve as directors and officers.

TRANSFER AGENT

The transfer agent and registrar for United Therapeutics' common stock is
The Bank of New York.

LISTING

United Therapeutics' common stock is quoted on the Nasdaq National Market
under the symbol "UTHR."

LAWYERS

The validity of the shares of common stock offered hereby will be passed
upon for United Therapeutics by Bryan Cave LLP. James L. Nouss, Jr., a partner
of Bryan Cave LLP, owns 8,333 shares of common stock of United Therapeutics and
is one of three managers of a private investment fund which owns 52,500 shares
of common stock of United Therapeutics.

EXPERTS

The consolidated balance sheets of United Therapeutics, as of December 31,
1998 and 1999, and the consolidated statements of operations, stockholders'
equity and cash flows for the years ended December 31, 1997, 1998 and 1999
included in this prospectus and registration statement have been included herein
in reliance upon the report of KPMG LLP, independent certified public
accountants, appearing elsewhere in this prospectus, given on the authority of
that firm as experts in accounting and auditing.

ADDITIONAL INFORMATION

United Therapeutics has filed with the Securities and Exchange Commission,
Washington, D.C. 20549, a registration statement on Form S-1 under the
Securities Act with respect to the shares of common stock offered hereby. This
prospectus does not contain all of the information set forth in the registration
statement and the exhibits and schedule filed therewith. Certain items are
omitted in accordance with the rules and regulations of the Commission. For
further information with respect to United Therapeutics and the common stock
offered hereby, reference is made to the registration statement and the exhibits
and schedule filed therewith. Statements contained in this prospectus as to the
contents of any contract or any other document referred to are not necessarily
complete, and in each instance, reference is made to the copy of such contract
or other document filed as an exhibit to the registration statement, each such
statement being qualified in all respects by such reference. A copy of the
registration statement, and the exhibits and schedule filed therewith, may be
inspected without charge at the public reference facilities maintained by the
Commission in Room 1024, 450 Fifth Street, N.W., Washington, D.C. 20549, and the
Commission's regional offices located at the Northwestern Atrium Center, 500
West Madison Street, Suite 1400, Chicago Illinois 60661 and Seven World Trade
Center, 13th Floor, New York, New York 10048, and copies of all or any part of
the registration statement may be obtained from such offices upon the payment of
the fees prescribed by the Commission. The public may obtain information on the
operation of the public reference room by calling the Commission at
1-800-SEC-0330. The Commission maintains a World Wide Web site that contains
reports, proxy and information statements and other information regarding
registrants that file electronically with the Commission. The address of the
site is http://www.sec.gov. The registration statement, including all exhibits
thereto and amendments thereof, has been filed electronically with the
Commission.

50
<PAGE> 54

UNITED THERAPEUTICS CORPORATION

INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

<TABLE>
<S> <C>
Report of KPMG LLP, Independent Auditors.................... F-2
Consolidated Balance Sheets as of December 31, 1999 and
1998...................................................... F-3
Consolidated Statements of Operations for the three years
ended December 31, 1999................................... F-4
Consolidated Statements of Stockholders' Equity for the
three years ended December 31, 1999....................... F-5
Consolidated Statements of Cash Flows for the three years
ended December 31, 1999................................... F-6
Notes to Consolidated Financial Statements.................. F-7
</TABLE>

F-1
<PAGE> 55

INDEPENDENT AUDITORS' REPORT

The Board of Directors
United Therapeutics Corporation:

We have audited the accompanying consolidated balance sheets of United
Therapeutics Corporation and subsidiaries (the Company) as of December 31, 1999
and 1998, and the related consolidated statements of operations, stockholders'
equity, and cash flows for each of the years in the three year period ended
December 31, 1999. These consolidated financial statements are the
responsibility of the Company's management. Our responsibility is to express an
opinion on these consolidated financial statements based on our audits.

We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the consolidated financial statements are
free of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the consolidated financial
statements. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
consolidated financial statement presentation. We believe that our audits
provide a reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to above
present fairly, in all material respects, the financial position of United
Therapeutics Corporation and subsidiaries as of December 31, 1999 and 1998, and
the results of their operations and their cash flows for each of the years in
the three year period ended December 31, 1999, in conformity with generally
accepted accounting principles.

KPMG LLP

McLean, Virginia
February 25, 2000

F-2
<PAGE> 56

UNITED THERAPEUTICS CORPORATION

CONSOLIDATED BALANCE SHEETS

<TABLE>
<CAPTION>
DECEMBER 31,
----------------------------
1999 1998
------------ ------------
<S> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents................................. $ 18,279,883 $ 6,779,067
Investments (note 9)...................................... 33,315,914 10,023,190
Accounts receivable....................................... 362,268 53,750
Prepaid expenses.......................................... 79,981 --
Other current assets...................................... 618,317 --
------------ ------------
Total current assets................................... 52,656,363 16,856,007
------------ ------------
Property, plant, and equipment (notes 3 and 8):
Land...................................................... 421,431 134,370
Buildings and improvements................................ 2,420,644 866,322
Furniture and equipment................................... 1,152,230 416,881
------------ ------------
3,994,305 1,417,573
Less -- accumulated depreciation.......................... (202,788) (50,065)
------------ ------------
Property, plant, and equipment, net.................... 3,791,517 1,367,508
------------ ------------
Certificate of deposit...................................... 539,545 509,506
Goodwill and other intangible assets, net (note 11)......... 2,690,533 --
Deferred offering costs..................................... 159,418 --
Other....................................................... 105,759 13,817
------------ ------------
Total assets........................................... $ 59,943,135 $ 18,746,838
============ ============
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable.......................................... $ 2,348,090 $ 1,707,103
Accrued expenses (note 13)................................ 2,107,805 14,161
Payroll taxes withheld.................................... 64,537 33,629
Current portion of notes and leases payable (note 8)...... 56,786 4,098
------------ ------------
Total current liabilities.............................. 4,577,218 1,758,991
Notes and leases payable, excluding current portion (note
8)........................................................ 1,783,705 310,262
Other liabilities........................................... 16,662 1,759
------------ ------------
Total liabilities...................................... 6,377,585 2,071,012
------------ ------------
Commitments and contingencies (notes 5 and 10)
Stockholders' equity (note 6):
Preferred stock, par value $.01, 10,000,000 shares
authorized at December 31, 1999 and 1998, no shares
issued................................................. -- --
Common stock, par value $.01, 100,000,000 and 50,000,000
shares authorized at December 31, 1999 and 1998,
respectively, 16,003,218 and 10,115,597 shares issued
and outstanding at December 31, 1999 and 1998,
respectively (note 14)................................. 160,032 101,156
Additional paid-in capital................................ 102,678,916 32,341,370
Accumulated deficit....................................... (49,273,398) (15,766,700)
------------ ------------
Total stockholders' equity............................. 53,565,550 16,675,826
------------ ------------
Total liabilities and stockholders' equity............. $ 59,943,135 $ 18,746,838
============ ============
</TABLE>

See accompanying notes to consolidated financial statements.
F-3
<PAGE> 57

UNITED THERAPEUTICS CORPORATION

CONSOLIDATED STATEMENTS OF OPERATIONS

<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
------------------------------------------------
1999 1998 1997
------------ ------------ ------------
<S> <C> <C> <C>
Revenues:
Sales................................................... $ 225,245 $ -- $ --
Grant revenue (note 3).................................. 211,250 53,750 115,909
------------ ------------ ------------
Total revenues....................................... 436,495 53,750 115,909
------------ ------------ ------------
Operating expenses:
Research and development................................ 30,715,255 11,015,053 2,026,718
General and administrative.............................. 4,977,983 2,366,494 1,006,354
Cost of sales........................................... 164,147 -- --
------------ ------------ ------------
Total operating expenses............................. 35,857,385 13,381,547 3,033,072
------------ ------------ ------------
Loss from operations................................. (35,420,890) (13,327,797) (2,917,163)
Other income (expense):
Interest income......................................... 1,925,326 510,068 134,726
Interest expense........................................ (57,744) (14,570) (8,334)
Other -- net............................................ 50,064 -- --
Write-down of investment (note 9)....................... -- -- (110,453)
------------ ------------ ------------
Total other income................................... 1,917,646 495,498 15,939
------------ ------------ ------------
Net loss before income tax........................... (33,503,244) (12,832,299) (2,901,224)
Income tax (note 7)....................................... (3,454) (3,100) --
------------ ------------ ------------
Net loss............................................. $(33,506,698) $(12,835,399) $ (2,901,224)
============ ============ ============
Net loss per common share -- basic and diluted............ $ (2.51) $ (1.54) $ (0.87)
============ ============ ============
Weighted average number of common shares
outstanding -- basic and diluted........................ 13,374,294 8,321,749 3,339,437
============ ============ ============
</TABLE>

See accompanying notes to consolidated financial statements.
F-4
<PAGE> 58

UNITED THERAPEUTICS CORPORATION

CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY

<TABLE>
<CAPTION>
COMMON STOCK ADDITIONAL
--------------------- PAID-IN ACCUMULATED
SHARES AMOUNT CAPITAL DEFICIT TOTAL
---------- -------- ------------ ------------ ------------
<S> <C> <C> <C> <C> <C>
Balance, December 31, 1996.............. 1,666,663 $ 16,667 $ 83,333 $ (30,077) $ 69,923
Issuance of common stock................ 3,900,078 39,001 6,881,149 -- 6,920,150
Conversion of loan principal and accrued
interest into common stock............ 309,428 3,094 505,240 -- 508,334
Stock issued in exchange for services... 6,664 67 19,933 -- 20,000
Net loss................................ -- -- -- (2,901,224) (2,901,224)
---------- -------- ------------ ------------ ------------
Balance, December 31, 1997.............. 5,882,833 58,829 7,489,655 (2,931,301) 4,617,183
Issuance of common stock................ 4,028,404 40,284 22,864,247 -- 22,904,531
Stock issued in exchange for services... 37,694 376 131,709 -- 132,085
Stock issued for exclusive license
agreement............................. 166,666 1,667 1,498,333 -- 1,500,000
Options and warrants issued for
exclusive license agreements.......... -- -- 353,000 -- 353,000
Options issued in exchange for
services.............................. -- -- 4,426 -- 4,426
Net loss................................ -- -- -- (12,835,399) (12,835,399)
---------- -------- ------------ ------------ ------------
Balance, December 31, 1998.............. 10,115,597 101,156 32,341,370 (15,766,700) 16,675,826
Issuance of common stock through private
sales................................. 111,370 1,114 1,989,251 -- 1,990,365
Issuance of common stock through initial
public offering....................... 4,500,000 45,000 48,826,737 -- 48,871,737
Issuance of common stock to underwriters
for over-allotment shares............. 675,000 6,750 7,507,759 -- 7,514,509
Stock issued for exclusive license
agreement............................. 500,000 5,000 8,995,000 -- 9,000,000
Stock issued for acquisition of
SynQuest, Inc......................... 101,251 1,012 2,802,051 -- 2,803,063
Options issued in exchange for
services.............................. -- -- 216,748 -- 216,748
Net loss................................ -- -- -- (33,506,698) (33,506,698)
---------- -------- ------------ ------------ ------------
Balance, December 31, 1999.............. 16,003,218 $160,032 $102,678,916 $(49,273,398) $ 53,565,550
========== ======== ============ ============ ============
</TABLE>

