UNITED THERAPEUTICS CORP, S-1/A, 2000-01-14

UNITED THERAPEUTICS CORP
S-1/A, 2000-01-14
PHARMACEUTICAL PREPARATIONS

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<PAGE> 1

AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON JANUARY 14, 2000
REGISTRATION NO. 333-93853

================================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
--------------

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)
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<S> <C> <C>
DELAWARE 2836 52-1984749
(State or Other Jurisdiction of (Primary Standard Industrial (I.R.S. Employer
Incorporation or Organization) Classification Code Number) Identification Number)
</TABLE>
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.

<PAGE> 2

SUBJECT TO COMPLETION

JANUARY __, 2000

The information in this preliminary prospectus is not complete and may be
changed. The selling stockholders may not sell these securities until the
registration statement filed with the Securities and Exchange Commission is
effective. This prospectus is not an offer to sell these securities and it is
not soliciting an offer to buy these securities in any state where the offer or
sale is not permitted.

[UNITED THERAPEUTICS CORPORATION LOGO]

PROSPECTUS

UNITED THERAPEUTICS CORPORATION

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 December 22, 1999, the closing bid price of
the common stock as reported on the Nasdaq National Market was $36.13 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 January__, 2000.

<PAGE> 3

TABLE OF CONTENTS

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PAGE
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Prospectus Summary...........................................................1
Risk Factors.................................................................4
Use of Proceeds.............................................................12
Market Price of Common Stock................................................12
Capitalization..............................................................12
Selected Consolidated Financial Data........................................13
Management's Discussion and Analysis of
Financial Condition and Results of Operations..........................14
Business....................................................................19
Management..................................................................39
Certain Transactions........................................................47
Principal Stockholders......................................................49
Selling Stockholders........................................................50
Plan of Distribution........................................................52
Description of Capital Stock................................................53
Lawyers.....................................................................55
Experts.....................................................................55
Additional Information......................................................56
Index to Consolidated Financial Statements.................................F-1
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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 and
beraprost, are stable synthetic forms of prostacyclin. UT-15 is delivered under
the skin, or "subcutaneously," and is currently in two multi-center Phase III
clinical trials 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 UT-15 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 UT-15 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 UT-15 in primary pulmonary hypertension patients. Results
from this trial demonstrated that UT-15 can be safely administered to severely
ill patients on an outpatient basis, and also showed that continuous,
subcutaneous dosing of UT-15 leads to improvements in pulmonary blood pressure
and exercise ability. Patients receiving UT-15 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 UT-15 therapy
indefinitely.

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. UT-15
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
UT-15 because this formulation cannot provide the constant therapeutic levels of
prostacyclin in the body necessary to treat advanced pulmonary hypertension and
late-stage peripheral

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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
II/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. 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 UT-15'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
UT-15, 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
UT-15 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. 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
September 30, 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."

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PERIOD FROM
JUNE 26, 1996
(INCEPTION) TO YEAR ENDED NINE MONTHS ENDED
DECEMBER 31, DECEMBER 31, SEPTEMBER 30,
------------ ------------ -------------

1996 1997 1998 1998 1999
---- ---- ---- ---- ----
(UNAUDITED)
CONSOLIDATED STATEMENT OF OPERATIONS DATA: (IN THOUSANDS, EXCEPT PER SHARE DATA)

<S> <C> <C> <C> <C> <C>
Revenue...................................... $ 154 $ 116 $ 54 $ ---- $ 161

Operating expenses:

Research and development.................. 100 2,027 11,015 7,009 22,783

General and administrative................ 85 1,006 2,366 1,796 3,204
------------ ---------- ---------- -------- --------
Loss from operations........................ (31) (2,917) (13,327) (8,805) (25,826)

Net loss.................................... $ (30) $ (2,901) $ (12,835) $ (8,512) $(24,685)

Basic and diluted net loss per share (1).... $ (0.02) $ (0.87) $ (1.54) $ (1.10) $ (1.97)