See accompanying notes to consolidated financial statements.
F-5
<PAGE> 59

UNITED THERAPEUTICS CORPORATION

CONSOLIDATED STATEMENTS OF CASH FLOWS

<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
-----------------------------------------
1999 1998 1997
------------ ------------ -----------
<S> <C> <C> <C>
Cash flows from operating activities:
Net loss.................................................... $(33,506,698) $(12,835,399) $(2,901,224)
Adjustments to reconcile net loss to net cash used in
operating activities:
Depreciation and amortization............................. 311,150 35,497 13,400
Loss on disposals of equipment............................ 9,168 -- --
Stock issued for exclusive license agreement.............. 9,000,000 1,500,000 --
Stock and options issued in exchange for services......... 216,748 136,511 20,000
Options and warrants issued for exclusive license
agreements.............................................. -- 353,000 --
Interest accrued on convertible loan...................... -- -- 8,334
Write-down of investment.................................. -- -- 110,453
Amortization of discount on investments................... (1,561,899) (23,229) --
Changes in operating assets and liabilities, net of effects
of acquisitions:
Accounts receivable....................................... (79,554) (53,750) --
Prepaid expenses.......................................... (69,679) -- --
Other current assets...................................... (221,405) -- --
Other noncurrent assets................................... (91,942) (10,214) 118
Accounts payable.......................................... 221,710 1,323,601 363,515
Accrued expenses.......................................... 2,068,606 (27,770) 41,931
Payroll taxes withheld.................................... (4,263) 5,716 18,560
Other liabilities......................................... 14,903 -- --
------------ ------------ -----------
Net cash used in operating activities................... (23,693,155) (9,596,037) (2,324,913)
------------ ------------ -----------
Cash flows used in investing activities:
Purchases of property, plant, and equipment............... (1,994,620) (1,033,953) (60,651)
Proceeds from disposals of property, plant and
equipment............................................... 2,350 -- --
Acquisition of SynQuest, Inc., net of cash acquired....... (312,626) -- --
Purchases of investments and certificates of deposit...... (114,325,864) (10,509,467) (110,453)
Sales and maturities of investments....................... 92,565,000 -- --
------------ ------------ -----------
Net cash used in investing activities................... (24,065,760) (11,543,420) (171,104)
------------ ------------ -----------
Cash flows from financing activities:
Proceeds from issuance of common stock.................... 58,376,611 22,904,531 6,920,150
Deferred offering costs................................... (159,418) -- --
Proceeds from convertible loan and notes payable.......... 1,798,000 -- 500,000
Payments of principal on notes payable.................... (742,907) (2,771) --
Principal payments under capital lease obligations........ (12,555) (1,381) --
------------ ------------ -----------
Net cash provided by financing activities............... 59,259,731 22,900,379 7,420,150
------------ ------------ -----------
Net increase in cash and cash equivalents............... 11,500,816 1,760,922 4,924,133
Cash and cash equivalents, beginning of year................ 6,779,067 5,018,145 94,012
------------ ------------ -----------
Cash and cash equivalents, end of year...................... $ 18,279,883 $ 6,779,067 $ 5,018,145
============ ============ ===========
Supplemental schedule of noncash investing and financing
activities:
Stock issued for acquisition of SynQuest, Inc............. $ 2,803,063 $ -- $ --
============ ============ ===========
Equipment acquired under a capital lease.................. $ 16,629 $ -- $ --
============ ============ ===========
Note payable issued for building.......................... $ -- $ 317,130 $ --
============ ============ ===========
Loan principal and accrued interest converted into common
stock................................................... $ -- $ -- $ 508,334
============ ============ ===========
Supplemental cash flow information -- cash paid for
interest.................................................. $ 57,744 $ 14,570 $ --
============ ============ ===========
</TABLE>

See accompanying notes to consolidated financial statements.
F-6
<PAGE> 60

UNITED THERAPEUTICS CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1. ORGANIZATION AND BUSINESS DESCRIPTION

United Therapeutics Corporation (the Company) was incorporated on June 26,
1996 under the laws of the State of Delaware. The Company is a pharmaceutical
company based in Silver Spring, Maryland and Research Triangle Park, North
Carolina, that is focused on clinical development and commercialization of in-
licensed compounds for the treatment of life-threatening diseases characterized
by high chronic care costs. The initial focus of the Company is the development
of therapies to treat patients with pulmonary hypertension, a generally fatal
disorder of the pulmonary arteries with no adequate long-term therapies. All of
the Company's products are currently in clinical trial programs.

The Company has four wholly owned subsidiaries: SynQuest, Inc., Lung Rx,
Inc., Unither Pharmaceuticals, Inc. (UPI) and Unither Telemedicine Services
Corporation (UTSC).

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

PRINCIPLES OF CONSOLIDATION

The consolidated financial statements include the financial statements of
United Therapeutics Corporation and its four wholly owned subsidiaries. All
significant intercompany balances and transactions were eliminated in
consolidation.

CASH EQUIVALENTS

Cash equivalents consist of highly liquid investments with original
maturities of three months or less. Cash equivalents consist of money market
funds and certificates of deposit and amount to $18,244,189 and $6,769,034 at
December 31, 1999 and 1998, respectively.

PROPERTY, PLANT, AND EQUIPMENT

Property, plant, and equipment are stated at cost. Depreciation is computed
using the straight-line method over the estimated useful lives of the assets.

Estimated useful lives of the assets are as follows:

<TABLE>
<S> <C>
Building and improvements........................... 39 years
Furniture and equipment............................. 3-10 years
Leasehold improvements.............................. Life of the lease
</TABLE>

RESEARCH AND DEVELOPMENT

Research and product development costs are expensed as incurred.

LICENSED TECHNOLOGY

Costs incurred in obtaining the license rights to technology in the
research and development stage and that have no alternative future uses are
expensed as incurred and in accordance with the specific contractual terms of
the applicable license agreements.

INCOME TAXES

Income taxes are accounted for in accordance with Financial Accounting
Standards Board Statement No. 109 (SFAS No. 109). Under the asset and liability
method of SFAS No. 109, deferred tax assets and liabilities are determined based
on the differences between the financial reporting and the tax bases of assets
and liabilities and are measured using the tax rates and laws that are expected
to apply to taxable income in the years in which those temporary differences are
expected to be recovered or settled.
F-7
<PAGE> 61
UNITED THERAPEUTICS CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

INVESTMENTS

The Company's investments are considered held-to-maturity securities.
Held-to-maturity securities are those securities which the Company has the
ability and intent to hold until maturity and are recorded at amortized cost,
adjusted for the amortization or accretion of premiums or discounts. Premiums
and discounts are amortized or accreted over the life of the related
held-to-maturity security as an adjustment to yield using the effective interest
method.

GOODWILL AND OTHER INTANGIBLE ASSETS

Goodwill represents the excess of purchase price and related costs over the
value assigned to the net tangible and intangible assets of businesses acquired.
Goodwill, resulting from the purchase of SynQuest, Inc. (note 11), is being
amortized using the straight-line method over five years. Other intangible
assets resulting from this purchase relate to covenants not to compete and
employment agreements and were determined on the basis of an independent
valuation. The covenants not to compete and employment agreements are being
amortized over three and four years, respectively, consistent with the terms of
the underlying agreements.

Periodically, the Company reviews the recoverability of goodwill and other
intangible assets. The measurement of possible impairment is based primarily on
the ability to recover the balance of the goodwill and other intangible assets
from expected future operating cash flows on an undiscounted basis. In
management's opinion, no material impairment exists at December 31, 1999.

FAIR VALUE OF FINANCIAL INSTRUMENTS

The carrying amounts of cash and cash equivalents, investments, accounts
receivables, accounts payable, accrued expenses, and payroll taxes withheld
approximate fair value due to their short maturities. The carrying amount of the
Company's notes payable approximate fair value, since they are adjustable rate
notes.

LOSS PER COMMON SHARE

Basic loss per common share is computed by dividing net loss by the
weighted average number of shares of common stock outstanding during the year.
Common stock equivalents, consisting of options and warrants, are not included
in the calculation as their effect would be anti-dilutive. Accordingly, diluted
loss per common share is the same as basic loss per common share.

USE OF ESTIMATES

The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements. Estimates also affect the reported amounts of revenue and expenses
during the reporting period. Actual results could differ from those estimates.

STOCK OPTION PLAN

The Company applies the provisions of SFAS No. 123, Accounting for
Stock-Based Compensation, to account for its stock options. SFAS No. 123 allows
companies to continue to apply the provisions of APB Opinion No. 25 and provide
pro forma net income and pro forma earnings per share disclosures for employee
stock options granted as if the fair-value-based method defined in SFAS No. 123
had been applied. The Company has elected to apply the provisions of APB Opinion
No. 25 and provide the pro forma disclosures of SFAS No. 123. The Company
accounts for non-employee stock option awards in accordance with SFAS No. 123.

F-8
<PAGE> 62
UNITED THERAPEUTICS CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

SALES

Sales in 1999 resulted from the synthesis and manufacture of complex
compounds by SynQuest, Inc., a wholly owned subsidiary. These sales were
generally made under fixed price agreements. The Company recognizes revenue
based on the percentage-of-completion method. Billings in excess of amounts
recognized as revenues are reported as deferred revenues. Losses on these
contracts, if any, are recognized as soon as they are anticipated.

GRANT REVENUE

Grant revenues in 1997 resulted primarily from a grant from the PPH Cure
Foundation (see note 3). Grant revenues in 1998 and 1999 resulted from an orphan
drug grant from the United States Food and Drug Administration (the FDA orphan
drug grant) to fund ongoing research related to UT-15. The FDA orphan drug grant
is a cost reimbursement award covering a two-year period beginning September 30,
1998. The FDA has committed funding totaling $415,000. This grant has no
milestones or significant deliverables other than the submission of periodic
technical reports. The Company recognizes revenues under the FDA orphan drug
grant when they are realizable and earned and only to the extent allowable
expenses are incurred. Recognized revenues are not contingent upon future
performance obligations and are not refundable to the FDA since they represent
reimbursements for past services and are not dependent on the outcome of the
research. Accounts receivable of $50,000 and $53,750 at December 31, 1999 and
1998, respectively, were for unbilled costs incurred. Amounts billed are subject
to audit by the FDA and could result in potential disallowances. Such
disallowances, if any, are not expected to be material.

DEFERRED OFFERING COSTS

Costs incurred in connection with the Company's planned sale of common
stock in a private placement are deferred and reported as assets in the
accompanying balance sheets (see note 14). Upon successful completion of the
sale, these deferred offering costs will be netted against the additional
paid-in capital resulting from the sale.

CONCENTRATIONS OF SUPPLIERS

The Company currently relies on a single supplier to test the purity and
stability of each batch of Uniprost and a single supplier for the delivery
device to administer Uniprost to patients. Although there are a limited number
of companies that could replace each of these suppliers, management believes
that other suppliers could provide similar services and materials. A change in
suppliers, however, could cause a delay in distribution of Uniprost, and in the
conduct of clinical trials, which would adversely affect the Company's research
and development efforts.

Similarly, the Company relies solely on Toray for the manufacture of
beraprost and solely on Global Medical Enterprises for the manufacture of
Ketotop under exclusive licensing agreements (see note 4). If these agreements
were to terminate, the Company would have no other source for these compounds.

3. RELATED PARTY TRANSACTIONS

REVENUE

During 1997, the Company earned substantially all of its revenue from a
grant from the PPH Cure Foundation (the Foundation). A director of the
Foundation is also the Chairman and CEO of the Company. This grant terminated at
the end of March 1997. Total revenue earned from the Foundation's grant was
$115,909 for the year ended December 31, 1997.

F-9
<PAGE> 63
UNITED THERAPEUTICS CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

BUILDING

In 1998, the Company purchased an office building for its corporate
headquarters from Beacon Projects, Inc., an entity owned by the Company's
Chairman and CEO. The purchase price, including related expenses, was
approximately $581,000.

OFFICE LEASES

During 1998, the Company leased office space from Beacon Projects, Inc., a
company owned by the Chairman and CEO of the Company. In August 1998, this lease
was terminated when the Company purchased the office building from the Chairman
and CEO of the Company. Payments made by the Company under this lease totaled
$12,000 for the year ended December 31, 1998.

In March 1999, Unither Telemedicine Services Corporation leased office
space from Beacon Projects, Inc. (see note 10).

LEGAL SERVICES

During 1999, 1998 and 1997, the Company obtained professional services from
a law firm affiliated with the Chairman and CEO and two executive officers. The
Company incurred expenses of approximately $338,000, $157,000, and $81,000
during the years ended December 31, 1999, 1998, and 1997, respectively, for
services rendered by the law firm.

RESEARCH AGREEMENT

During 1998, the Company entered into a cooperative drug discovery
agreement with William Harvey Research Limited (WHR) (see note 5). The Chairman
and CEO of the Company is president of William Harvey Medical Research
Foundation, an affiliate of WHR. Payments made to WHR were approximately
$258,000 and $162,000 for the years ended December 31, 1999 and 1998,
respectively.

RECEIVABLE FROM EMPLOYEE

At December 31, 1999, the Company had a non-interest bearing advance
totaling approximately $199,000 due from an employee of a subsidiary. The
advance is classified as other current assets in the accompanying balance sheets
and will be repaid to the Company in 2000.

4. LICENSE AGREEMENTS

GLAXO WELLCOME ASSIGNMENT

In January 1997, Glaxo Wellcome Inc. assigned to the Company patents and
patent applications for the use of the stable prostacyclin analog, UT-15 for the
treatment of pulmonary hypertension and congestive heart failure. Glaxo Wellcome
has a right to negotiate a license from the Company if the Company decides to
license any part of the marketing rights to a third party. Glaxo Wellcome waived
this right with respect to the agreement with MiniMed described below. Under the
agreement, Glaxo Wellcome is entitled to certain royalties from the Company for
a period of ten years from the date of the first commercial sale of any product
containing UT-15 (see note 5). If the Company grants to a third party any
license to UT-15, Glaxo Wellcome is also entitled to a percentage of all
consideration payable to the Company by such licensee. The Company is
responsible for all patent prosecution and maintenance for UT-15.

PHARMACIA & UPJOHN LICENSE

In December 1996, Pharmacia & Upjohn Company exclusively licensed to the
Company patents and a patent application for the composition and production of
the stable prostacyclin analog UT-15. Under the

F-10
<PAGE> 64
UNITED THERAPEUTICS CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

Pharmacia & Upjohn agreement, the Company paid an initial license fee and must
make additional milestone payments of up to $3,875,000 for orphan and non-orphan
indications of the compound. The Company will make royalty payments between 2.5
and 5.0 percent of net sales, subject to reduction based on required royalty
payments to Glaxo Wellcome, to Pharmacia & Upjohn until the later of the
expiration of the applicable patent or ten years after the date of the first
commercial sale of a product in a country defined as a milestone country under
the agreement. The agreement may be terminated earlier by either party in
certain circumstances, including upon a material breach by or bankruptcy of the
other party, and by the Company at any time upon 60 days' notice to Pharmacia &
Upjohn. Pursuant to the agreement, the Company is obliged to use its best
efforts to conduct a research and development program in the United States
relating to the use of the product containing the compound for at least one
indication, and to obtain regulatory approvals and market a product in the
United States and such other countries as the Company deems appropriate.

MINIMED INC.

The Company entered into an agreement with MiniMed in September 1997 to
collaborate in the design, development, and implementation of therapies to treat
pulmonary hypertension and peripheral vascular disease utilizing MiniMed
products and Uniprost (UT-15). The term of the agreement is for seven years
after the FDA grants a new drug approval for Uniprost and will be automatically
extended for additional 12-month periods unless otherwise terminated. The
agreement is subject to early termination in the event of a material breach or
bankruptcy of either party. The Company and MiniMed have established a
Management Committee comprised of two representatives from each company to
implement the agreement. MiniMed has agreed to establish a dedicated sales force
for Uniprost for advanced pulmonary hypertension, take responsibility for
marketing and sales of Uniprost to physicians who treat pulmonary hypertension,
train patients and care providers in the use of the MiniMed device with
Uniprost, provide the MiniMed device, related supplies and customer services to
the Company, and assist patients with third party reimbursement.

The guidelines implementing the agreement provide that the Company will
purchase pumps and supplies from MiniMed at a discount off of MiniMed's list
prices from time to time. In the event that there are any discoveries or
improvements arising out of work performed under the agreement, the parties will
have joint ownership of those discoveries or improvements. The guidelines
require the Company to purchase its Uniprost infusion pumps exclusively from
MiniMed unless MiniMed's infusion pumps fail to receive certain government
approvals.

TORAY INDUSTRIES LICENSES

In September 1998, United Therapeutics entered into an agreement with Toray
Industries, Inc. obtaining the exclusive right to develop and market beraprost
in the United States and Canada for the treatment of pulmonary vascular disease,
including pulmonary hypertension, plus certain additional rights of first
refusal for other products, therapies or territories. In exchange, United
Therapeutics paid Toray cash and 166,666 shares of common stock, and granted
Toray an option to purchase an additional 166,666 shares of common stock at an
exercise price of $9.00 per share (see note 6). United Therapeutics also agreed
to pay Toray milestone payments of up to $750,000. In March 1999, United
Therapeutics entered into an agreement with Toray obtaining the exclusive right
to develop and market beraprost in the United States and Canada for the
treatment of peripheral vascular disease. United Therapeutics paid Toray cash
and 500,000 shares of common stock and agreed to pay Toray milestone payments of
up to $750,000. License fees expensed as research and development totaled
$9,100,000 and $1,785,000 for the years ended December 31, 1999 and 1998,
respectively.

F-11
<PAGE> 65
UNITED THERAPEUTICS CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

all manufacturing rights for beraprost. United Therapeutics has agreed to
purchase beraprost solely from Toray at specified prices based on volume. The
agreements each set forth a product development schedule. In the event that
development by United Therapeutics falls significantly behind the schedule
specified in either agreement, Toray may terminate that agreement. Furthermore,
United Therapeutics is responsible under the agreements for achieving minimum
annual product net sales as determined in advance by mutual agreement, and in
the case of the first two years of commercial sales, minimum net sales of $2.5
million and $5 million. In the event that United Therapeutics is unable to meet
any minimum annual net sales requirement for two consecutive years, Toray may
convert the exclusive license to a non-exclusive license. United Therapeutics
would then be required to share any product marketing rights approved by the FDA
with a third-party licensee chosen by Toray. Each agreement expires 10 years
following FDA approval of beraprost for the particular disease indication.
United Therapeutics may extend each agreement for unlimited 12-month periods
with Toray's consent.

CORTECH LICENSE

In November 1998, United Therapeutics entered into an agreement with
Cortech, Inc. to obtain the exclusive right to develop and market a serine
elastase inhibitor compound, now known as UT-77, for all indications worldwide,
except for certain dermatological uses. In exchange, United Therapeutics made a
cash payment and granted Cortech a warrant to purchase 116,666 shares of common
stock, which vests only if United Therapeutics continues developing UT-77 after
November 2, 2000, and terminates in November 2004 (see note 6), and agreed to
make milestone payments in the event it elects to develop UT-77 after November
2, 2000 of up to $6,450,000 for non-orphan drug indications and pay royalty fees
between 6 and 10 percent of UT-77 net sales. License fees expensed as research
and development totaled $418,000 for the year ended December 31, 1998. Pursuant
to the agreement, United Therapeutics is required to use reasonable efforts to
develop and conduct research and pre-clinical and human clinical trials to
obtain all regulatory approvals to manufacture, market and commercialize the
products that United Therapeutics determines are commercially feasible. In
addition, United Therapeutics is responsible for a majority of the costs for
prosecuting and maintaining the patent covering UT-77. United Therapeutics may
choose to discontinue the development of the products without penalty upon
written notice to Cortech if the products do not satisfy United Therapeutics'
clinical needs for targeted indications. If United Therapeutics terminates the
agreement, however, Cortech will receive an exclusive royalty-free license to
use any improvements, know-how, data, information or regulatory filings or any
other intellectual property arising from United Therapeutics' performance under
the agreement. Cortech may terminate the agreement if United Therapeutics does
not commence Phase II clinical trials of UT-77 before May 2001, subject to
certain exceptions.