Shares used in computing basic and diluted
net loss per share (1)..................... 1,667 3,339 8,322 7,771 12,512
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<TABLE>
<CAPTION>
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SEPTEMBER 30, 1999,
-------------------------------------
ACTUAL AS ADJUSTED
------ -----------
CONSOLIDATED BALANCE SHEET DATA: (UNAUDITED)

<S> <C> <C>
Cash, cash equivalents and short-term investments.............. $ 59,649 $ 134,398

Total assets................................................... 63,529 138,278

Accumulated deficit............................................ (40,451) (40,451)

Total stockholders' equity..................................... 59,428 134,177

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

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 started Phase III
clinical studies for UT-15 for advanced pulmonary hypertension and Phase II
clinical studies for UT-15 for late-stage peripheral vascular disease. United
Therapeutics recently completed patient enrollment in two Phase III clinical
trial programs to treat advanced pulmonary hypertension with UT-15, 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. Although
United Therapeutics' products, such as UT-15 and beraprost, appear promising
based on clinical studies to date, they may not be successful in later clinical
studies. 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.

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<PAGE> 8

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 $40.5 million at September 30, 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 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.

All of United Therapeutics' products are in clinical studies, and
United Therapeutics is not yet selling any products. United Therapeutics might
not obtain regulatory approvals for its products, including its lead products,
UT-15 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 UT-15, 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.

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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.

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 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 UT-15 using the MiniMed Inc. microinfusion device
in the field of pulmonary hypertension. In cooperation with United Therapeutics,
MiniMed will be responsible for marketing, sales and customer service. United
Therapeutics is dependent on MiniMed's experience, expertise and performance to
successfully market and sell UT-15 for pulmonary hypertension. If MiniMed is
unsuccessful in its efforts, United Therapeutics' revenues will suffer. See
"Business -- 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 UT-15 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
and Schweizerhall, Inc. for the formulation of UT-15. United Therapeutics relies
on Magellan Laboratories Incorporated to test the purity and stability of each
batch of UT-15. 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 UT-15, 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

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Therapeutics controls compliance issues with respect to the
work formerly 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 UT-15, 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 UT-15; 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.

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 "Business --
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 UT-15; 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.

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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 UT-15, 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 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 the combination of prostacyclin and PEG and to
non-prostacyclin pegylation method as drug formulation and delivery 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.

8
<PAGE> 12

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 Chief Financial Officer, 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 "Business -- 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.

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. United Therapeutics has product liability insurance providing
coverage of up to $5 million for each claim, and $5 million for all claims
combined. 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.

THE YEAR 2000 PROBLEM MAY CAUSE INTERRUPTIONS IN UNITED THERAPEUTICS' SUPPLY OF
DRUG PRODUCTS FOR CLINICAL TRIALS AND DELAY THE COMPLETION OF THOSE TRIALS.

United Therapeutics uses a number of computer software programs and
operating systems in its internal operations, including applications used in
financial business systems and various administrative functions. To the extent
that these software applications, and the software applications of United
Therapeutics' vendors, suppliers, financial institutions and service providers,
contain source code that is unable to appropriately interpret the upcoming
calendar year 2000, some level of modification or even possibly replacement of
such source code or applications will be necessary. United Therapeutics believes
that it has identified and remediated the software applications that are not
Year 2000 compliant.

9
<PAGE> 13

United Therapeutics has contacted all of its major vendors, suppliers,
financial institutions and service providers to ensure they are Year 2000
compliant. Key third party vendors have been asked to certify in writing that
their software or systems are Year 2000 compliant. United Therapeutics has
confirmed with MiniMed that the microinfusion devices used to deliver its key
drug, UT-15, to patients have been tested and are Year 2000 compliant.

United Therapeutics believes its worst case scenario relating to Year
2000 risks includes a power interruption and a lack of pharmaceutical products
to support clinical trials. United Therapeutics is implementing a contingency
plan to cover this situation by building up inventories of its drug products to
sustain its studies for 12 months and has purchased a generator to deal with
power failures. United Therapeutics has now accelerated its spending on
inventory of its drug products in order to build up inventories.

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 is issued, investors purchasing United Therapeutics stock 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 33% 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.