GLOBAL MEDICAL ENTERPRISES AGREEMENT

In February 1999, United Therapeutics entered into an agreement with Global
Medical Enterprises Ltd. and Global Medical Enterprises Ltd., LLC. This
agreement gives to United Therapeutics the exclusive right to commercialize and
sell Ketotop in the United States, Canada, Mexico, Central America and the
Caribbean for treatment of all indications. Global Medical holds these rights
under an exclusive sales and distribution agreement with Pacific
Pharmaceuticals, Inc., the Korean manufacturer of Ketotop. Both the agreement
between United Therapeutics and Global Medical and the agreement between Global
Medical and Pacific Pharmaceuticals expire in July 2008. The agreement between
United Therapeutics and Global Medical will be extended if Pacific
Pharmaceuticals extends its agreement with Global Medical. The agreement is
subject to early termination in the event of a material breach or bankruptcy of
either party or if the underlying agreement between Global Medical and Pacific
Pharmaceuticals is terminated. United Therapeutics has agreed to purchase
Ketotop solely from Global Medical. United Therapeutics will pay Global Medical
a product purchase price equal to Global Medical's cost of obtaining Ketotop
from Pacific Pharmaceuticals plus a profit percentage of between 15 and 23
percent. United Therapeutics and Global Medical will jointly

F-12
<PAGE> 66
UNITED THERAPEUTICS CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

determine Global Medical's compensation for sales in additional territories.
United Therapeutics is obligated under its agreement with Global Medical to
obtain trademark protection on behalf of Pacific Pharmaceuticals for Ketotop in
every jurisdiction where United Therapeutics has marketing rights. The Company
expects these costs to be immaterial.

On December 1, 1999, the Company and Global Medical Enterprises Ltd. formed
Ketotop, LLC, a Delaware limited liability company, to commercialize Ketotop in
Europe. The Company and Global Medical Enterprises Ltd. each own a one-half
interest in Ketotop, LLC and will jointly manage its operations. Global Medical
Enterprises Ltd. assigned to Ketotop, LLC, at no cost, the exclusive right to
commercialize and sell Ketotop in the European Union. Global Medical Enterprises
had received this exclusive right from Pacific Pharmaceuticals Inc. The Company
and Global Medical Enterprises Ltd. intend that Ketotop, LLC will sublicense
exclusive Ketotop commercialization rights to sublicensees in Europe which will
be responsible for the costs of commercializing Ketotop within their
subterritories. The Company agreed to provide its clinical data to Ketotop, LLC
in return for reciprocal clinical data access from Ketotop, LLC's European
sublicensees.

The Company contributed initial capital of $2,500 to Ketotop, LLC in 1999.
The agreement does not require the Company to contribute additional capital.

SHEARWATER POLYMERS AGREEMENT

In September 1999, the Company entered into an agreement with Shearwater
Polymers, Inc. The agreement grants to the Company the exclusive right to
Shearwater's know-how for the design, development, production, and use of a
technology known as pegylation to develop and produce sustained release
prostacyclin molecules for the possible treatment of pulmonary hypertension,
peripheral vascular disease, stroke, heart disease, cancer, and related diseases
worldwide. In exchange, the Company paid Shearwater $100,000 in cash and agreed
to pay Shearwater milestone payments of up to $2,900,000. Milestone payments
will come due upon the achievement of certain product development goals set
forth in the agreement and are expected to be paid over a period of
approximately six years. The Company also agreed to pay royalties ranging from 2
to 4 percent of net sales from developed products. Minimum annual royalties of
$1,000,000 are required commencing with the thirteenth month following
government approval of a developed product. License fees expensed as research
and development for the year ended December 31, 1999 were $100,000.

5. COMMITMENTS

CLINICAL TRIALS AND OTHER RESEARCH

The Company has contracted with universities and research organizations to
perform clinical trials and other research related to Uniprost and other
products. The Company generally pays all expenses incurred in carrying out the
clinical trials and research activities. Total expenses under these agreements
were approximately $16,600,000, $7,600,000, and $1,700,000 in 1999, 1998, and
1997, respectively. Total payments under these agreements in 2000 are not
expected to exceed $19,000,000.

F-13
<PAGE> 67
UNITED THERAPEUTICS CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

UNIVERSITY COLLEGE LONDON

In 1997, the Company entered into a cooperative drug discovery agreement
with University College London (UCL) to identify and develop compounds with
therapeutic effectiveness against pulmonary hypertension and other diseases
treatable by potassium channel compounds. Under the agreement, the Company is
required to pay UCL a royalty equal to a percentage of net sales and license
fees that the Company earns from discoveries and products developed by UCL. This
royalty obligation extends for 15 years or, if later, until any issued patents
expire. In 1999, the Company decided not to fund further drug development and
terminated the agreement. No discoveries were found as a result of this
agreement.

WILLIAM HARVEY RESEARCH LIMITED

In 1998, the Company entered into a cooperative drug discovery agreement
with William Harvey Research Limited (WHR) to identify and develop an antisense
therapy as a potential treatment for pulmonary hypertension. The agreement may
be terminated by the Company after 30 months. Under the agreement, the Company
is required to pay WHR a royalty equal to a percentage of net sales and license
fees that the Company earns from discoveries developed by WHR. This royalty
obligation extends for 15 years or, if later, until any issued patents expire.

MILESTONE AND ROYALTY PAYMENTS

The Company has in-licensed certain products under agreements described in
note 4. These agreements generally include milestone payments to be paid in cash
by the Company upon the achievement of certain product development and
commercialization goals set forth in each agreement. Total milestone payments
under these agreements may come due approximately as follows:

<TABLE>
<S> <C>
YEAR ENDING DECEMBER 31,
2000..................................................... $ 525,000
2001..................................................... 1,300,000
2002..................................................... 3,650,000
2003..................................................... 4,800,000
2004 and thereafter...................................... 4,400,000
</TABLE>

Additionally, certain agreements described in note 4 require the Company to
pay royalties. The royalties are generally based on a percentage of net sales or
other product fees earned by the Company. Royalties will become due when sales
are generated and will range from 2.5 to 30 percent of net product revenues as
defined in the respective agreements.

EMPLOYMENT AGREEMENT

In April 1999, the Company executed an employment agreement with its CEO.
The agreement establishes minimum compensation and benefits for a renewing five
year period. The agreement also requires the Company to issue to the CEO, on
each anniversary of the initial public offering over the next five years,
commencing in 2000, options to purchase a number of shares of common stock equal
to one percent of the increase in the Company's market capitalization after the
initial public offering over the prior year, divided by 18, subject to certain
annual limitations. The exercise price of the options will be 110 percent of the
fair market value of a share of common stock on the date of grant, or 100
percent of fair market value if the CEO owns less than 10 percent of the
Company's outstanding common stock on the date of grant. If the CEO is
terminated without cause or leaves with good reason, she will receive severance
equal to three years of base salary plus the value of any vested options.

F-14
<PAGE> 68
UNITED THERAPEUTICS CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

6. STOCKHOLDERS' EQUITY

COMMON STOCK

The Company was originally capitalized through the issuance of 1,666,663
shares of common stock for $0.06 per share, with a par value of $0.01. In 1997,
the number of authorized shares of common stock was increased from 20,000,000 to
50,000,000 shares. Also in 1997, 4,209,506 shares of common stock were issued at
prices ranging from $1.20 to $3.00. Of this total, 309,428 shares were issued as
a result of the conversion of a loan and accrued interest thereon from the
Chairman and CEO of the Company totaling $508,334.

On December 7, 1997, the Company's board of directors approved a
one-for-two reverse stock split of the Company's common stock. All common shares
and per share amounts in the accompanying financial statements have been
retroactively adjusted to reflect this reverse stock split. Authorized shares
and the par values of common and preferred stock were not affected.

In 1998, the Company issued 4,028,404 shares of common stock for cash at
prices ranging from $3.00 to $18.00.

In January and February 1999, the Company issued 111,370 shares of common
stock for cash at a price of $18.00 per share.

In April 1999, the Board of Directors authorized the filing of a
registration statement with the Securities and Exchange Commission for the sale
of up to 6,000,000 shares of common stock. On June 17, 1999, the Company's
initial public offering, which involved the sale of 4,500,000 shares of common
stock at $12.00 per share, was declared effective by the SEC. The Company closed
the initial public offering on June 22, 1999 and received net proceeds, after
deducting underwriting commissions and offering expenses, of approximately
$48,874,000.

In April 1999, the Company's Board of Directors and stockholders approved
an amendment to the Company's Certificate of Incorporation increasing the number
of authorized shares of common stock to 100,000,000 shares. On June 11, 1999,
the Company increased the total number of authorized shares of common stock to
100,000,000.

In April 1999, the Company's Board of Directors approved a one-for-three
reverse stock split of its outstanding common stock which was effected on June
11, 1999. Authorized shares and the par values of common and preferred stock
were not affected by the reverse split. All share and per share amounts in the
accompanying financial statements have been retroactively adjusted to reflect
the reverse stock split for all periods presented.

On July 16, 1999, the Company closed on the sale of 675,000 over-allotment
shares of common stock to its underwriters. The underwriters' over-allotment
option was exercised at the initial public offering price of $12.00 per share.
The net proceeds, after deducting underwriting commissions and offering
expenses, were approximately $7,515,000.

PREFERRED STOCK

A total of 10,000,000 shares of preferred stock with a par value of $0.01
were authorized in 1997. No preferred stock has been issued.

STOCK AND OPTIONS ISSUED FOR EXCLUSIVE LICENSE AGREEMENTS AND IN EXCHANGE
FOR SERVICES

In 1998 the Company issued 166,666 shares of common stock and options to
purchase 166,666 shares of common stock in exchange for an exclusive license
agreement. The stock was valued at $1,500,000, based on prices of similar
quantities of stock sold to unrelated parties during the period. The options
have an exercise price of $9.00 per share, are exercisable immediately, and
expire 30 days following the date of the Company's

F-15
<PAGE> 69
UNITED THERAPEUTICS CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

first filing of a New Drug Application in the United States for the licensed
product. The fair value of the options was estimated on the date of grant at
$185,000 using the Black-Scholes option pricing model with assumptions generally
consistent with those used for employee options. The total of $1,685,000 was
expensed as research and development in 1998.

In 1998, the Company issued warrants to purchase 116,666 shares of common
stock in exchange for an exclusive license agreement. The warrants have an
exercise price of $9.00 per share, are exercisable beginning in November 2000,
and expire in November 2004. The fair value of the warrants was estimated on the
date of grant at $168,000 using the Black-Scholes option pricing model with
assumptions generally consistent with those used for employee options and was
expensed as research and development in 1998.

In 1998, the Company issued a total of 37,694 shares of common stock in
recognition of consulting services rendered during the year. The stock's fair
value and related compensation expense (ranging from $3.00 to $9.00) per share
was estimated based on prices of similar quantities of stock sold to unrelated
parties during the period.

In March 1999 the Company issued 500,000 shares of common stock in exchange
for an exclusive license agreement. The stock was valued at $9,000,000 ($18.00
per share) by the Company based on recent sales at $18.00 per share. The total
of $9,000,000 was expensed as research and development in 1999.

In October 1999, the Company issued 101,251 shares of common stock to
purchase all of the outstanding stock of SynQuest, Inc.

The Company issued options to consultants for services during 1999 and
1998. A total of 38,330 options to purchase common shares, with exercise prices
of $16.75 to $30.12, were granted in 1999. A total of 6,333 options to purchase
common shares with exercise prices of $15.00 to $18.00, were granted in 1998.

EMPLOYEE OPTIONS

The Company's Board of Directors adopted an equity incentive plan (the
Plan) effective November 12, 1997. On April 5, 1999 and April 8, 1999, the
Company's Board of Directors and stockholders approved an amendment and
restatement of the Plan to increase the total number of shares of common stock
that may be issued pursuant to the Plan to 14,939,517 shares, including
7,939,517 shares reserved for issuance to the CEO under her employment agreement
(see note 5). The Plan provides for the grant of awards, including options,
stock appreciation rights, restricted stock awards and other rights as defined
in the Plan, to eligible participants. Options granted under the Plan are not
transferable and must generally be exercised within 10 years. The price of all
options granted under the Plan must be at least equal to the fair market value
of the common stock on the date of grant. With respect to any participant who
owns 10 percent or more of the Company's outstanding common stock on the date of
grant, the exercise price of any incentive stock option granted to that
participant must equal or exceed 110 percent of the fair market value of the
common stock on the date of grant and the option must not be exercisable for
longer than five years. During the year ended December 31, 1997, options to
purchase a total of 274,000 shares were granted under this Plan at exercise
prices of $3.00 to $16.50. During the year ended December 31, 1998, options to
purchase a total of 610,401 shares were granted under this Plan at exercise
prices of $3.00 to $19.80. During the year ended December 31, 1999, options to
purchase a total of 442,907 shares were granted under this Plan at exercise
prices of $12.38 to $35.75.

An additional 126,666 options have been granted to employees outside of the
Plan that have terms between five and ten years.

The Company applies APB Opinion No. 25 in accounting for options granted to
employees and, accordingly, no compensation expense has been recognized in the
financial statements with respect to such options. Had the Company determined
compensation expense under SFAS No. 123 based on the fair value at

F-16
<PAGE> 70
UNITED THERAPEUTICS CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

the grant date for its stock options, the Company's net loss would have been
increased to the pro forma amounts indicated below:

<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
-----------------------------------------
1999 1998 1997
------------ ------------ -----------
<S> <C> <C> <C>
Net loss:
As reported................................. $(33,506,698) $(12,835,399) $(2,901,224)
Pro forma................................... $(34,819,629) $(12,989,645) $(2,905,862)
Basic and diluted loss per common share:
As reported................................. $ (2.51) $ (1.54) $ (0.87)
Pro forma................................... $ (2.60) $ (1.56) $ (0.87)
</TABLE>

The fair value of each option is estimated on the date of grant using the
Black-Scholes option pricing model with the following weighted-average
assumptions generally used for grants in 1999, 1998, and 1997 were:

<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
-------------------------------------------------------------------
1999 1998 1997
------------------------- ------------------ ------------------
<S> <C> <C> <C>
Dividend yield........... 0 percent 0 percent 0 percent
Expected volatility...... 0.10 percent to 76 0.10 percent 0.10 percent
percent
Risk free interest
rate................... 6.0 to 6.55 percent 4.4 to 5.7 percent 4.4 to 5.7 percent
Expected lives........... 7.5 years 7.5 years 7.5 years
</TABLE>

A summary of the status of the Company's employee stock options as of
December 31, 1999, 1998, and 1997, and changes during the years then ended is
presented below:

<TABLE>
<CAPTION>
1999 1998 1997
-------------------- -------------------- --------------------
WEIGHTED- WEIGHTED- WEIGHTED-
AVERAGE AVERAGE AVERAGE
EXERCISE EXERCISE EXERCISE
SHARES PRICE SHARES PRICE SHARES PRICE
-------- --------- -------- --------- -------- ---------
<S> <C> <C> <C> <C> <C> <C>
Outstanding at beginning of
period.................... 878,485 $12.69 274,000 $13.77 -- $ --
Granted..................... 569,573 22.81 610,401 12.12 274,000 13.77
Exercised................... -- -- -- -- -- --
Forfeited................... (35,334) 8.66 (5,916) 3.00 --_ --
-------- ------ -------- ------ -------- ------
Outstanding at end of
period.................... 1,412,724 $16.87 878,485 $12.69 274,000 $13.77
======== ====== ======== ====== ======== ======
Options exercisable at end
of period................. 449,145 $11.90 180,318 $ 8.28 21,250 $ 7.80
======== ====== ======== ====== ======== ======
Weighted-average fair value
of options granted during
the period................ $ 16.69 $ 3.30 $ 0.06
======== ======== ========
</TABLE>

F-17
<PAGE> 71
UNITED THERAPEUTICS CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

The following table summarizes information about employee stock options
outstanding at December 31, 1999:

<TABLE>
<CAPTION>
OPTIONS OUTSTANDING OPTIONS EXERCISABLE
---------------------------------------- -------------------
WEIGHTED- WEIGHTED- WEIGHTED-
AVERAGE AVERAGE AVERAGE
EXERCISE REMAINING EXERCISE EXERCISE
PRICES NUMBER CONTRACTUAL LIFE PRICE NUMBER PRICE
- ------------- --------- ---------------- --------- ------- ---------
<S> <C> <C> <C> <C> <C>
$ 3.00 139,811 4.64 $ 3.00 82,902 $ 3.00
9.00 202,663 4.44 9.00 150,332 9.00
12.38 8,000 9.50 12.38 -- --
13.38 25,000 9.50 13.38 10,000 13.38
15.00 150,664 8.00 15.00 60,502 15.00
16.50 66,666 3.00 16.50 26,667 16.50
16.75 201,825 9.50 16.75 30,836 18.00
18.00 217,162 9.01 18.00 53,572 18.00
19.80 83,333 8.90 19.80 20,834 19.80
23.50 10,000 10.00 23.50 2,500 23.50
27.50 202,600 9.79 27.50 10,000 27.50
28.75 100,000 5.00 28.75 -- --
35.75 5,000 9.90 35.75 1,000 35.75
- ------------- --------- ----- ------ ------- ------
$3.00 - 35.75 1,412,724 7.44 $16.87 449,145 $11.90
============= ========= ===== ====== ======= ======
</TABLE>

7. INCOME TAXES

A reconciliation of tax benefit computed at the statutory federal tax rate
on losses from operations before income taxes to the actual income tax expense
is as follows:

<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
----------------------------------------
1999 1998 1997
------------ ----------- -----------
<S> <C> <C> <C>
Federal tax provision (benefit) computed at the
statutory rate............................... $(11,391,103) $(4,362,981) $(1,015,428)
State tax provision (benefit), net of federal
tax provision (benefit)...................... (2,680,260) (842,180) (113,936)
Change in the beginning of the period valuation
allowance for deferred tax assets allocated
to tax expenses.............................. 16,548,175 7,564,698 1,127,859
General business credit generated.............. (7,811,718) (3,005,476) --
Nondeductible expenses and other............... 5,338,360 649,039 1,505
------------ ----------- -----------
Total income tax expense.................. $ 3,454 $ 3,100 $ --
============ =========== ===========
</TABLE>

Deferred income taxes reflect the net effect of net operating loss
carryforwards and the temporary differences between the carrying amounts of
assets and liabilities for financial reporting purposes and the

F-18
<PAGE> 72
UNITED THERAPEUTICS CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

amounts used for income tax purposes. Significant components of the Company's
deferred tax assets as of December 31, 1999 and 1998, respectively, are as
follows:

<TABLE>
<CAPTION>
DECEMBER 31,
---------------------------
1999 1998
------------ -----------
(UNAUDITED)
<S> <C> <C>
Deferred tax assets:
Net operating loss carryforwards....................... $ 12,325,956 $ 4,245,686
General business credit................................ 11,258,448 3,640,146
Cumulative effect of using cash basis accounting for
income tax purposes................................. 1,503,180 690,302
Furniture and equipment principally due to differences
in depreciation..................................... (46,666) (19,164)
Nonqualified stock options............................. 210,837 146,610
------------ -----------
Total deferred tax assets........................... 25,251,755 8,703,580
Valuation allowance...................................... (25,251,755) (8,703,580)
------------ -----------
Net deferred tax assets............................. $ -- $ --
============ ===========
</TABLE>

Based on the weight of available evidence, management has determined that
the deferred tax asset amount may not be realized. This is due primarily to the
uncertainty of product approvals, future product sales and profitability. The
valuation allowance for deferred tax assets increased $16,548,175 and $7,564,698
for the years ended December 31, 1999 and 1998, respectively.

At December 31, 1999, the Company had net operating loss carryforwards of
approximately $33.6 million and business tax credit carryforwards of
approximately $11.5 million for federal income tax purposes which expire at
various dates from 2011 through 2019. Business tax credits can offset future tax
liabilities and arise from qualified research expenditures. United Therapeutics'
ability to utilize its net operating loss and general business tax credit
carryforwards may be limited in the future if it is determined that United
Therapeutics experienced an ownership change, as defined in Section 382 of the
Internal Revenue Code, as a result of prior transactions and/or future
transactions. However, these net operating loss and general business tax credit
carryforwards, if subject to limitation arising from an earlier Section 382
ownership change, would be fully available to offset taxable income and taxes,
as applicable, during their carryforward lives.

8. NOTES AND LEASES PAYABLE

On April 29, 1998, the Company purchased an office building from a company
owned by the Chairman and CEO of the Company for approximately $581,000. At that
time, the Company assumed an existing adjustable rate mortgage on the building
of approximately $318,000. In June 1999, the Company refinanced the note
payable. The outstanding principal totaled approximately $315,000 and was paid
in full from the proceeds of a new mortgage note payable. The new mortgage note
payable was issued for $720,000 and is payable in monthly installments. This
30-year adjustable rate note had an interest rate of 6.25 percent in effect at
December 31, 1999 and is secured by the building and property owned by the
Company located at 1110 Spring Street in Silver Spring, Maryland.

In September 1999, the Company purchased a building adjacent to 1110 Spring
Street in Silver Spring, Maryland. The total cost of the building was
approximately $1,544,000. The Company issued a mortgage note payable to finance
this purchase. The mortgage note payable was issued for $1,078,000 and is
payable in monthly installments. This 30-year adjustable rate note had an
interest rate of 5.75 percent in effect at December 31, 1999 and is secured by a
certificate of deposit in the amount of $512,000 and the building and property
owned by the Company located at 1106 Spring Street in Silver Spring, Maryland.
The Company also

F-19
<PAGE> 73
UNITED THERAPEUTICS CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

leased certain equipment under capital leases with interest rates of
approximately 6.5 percent and terms up to 4 years.