10
<PAGE> 14

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 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. As a result, only appreciation of the price of the common stock will
provide a return to investors in this offering.

11
<PAGE> 15

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>
1999 High Low
- ---- ------- -------
<S> <C> <C>
June 17 - June 30...................................................... $ 12.25 $ 11.63
July 1 - September 30.................................................. 29.88 12.00
October 1 - December 31................................................ 55.88 28.25
</TABLE>

The closing bid price of United Therapeutics common stock on January
7, 2000 was $57.00 per share.

CAPITALIZATION

The following table sets forth United Therapeutics' capitalization as
of September 30, 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 SEPTEMBER 30, 1999
--------------------------

ACTUAL AS ADJUSTED
-------- ------------
(DOLLARS IN THOUSANDS)

<S> <C> <C>
Short-term debt:
Current portion of notes payable............................. $ 21 $ 21

Long-term debt:
Notes payable................................................ $ 1,775 $ 1,775

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;
15,901,967 shares issued and outstanding, actual
and 18,401,967 shares issued and outstanding, as adjusted(1) 159 184
Additional paid-in capital............................................. 99,720 174,444
Accumulated deficit.................................................... (40,451) (40,451)
Total stockholders' equity............................................. 59,428 134,177

Total capitalization .................................................. $ 61,224 $ 135,973
========= ==========
</TABLE>

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

(1) Excludes 1,666,879 shares of common stock issuable upon exercise of stock
options outstanding at September 30, 1999, at a weighted average exercise
price of $14.68 per share. An additional 13,598,442 shares of common stock
are reserved for issuance under United Therapeutics' stock option plan and
employee stock option agreements.

12
<PAGE> 16

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 and 1998, and the consolidated balance
sheet data as of December 31, 1997 and 1998, 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 selected data
presented below for the nine-month periods ended September 30, 1998 and 1999,
and as of September 30, 1999, are derived from the unaudited consolidated
financial statements included elsewhere in this prospectus. The historical
results are not necessarily indicative of results to be expected for future
periods.

<TABLE>
<CAPTION>
PERIOD FROM
JUNE 26, 1996
(INCEPTION) TO YEAR ENDED NINE MONTHS ENDED
DECEMBER 31, DECEMBER 31, SEPTEMBER 30,
1996 1997 1998 1998 1999
CONSOLIDATED STATEMENT --------------- ------------- ----------- ---------- -----------
OF OPERATIONS DATA: (UNAUDITED)
(IN THOUSANDS, EXCEPT PER SHARE DATA)
<S> <C> <C> <C> <C> <C>
Revenue........................................ $ 154 $ 116 $ 54 $ ------ $ 161
Operating expenses:
Research and development..................... 100 2,027 11,015 7,009 22,783
General and administrative................... 85 1,006 2,366 1,796 3,204
-- ----- ----- ----- -----
Total operating expense.................... 185 3,033 13,381 8,805 25,987
--- ----- ------ ----- ------
Loss from operations........................... (31) (2,917) (13,327) (8,805) (25,826)
Other income (expense):
Interest income.............................. 1 135 510 304 1,154
Interest expense............................. ------ (8) (15) (8) (27)
Write-down of investment..................... ------ (111) ------ ------ ------
------ ----- ------ ------ ------
Other, net ------ ------ ------ ------ 18
Total other income, net.................... 1 16 495 296 1,145
- -- --- --- -----
Net loss before income tax..................... (30) (2,901) (12,832) (8,509) (24,681)
Income tax..................................... ------ ------ (3) (3) (4)
------ ------ ----------- ---------- -----------
Net loss....................................... $ (30) $ (2,901) $ (12,835) $ (8,512) $ (24,685)
=============== ============= =========== =========== ===========

Basic and diluted net loss per share (1)....... $ (0.02) $ (0.87) $ (1.54) $ (1.10) $ (1.97)
=============== ============= =========== =========== ===========
Shares used in computing basic and diluted net
loss per share (1)............................. 1,667 3,339 8,322 7,771 12,512
</TABLE>