Future minimum payments under notes and leases payable are as follows:

<TABLE>
<CAPTION>
NOTES CAPITAL
PAYABLE LEASES
---------- -------
<S> <C> <C>
YEAR ENDING DECEMBER 31,
2000........................................... $ 22,644 $36,560
2001........................................... 24,043 8,377
2002........................................... 25,512 4,962
2003........................................... 27,069 2,067
2004........................................... 28,722 --
2005 and thereafter............................ 1,664,286 --
---------- -------
1,792,276 51,966
Less amount representing interest.............. -- (3,751)
---------- -------
Less current portion........................... (22,644) (34,142)
---------- -------
$1,769,632 $14,073
========== =======
</TABLE>

9. INVESTMENTS

Investments at December 31, 1998 consisted of a single debt security issued
by the Federal Home Loan Mortgage Corporation. Investments at December 31, 1999
consist of a diversified portfolio of corporate and federally sponsored debt
securities maturing in 2000. Investments at December 31, 1999 and 1998 are
summarized as follows:

<TABLE>
<CAPTION>
DECEMBER 31,
-------------------------
1999 1998
----------- -----------
<S> <C> <C>
Fair value................................. $33,326,436 $10,025,887
Amortized cost............................. $33,315,914 $10,023,190
Gross unrealized holding gains............. $ 527,284 $ 25,810
</TABLE>

10. OPERATING LEASES

The Company leases office space for use in its research and development
activities in North Carolina. The initial leases commenced in 1997 and had
initial terms of six months. The leases are renewable semi-annually and were
renewed in 1998 and 1999.

In March 1999, a subsidiary of the Company leased office space from a
company owned by the Chairman and CEO of the Company (see note 3). The lease
expires in 2001 and may be extended for two years. The subsidiary is responsible
for base rentals and its proportionate share of common utilities and
maintenance. Also in March 1999, the Company leased an automobile for its CEO.

In September 1999, the Company purchased a building and property located at
1106 Spring Street in Silver Spring, Maryland. The building was fully leased to
tenants at the time of the purchase. These leases are expected to continue in
operation until their expiration, which will be at various dates through 2002.
Additionally, a subsidiary of the Company subleased a portion of its office
space to Quantum Medical Corporation (see note 11).

F-20
<PAGE> 74
UNITED THERAPEUTICS CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

Approximate minimum annual rent payments to be paid and received under
these noncancelable leases are as follows:

<TABLE>
<CAPTION>
RENTS TO RENTS TO
BE PAID BE RECEIVED
-------- -----------
<S> <C> <C>
YEAR ENDING DECEMBER 31,
2000........................................... $205,627 $184,316
2001........................................... 142,011 129,705
2002........................................... 39,521 30,707
2003........................................... 12,046 7,605
2004........................................... 3,046 --
</TABLE>

Total rent expense for the years ended December 31, 1999, 1998, and 1997
was $206,943, $97,033, and $25,340, respectively.

11. ACQUISITIONS

WONDERCLICK.COM, INC.

In July 1999, a subsidiary of Unither Telemedicine Services Corporation
(UTSC) entered into an agreement to form WonderClick.com, Inc. (formerly
AboveCable.com, Inc.), a Delaware corporation, to provide Internet access via
cable television portals worldwide. This subsidiary received 20 percent of the
initial outstanding common stock of WonderClick.com, Inc. and the exclusive
rights to offer telemedicine and electronic health services at the portal level.
The agreement does not require the UTSC subsidiary to contribute cash or other
capital. WorldSpace Corporation purchased a 50 percent common stock shareholding
in the new company. The Chairman and CEO of WorldSpace is a major stockholder
and Board member of the Company. At December 31, 1999, UTSC's subsidiary's 20
percent investment in WonderClick.com, Inc. had an original cost of zero and was
reported at zero. The subsidiary's equity in the underlying net assets was
approximately $349,000.

QUANTUM MEDICAL CORPORATION

In August 1999, Unither Telemedicine Services Corporation (UTSC) entered
into an agreement to form Quantum Medical Corporation, a Delaware corporation,
to develop and commercialize millimeter wave wound healing technology. UTSC
received approximately 35 percent of the initial outstanding common stock of
Quantum Medical Corporation. The Company has agreed to provide the services of
its Chief Executive Officer as Co-Chairman of the new company. The agreement
does not require UTSC to contribute cash or other capital. From the date of the
agreement until September 30, 1999, UTSC provided office space and
administrative services pursuant to a lease with Quantum Medical Corporation for
$3,000 per month, which terminated on November 1, 1999. At December 31, 1999,
UTSC's 35 percent investment in Quantum Medical Corporation had an original cost
of zero and was reported at zero. UTSC's equity in the underlying net assets was
approximately $158,000.

SYNQUEST, INC.

On October 7, 1999, the Company acquired all the outstanding stock of
SynQuest, Inc. (SynQuest), an Illinois corporation engaged in the synthesis and
manufacture of complex molecules. SynQuest manufactures UT-15, the Company's
lead compound. The total cost of this acquisition was approximately $3.2
million, including transaction costs. Cash of $200,000 and the Company's common
stock valued at $2.9 million was paid to the sellers as consideration. A
holdback equivalent to $500,000 of the Company's common stock,

F-21
<PAGE> 75
UNITED THERAPEUTICS CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

which will be reduced to $200,000 of the Company's common stock on October 7,
2000, is being held in escrow for unknown liabilities and will be paid to the
sellers over four years, subject to certain conditions.

Goodwill and other intangible assets resulting from the acquisition were
approximately $2.8 million and are being amortized in a straight-line manner
over periods ranging up to five years. The acquisition was accounted for as a
purchase. SynQuest's operations since October 7, 1999 have been included in the
Company's consolidated financial statements.

The following pro forma financial information presents the combined results
of operations of the Company and SynQuest as if the acquisition had occurred as
of the beginning of 1998 and 1999, after giving effect to certain adjustments,
including amortization of goodwill and intercompany sales. The pro forma
financial information does not necessarily reflect the results of operations
that would have occurred had the Company acquired SynQuest at the beginning of
these periods.

<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
---------------------------
1999 1998
------------ ------------
<S> <C> <C>
Total revenues........................... $ 1,717,000 $ 1,120,000
Net loss................................. $(34,125,000) $(13,598,000)
Loss per share -- basic and diluted...... $ (2.55) $ (1.61)
</TABLE>

12. EMPLOYEES' RETIREMENT PLAN

Effective January 1, 1999, the Company adopted the United Therapeutics
Corporation Employees' Retirement Plan (the Plan), a salary reduction profit
sharing plan. Employees employed on July 15, 1999 are eligible to participate in
the Plan. The Plan provides for annual discretionary employer contributions.
Employees may also contribute to the Plan at their discretion. For the year
ended December 31, 1999, no employer contributions were made to the Plan.

13. ACCRUED EXPENSES

Accrued expenses consisted of the following at December 31, 1999 and 1998:

<TABLE>
<CAPTION>
DECEMBER 31,
--------------------
1999 1998
---------- -------
<S> <C> <C>
Professional fees.............................. $ 123,396 $14,161
Research....................................... 1,851,437 --
Other.......................................... 132,972 --
---------- -------
$2,107,805 $14,161
---------- -------
</TABLE>

14. SUBSEQUENT EVENTS

SALE OF COMMON STOCK

In December 1999, the Company agreed to the sale of 2,500,000 shares of
common stock at $32.00 per share in a private placement. The private placement
closed and settled in January 2000. Net proceeds, after deducting commissions
and offering expenses were approximately $75.0 million. The common stock was
registered for resale with the SEC in a filing that was declared effective on
January 18, 2000.

F-22
<PAGE> 76
UNITED THERAPEUTICS CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

UNITED THERAPEUTICS EUROPE, LTD.

In February 2000, the Company established United Therapeutics Europe, Ltd.,
a wholly owned subsidiary in the United Kingdom, to facilitate activities in
Europe. The new subsidiary has not yet commenced operations.

STOCK GRANT TO COLUMBIA UNIVERSITY

In February 2000, the Company agreed to fund a United Therapeutics Chair in
Pulmonary Hypertension at Columbia University with a grant of the Company's
common stock valued at $1.5 million. The first half of this grant was funded
with the issuance of 9,868 shares of the Company's common stock valued at
$750,000 based on the closing Nasdaq price on February 10, 2000. The second half
of this grant will be funded on February 10, 2001 with a number of shares of the
Company's common stock that are then equivalent to $750,000.

EXCLUSIVE LICENSE AGREEMENT

In March 2000, Unither Pharmaceuticals, Inc. a wholly owned subsidiary of
United Therapeutics, entered into a license agreement with Synergy
Pharmaceuticals, Inc. to obtain from Synergy the exclusive worldwide rights to
certain patents relating to anti-viral compounds. Unither will pay Synergy, at
closing, a $100,000 license fee. In addition, the agreement conditionally
requires Unither to pay Synergy milestone payments of up to $22.2 million for
each FDA-approved product plus royalties ranging from 6 percent to 12.25
percent, subject to reductions, based on net sales. As part of the transaction,
Unither has agreed to acquire 15 percent of the outstanding stock of Synergy for
a total of $5 million, payable as $3 million in cash and $2 million in shares of
common stock of United Therapeutics, all payable at closing. Unither will
acquire an exclusive option to purchase the remaining stock of Synergy. The
closing is expected to occur by March 31, 2000, after obtaining the consents of
current Synergy shareholders.

F-23
<PAGE> 77

------------------------------------------------------
------------------------------------------------------

YOU MAY RELY ONLY ON THE INFORMATION CONTAINED IN THIS PROSPECTUS. WE HAVE NOT
AUTHORIZED ANYONE TO PROVIDE INFORMATION DIFFERENT FROM THAT CONTAINED IN THIS
PROSPECTUS. NEITHER THE DELIVERY OF THIS PROSPECTUS NOR SALE OF COMMON STOCK
MEANS THAT INFORMATION CONTAINED IN THIS PROSPECTUS IS CORRECT AFTER THE DATE OF
THIS PROSPECTUS. THIS PROSPECTUS IS NOT AN OFFER TO SELL OR SOLICITATION OF AN
OFFER TO BUY THESE SHARES OF COMMON STOCK IN ANY CIRCUMSTANCES UNDER WHICH THE
OFFER OR SOLICITATION IS UNLAWFUL.

------------------------

TABLE OF CONTENTS

<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Prospectus Summary.................. 1
Risk Factors........................ 4
Use of Proceeds..................... 11
Market Price of Common Stock........ 11
Capitalization...................... 11
Selected Consolidated Financial
Data.............................. 12
Management's Discussion and Analysis
of Financial Condition and Results
of Operations..................... 13
Business............................ 17
Management.......................... 35
Certain Transactions................ 44
Principal Stockholders.............. 45
Selling Stockholders................ 46
Plan of Distribution................ 47
Description of Capital Stock........ 48
Lawyers............................. 50
Experts............................. 50
Additional Information.............. 50
Index to Consolidated Financial
Statements........................ F-1
</TABLE>

------------------------

------------------------------------------------------
------------------------------------------------------
------------------------------------------------------
------------------------------------------------------

[UNITED THERAPEUTICS LOGO]

2,500,000 SHARES

COMMON STOCK

------------------------
PROSPECTUS
------------------------
MARCH , 2000

------------------------------------------------------
------------------------------------------------------
<PAGE> 78

PART II
INFORMATION NOT REQUIRED IN PROSPECTUS

ITEM 13. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION

The following table sets forth all expenses payable by the Registrant in
connection with the registration of the common stock.

<TABLE>
<S> <C>
Registration fee............................................ $ 23,925
Nasdaq National Market listing fee.......................... 17,500
Printing and engraving expenses............................. 10,000*
Legal fees and expenses..................................... 250,000*
Accounting fees and expenses................................ 75,000*
Miscellaneous............................................... 74,375*
--------
Total............................................. $450,800*
========
</TABLE>

--------------------
* Estimated

ITEM 14. INDEMNIFICATION OF DIRECTORS AND OFFICERS.

As permitted by Delaware law, the Registrant's Amended and Restated
Certificate of Incorporation provides that no director of the Registrant will be
personally liable to the Registrant or its stockholders for monetary damages for
breach of fiduciary duty as a director, except for liability (a) for any breach
of duty of loyalty to United Therapeutics or to its stockholders, (b) for acts
or omissions not in good faith or that involve intentional misconduct or a
knowing violation of law, (c) under Section 174 of the Delaware General
Corporation Law, or (d) for any transaction from which the director derived an
improper personal benefit.

The Registrant's Amended and Restated Certificate of Incorporation further
provides that the Registrant must indemnify its directors and executive officers
and may indemnify its other officers and employees and agents to the fullest
extent permitted by Delaware law. The Registrant believes that indemnification
under its Amended and Restated Certificate of Incorporation covers negligence
and gross negligence on the part of indemnified parties.

The Registrant has entered into indemnification agreements with each of its
directors and officers. These agreements, among other things, require the
Registrant to indemnify such directors and officers for certain expenses
(including attorneys' fees), judgments, fines and settlement amounts incurred by
any such person in any action or proceeding, including any action by or in the
right of the Registrant, arising out of such person's services as a director or
officer of the Registrant, any subsidiary of the Registrant or any other company
or enterprise to which the person provides services at the request of the
Registrant.

ITEM 15. RECENT SALES OF UNREGISTERED SECURITIES.

Since June 1996, the Registrant has sold and issued the following
unregistered securities:

(1) As of December 31, 1999, the Registrant had granted stock options
to purchase 1,398,637 shares of its common stock to employees, consultants
and directors pursuant to its Amended and Restated Equity Incentive Plan.
Of these options to purchase, no shares have been exercised, 41,250 have
been forfeited, and the remainder are outstanding.

(2) As of December 31, 1999, the Registrant had granted stock options
to purchase an additional 100,000 shares of its common stock to employees,
consultants and directors, all of which are outstanding.

(3) In August 1996, the Registrant issued an aggregate of 1,666,663
shares of its common stock to its four co-founders for an aggregate
consideration of $100,000.

(4) From January 1, 1997 through December 31, 1997, the Registrant
issued 3,906,742 shares of common stock for an aggregate consideration of
$6,940,150.

II-1
<PAGE> 79

(5) In July 1997, the Registrant issued 309,428 shares of its common
stock to Martine A. Rothblatt, in consideration for the conversion of a
note, including accrued interest thereon, for an aggregate consideration of
$508,334.

(6) From January 1, 1998 through December 31, 1998, the Registrant
issued 37,194 shares of its common stock in consideration for various
consulting services valued at approximately $132,085.

(7) From January 1, 1998 through December 31, 1998, the Registrant
issued an aggregate of 3,473,349 shares of its common stock to directors
and officers and several accredited investors (not including those
reflected in item (6)) for an aggregate cash consideration of $17,904,530.

(8) In September 1998, the Registrant issued 166,666 shares of its
common stock, and granted options to acquire an additional 166,666 shares
of common stock in consideration of an exclusive license.

(9) In October 1998, the Registrant issued an aggregate of 555,555
shares of common stock to two accredited investors for an aggregate
consideration of $5,000,001.

(10) In November 1998, the Registrant issued warrants to purchase
116,666 shares of common stock in consideration of an exclusive license
agreement.

(11) In March 1999, the Registrant issued 500,000 shares of its common
stock in consideration of an exclusive license agreement.

(12) In March 1999, the Registrant issued options to purchase 2,808
shares of its common stock in exchange for services.

(13) From January 1999 to February 1999, the Registrant sold and
issued an aggregate of 111,370 shares of its common stock to directors,
employees and several accredited investors for an aggregate cash
consideration of $1,990,365.

(14) In October 1999, the Registrant issued an aggregate of 101,251
shares of its common stock to the stockholders of SynQuest, Inc. in
connection with the acquisition of SynQuest.

(15) On December 22, 1999, the Registrant entered into an agreement to
issue and on January 18, 2000 did sell and issue an aggregate of 2,500,000
shares of common stock to fifteen accredited investors.

(16) In March 2000, the Registrant entered into an agreement to issue
an aggregate of 21,978 shares of its common stock to Synergy
Pharmaceuticals, Inc. in partial payment of the purchase price for 15
percent of Synergy's common stock and an option to acquire the remaining
outstanding shares of Synergy.

The sales and issuances of certain of the securities described in paragraph
(1) above were deemed to be exempt from registration under the Securities Act by
virtue of Rule 701 of the Securities Act in that they were offered and sold
either pursuant to a written compensatory benefit plan or pursuant to a written
contract relating to compensation, as provided by Rule 701. The balance of sales
and issuances described in paragraph (1) and the sales and issuances of
securities described in paragraphs (2)-(16) above were deemed to be exempt from
registration under the Securities Act by virtue of Section 4(2), Regulation D or
Regulation S promulgated thereunder.

Appropriate legends were affixed to the stock certificates issued in the
aforementioned transactions. All purchasers/recipients either received adequate
information about the Registrant or had access, through employment or other
relationships, to such information.

II-2
<PAGE> 80

ITEM 16. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES.

(a) The following is a list of exhibits filed as a part of this
registration statement.

<TABLE>
<CAPTION>
EXHIBIT NO. DESCRIPTION
- ----------- -----------
<S> <C>
3.1 Amended and Restated Certificate of Incorporation of the
Registration, incorporated by reference to Exhibit 3.1 of
the Registrant's Registration Statement on Form S-1
(Registration No. 333-76409).
3.2 Amended and Restated Bylaws of the Registrant, incorporated
by reference to Exhibit 3.2 of the Registrant's Registration
Statement (Registration No. 333-76409).
4.1 Reference is made to Exhibits 3.1 and 3.2.
4.2 Registration Rights Agreement, dated as of October 30, 1998,
by and among the Registrant, Merrill Lynch KECALP L.P. 1997,
and Merrill Lynch KECALP International L.P. 1997,
incorporated by reference to Exhibit 4.2 of the Registrant's
Registration Statement on Form S-1 (Registration No.
333-76409).
4.3 Form of Common Stock Purchase Agreement, executed as of
March 1998, by and between the Registrant and each of
Community Investment Partners III L.P., LLLP, Mary Ellen and
Raul Evelio Perez, Trustees of the Mary Ellen Perez
revocable trust dated October 28, 1993, Edward D. Jones &
Co., Oakwood Investors I, L.L.C. and James L. Nouss, Jr.,
incorporated by reference to Exhibit 4.3 of the Registrant's
Registration Statement on form S-1 (Registration No.
333-76409).
4.4 Warrant to purchase shares of United Therapeutics common
stock, issued on November 2, 1998 to Cortech, Inc.,
incorporated by reference to Exhibit 4.4 of the Registrant's
Registration Statement on form S-1 (Registration No.
333-76409).
4.5 Stock Option Grant to purchase shares of United
Therapeutics' common stock, issued on September 16, 1998, to
Toray Industries, Inc., incorporated by reference to Exhibit
4.5 of the Registrant's Registration Statement on Form S-1
(Registration No. 333-76409).
4.6 Registration Rights Agreement, dated as of October 7, 1999,
by and among the Registrant and Robert M. Moriarty, Ph.D.,
Raju Penmasta, Ph.D., Lian Guo, Ph.D., George W. Davis, Esq.
and David Moriarty, incorporated by reference to Exhibit
10.2 of the Registrant's Form 10-Q for the period ended
September 30, 1999.
4.7 Form of Purchase Agreement dated as of December 22, 1999.**
5 Opinion of Bryan Cave LLP.**
10.1 Amended and Restated Equity Incentive Plan, incorporated by
reference to Exhibit 10.1 of the Registrant's Registration
Statement on Form S-1 (Registration No. 333-76409).
10.2 Form of Scientific Advisor Compensation Agreement,
incorporated by reference to Exhibit 10.2 of the
Registrant's Registration Statement on Form S-1
(Registration No. 333-76409).
10.3 Executive Employment Agreement (as amended) dated as of
April 2, 1999, between the Registrant and Martine A.
Rothblatt, incorporated by reference to Exhibit 10.3 of the
Registrant's Registration Statement on Form S-1
(Registration No. 333-76409).
10.4 Employment Agreement dated July 15, 1996, between the
Registrant and James W. Crow, incorporated by reference to
Exhibit 10.4 of the Registrant's Registration Statement on
Form S-1 (Registration No. 333-76409).
10.5 Employment Agreement dated April 7, 1996, between the
Registrant and Gilles Cloutier, incorporated by reference to
Exhibit 10.5 of the Registrant's Registration Statement on
Form S-1 (Registration No. 333-76409).
10.6 Employment Agreement dated August 1, 1996, between the
Registrant and Shelmer Blackburn, Jr., incorporated by
reference to Exhibit 10.6 of the Registrant's Registration
Statement on Form S-1 (Registration No. 333-76409).
10.7 First Flight Venture Lease Agreement dated July 1, 1997,
between North Carolina Technological Development Authority,
Inc. and the Registrant, incorporated by reference to
Exhibit 10.2 of the Registrant's Registration Statement on
Form S-1 (Registration No. 333-76409).
10.8 Exclusive License Agreement dated as of December 3, 1996,
between the Registrant and affiliate of Pharmacia & Upjohn
Company, incorporated by reference to Exhibit 10.8 of the
Registrant's Registration Statement on Form S-1
(Registration No. 333-76409).*
</TABLE>

II-3
<PAGE> 81

<TABLE>
<CAPTION>
EXHIBIT NO. DESCRIPTION
- ----------- -----------
<S> <C>
10.9 Assignment Agreement dated as of January 31, 1997, between
the Registrant and affiliates of Glaxo Wellcome Inc.,
incorporated by reference to Exhibit 10.9 of the
Registrant's Registration Statement on Form S-1
(Registration No. 333-76409).*
10.10 Cooperation and Strategic Alliance Agreement dated as of
September 3, 1997, between Registrant and MiniMed Inc.,
incorporated by reference to Exhibit 10.10 of the
Registrant's Registration Statement on Form S-1
(Registration No. 333-76409).*
10.11 Exclusive License Agreement dated as of September 24, 1998,
between the Registrant and Toray Industries, Inc.,
incorporated by reference to Exhibit 10.11 of the
Registrant's Registration Statement on Form S-1
(Registration No. 333-76409).*
10.12 Exclusive License Agreement dated as of November 4, 1998,
between the Registrant and Cortech, Inc., incorporated by
reference to Exhibit 10.12 of the Registrant's Registration
Statement on Form S-1 (Registration No. 333-76409).*
10.13 Exclusive License and Distribution Agreement dated as of
February 4, 1999, among the Registrant, Global Medical
Enterprises Ltd. and Global Medical Enterprises Ltd., LLC.,
incorporated by reference to Exhibit 10.13 of the
Registrant's Registration Statement on Form S-1
(Registration No. 333-76409).*
10.14 Exclusive License Agreement dated as of March 15, 1999,
between the Registrant and Toray Industries, Inc.,
incorporated by reference to Exhibit 10.14 of the
Registrant's Registration Statement on Form S-1
(Registration No. 333-76409).*
10.15 Manufacturing Agreement dated as of February 11, 1998,
between the Registrant and Steroids, Ltd., incorporated by
reference to Exhibit 10.15 of the Registrant's Registration
Statement on Form S-1 (Registration No. 333-76409).*
10.16 Agreement and Plan of Merger dated as of October 7, 1999,
among the Registrant, SQ Acquisition, Inc., Robert M.
Moriarty, Ph.D., Raju Penmasta, Ph.D., Laing Guo, Ph.D.,
George W. Davis, Esq., David Moriarty and SynQuest, Inc.,
incorporated by reference to Exhibit 10.1 of the
Registrant's Quarterly Report on Form 10-Q for the period
ended September 30, 1999.
10.17 Lease dated as of March 1, 1999, between the Unither
Telemedicine Services Corp. and Beacon Projects, Inc.,
incorporated by reference to Exhibit 10.17 of the
Registrant's Registration Statement on Form S-1
(Registration No. 333-76409).
10.18 UAI Technology, Inc. Office Lease dated as of July 1, 1998,
between the Registrant and UAI Technology, Inc.,
incorporated by reference to Exhibit 10.18 of the
Registrant's Registration Statement on Form S-1
(Registration No. 333-76409).
10.19 Form of Indemnification Agreement between the Registrant and
each of its Directors, incorporated by reference to Exhibit
10.19 of the Registrant's Registration Statement on Form S-1
(Registration No. 333-76409).
10.20 Guidelines to Govern the Strategic Activities,
Co-Development and Related Activities of the Parties dated
as of November 1, 1999, between the Registrant and MiniMed,
Inc.*/**
10.21 Short Form Commercial and Apartment House Real Estate
Purchase Agreement, accepted as of August 4, 1999, between
the Registrant and 1106 Spring Street Associates,
incorporated by reference to Exhibit 10.21 of the
Registrant's Annual Report on Form 10-K for the year ended
December 31, 1999.
21 Subsidiaries of the Registrant, incorporated by reference to
Exhibit 21 of the Registrant's Annual Report on Form 10-K
for the year ended December 31, 1999.
23.1 Consent of KPMG LLP.
23.2 Consent of Bryan Cave LLP. Reference is made to Exhibit 5.**
24 Power of Attorney (included on signature page).
27 Financial Data Schedule.
</TABLE>

- ---------------
* Confidential treatment has been granted with respect to certain portions of
this exhibit pursuant to Rule 406 of the Securities Act of 1933, as amended.

** Previously filed.

II-4
<PAGE> 82

ITEM 17. UNDERTAKINGS.

The undersigned Registrant hereby undertakes:

(1) To file, during any period in which offers or sales are being
made, a post-effective amendment to this registration statement:

(i) To include any prospectus required by Section 10 (a)(3) of the
Securities Act;

(ii) To reflect in the prospectus any facts or events arising after
the effective date of the registration statement (or the most recent
post-effective amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the information set forth
in the registration statement. Notwithstanding the foregoing, any
increase or decrease in volume of securities offered (if the total
dollar value of securities offered would not exceed that which was
registered) and any deviation from the low or high end of the estimated
maximum offering range may be reflected in the form of prospectus filed
with the Commission pursuant to Rule 424(b) if, in the aggregate, the
changes in volume and price represent no more than a 20 percent change
in the maximum aggregate offering price set forth in the "Calculation of
Registration Fee" table in the effective registration statement;

(iii) To include any material information with respect to the plan
of distribution not previously disclosed in this Registration Statement
or any material change to such information in this Registration
Statement.

(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be deemed
to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed
to be the initial bona fide offering thereof.

(3) To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the
termination of the offering.

Insofar as indemnification for liabilities arising under the Securities Act
may be permitted to directors, officers, and controlling persons of the
Registrant pursuant to the provisions described in Item 14 or otherwise, the
Registrant has been advised that in the opinion of the Securities and Exchange
Commission, such indemnification is against public policy as expressed in the
Securities Act and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the
Registrant of expenses incurred or paid by a director, officer, or controlling
person of the Registrant in the successful defense of any action, suit, or
proceeding) is asserted by such director, officer, or controlling person in
connection with the securities being registered, the Registrant will, unless in
the opinion of its counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in the Securities
Act and will governed by the final adjudication of such issue.

The undersigned Registrant undertakes that: (1) for purposes of determining
any liability under the Securities Act, the information omitted from the form of
prospectus filed as part of the registration statement in reliance upon Rule
430A and contained in the form of prospectus filed by the Registrant pursuant to
Rule 424(b)(1) or (4) or 497(h) under the Securities Act shall be deemed to be
part of the registration statement as of the time it was declared effective, and
(2) for the purpose of determining any liability under the Securities Act, each
post-effective amendment that contains a form of prospectus shall be deemed to
be a new registration statement relating to the securities offered therein, and
the offering of such securities at that time shall be deemed to be the initial
bona fide offering thereof.

II-5
<PAGE> 83

SIGNATURES

In accordance with the requirements of the Securities Act of 1933, the
Registrant has duly caused this Registration Statement on Form S-1 to be signed
on its behalf by the undersigned, in the City of Silver Spring, County of
Montgomery, State of Maryland on the 29th day of March, 2000.

UNITED THERAPEUTICS CORPORATION

By: /s/ MARTINE A. ROTHBLATT
------------------------------------
Martine A. Rothblatt
Chairman of the Board and Chief
Executive Officer

In accordance with the requirements of the Securities Act of 1933, this
registration statement was signed below by the following persons in the
capacities and on the dates stated.

<TABLE>
<CAPTION>
SIGNATURES TITLE DATE
---------- ----- ----
<C> <S> <C>

/s/ MARTINE A. ROTHBLATT* Chairman of the Board and March 29, 2000
- ----------------------------------------------------- Chief Executive Officer
Martine A Rothblatt

/s/ MARTINE A. ROTHBLATT* President, Chief Operating March 29, 2000
- ----------------------------------------------------- Officer and Director
James W. Crow

/s/ MARTINE A. ROTHBLATT* Executive Vice President, March 29, 2000
- ----------------------------------------------------- Treasurer and Director
Gilles Cloutier

/s/ MARTINE A. ROTHBLATT* Vice President of Operations, March 29, 2000
- ----------------------------------------------------- Secretary and Director
Shelmer D. Blackburn, Jr.

/s/ FRED T. HADEED Chief Financial Officer March 29, 2000
- -----------------------------------------------------
Fred T. Hadeed

/s/ MARTINE A. ROTHBLATT* Director March 29, 2000
- -----------------------------------------------------
Jean-Guy Lambert

/s/ MARTINE A. ROTHBLATT* Director March 29, 2000
- -----------------------------------------------------
Noah A. Samara

/s/ MARTINE A. ROTHBLATT* Director March 29, 2000
- -----------------------------------------------------
David Gooray

/s/ MARTINE A. ROTHBLATT* Director March 29, 2000
- -----------------------------------------------------
Olivia Giscard d'Estaing
</TABLE>

- ---------------
* By Martine A. Rothblatt pursuant to power of attorney dated December 29, 1999.

II-6
<PAGE> 84

UNITED THERAPEUTICS CORPORATION
EXHIBIT INDEX

<TABLE>
<CAPTION>
EXHIBIT NO. DESCRIPTION
- ----------- -----------
<S> <C>
23.1 Consent of KPMG LLP
27 Financial Data Schedule
</TABLE>

<PAGE> 1
EXHIBIT 23.1

The Board of Directors
United Therapeutics Corporation:

We consent to the use of our reports included herein and to the reference to our
firm under the headings "Selected Financial Data" and "Experts" in the
prospectus.

KPMG LLP

McLean, Virginia
March 29, 2000

<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM AUDITED
CONSOLIDATED FINANCIAL STATEMENTS AS OF AND FOR THE YEAR ENDED DECEMBER 31, 1999
AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<RESTATED>
<MULTIPLIER> 1,000
<CURRENCY> US $

<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-START> JAN-1-1999
<PERIOD-END> DEC-31-1999
<EXCHANGE-RATE> 1
<CASH> 18,280
<SECURITIES> 33,316
<RECEIVABLES> 362
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 52,656
<PP&E> 3,994
<DEPRECIATION> 203
<TOTAL-ASSETS> 59,943
<CURRENT-LIABILITIES> 4,577
<BONDS> 1,844
0
0
<COMMON> 160
<OTHER-SE> 53,406
<TOTAL-LIABILITY-AND-EQUITY> 59,943
<SALES> 225
<TOTAL-REVENUES> 436
<CGS> 164
<TOTAL-COSTS> 35,857
<OTHER-EXPENSES> 1,975
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 58
<INCOME-PRETAX> (33,503)
<INCOME-TAX> 3
<INCOME-CONTINUING> (33,507)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (33,507)
<EPS-BASIC> (2.51)
<EPS-DILUTED> (2.51)

</TABLE>