<TABLE>
<CAPTION>
AS OF DECEMBER 31,
--------------------------------------- AS OF SEPTEMBER 30,
1996 1997 1998 1999
----------- ---------- ---------- -------------------
CONSOLIDATED BALANCE SHEET DATA: (UNAUDITED)
(IN THOUSANDS)
<S> <C> <C> <C> <C>
Cash, cash equivalents and short-term investments......... $ 94 $ 5,018 $ 16,802 $ 59,649
Total assets................................................ 102 5,074 18,747 63,529
Notes payable (2)........................................... ----- ------ 314 1,796
Accumulated deficit......................................... (30) (2,931) (15,767) (40,451)
Total stockholders' equity.................................. 70 4,617 16,676 59,428
</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.

13
<PAGE> 17

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 1999, the adequacy of United Therapeutics' resources to fund operations
through 2002 and the anticipated success and costs of United Therapeutics'
efforts to become Year 2000 compliant. These forward-looking statements reflect
the plans and estimated beliefs of management as of the date of this report.
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 $40.5 million at September 30, 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, UT-15, and other
products. It is anticipated that approximately $6.5 million in cash will be used
for the remainder of 1999 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.

Investments in marketable debt securities at September 30, 1999 were $53.9
million as compared to $10.0 million at December 31, 1998. The increase of
approximately $43.9 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 the nine months ended September 30, 1999.

Accounts payable at September 30, 1999 were $2.2 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 September 30, 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

14
<PAGE> 18

to purchase 1106 Spring Street in Silver Spring, Maryland. That mortgage note is
secured by a certificate of deposit and building and property owned by United
Therapeutics located at that address.

Common stock and additional paid-in capital at September 30, 1999 increased
as compared to amounts at December 31, 1998. This increase of approximately
$67.4 million was due 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, and
approximately $7.5 million in net proceeds from the sale of over-allotment
shares to the underwriters.

RESULTS OF OPERATIONS

NINE MONTHS ENDED SEPTEMBER 30, 1999 AND 1998

Revenue for the nine months ended September 30, 1999 was approximately
$161,000, as compared to none for the corresponding period in 1998. This revenue
was earned under the "orphan drug" grant awarded by the FDA related to United
Therapeutics' development of UT-15 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.

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 $22.8 million for the nine months ended September 30, 1999, as
compared to $7.0 million for the nine months ended September 30, 1998.
Approximately $6.1 million of the increase in research and development expenses
is related to increased levels of patient enrollment in United Therapeutics'
clinical trials of UT-15. Additionally, $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.

General and administrative expenses consist primarily of personnel salaries,
office expenses and professional fees. General and administrative expenses were
$3.2 million for the nine months ended September 30, 1999, as compared to $1.8
million for the nine months ended September 30, 1998. This increase was due
primarily to increased staffing and related travel to support expanded
operations.

Interest income for the nine months ended September 30, 1999 was $1.2
million, as compared to $304,000 for the nine months ended September 30, 1998.
This increase was attributable to an increase in the amount of cash available
for investing resulting from sales of common stock since September 30, 1998,
less amounts used for operations.

YEARS ENDED DECEMBER 31, 1998 AND DECEMBER 31, 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 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, UT-15. In addition, the company
paid up-front licensing fees approximating $2.0 million and consisting of common
stock, options, warrants and cash to

15
<PAGE> 19

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

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.

United Therapeutics' first full year of operations was 1997.
Accordingly, operating expenses for 1997 were significantly higher than in 1996.
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.

PERIOD FROM INCEPTION (JUNE 26, 1996) TO DECEMBER 31, 1996

Revenue from operations from inception on June 26, 1996 to December 31,
1996 was approximately $154,000 which was earned under a contract relating to
primary pulmonary hypertension research. Operating expenses for this period
totaled $185,000 of which approximately $100,000 was for research and
development and approximately $85,000 was for general and administrative
expenses.

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.

United Therapeutics' working capital at September 30, 1999 was $57.5
million, as compared with $15.1 million at December 31, 1998. Current
liabilities at September 30, 1999 were approximately $2.3 million, as compared
with $1.8 million at December 31, 1998. United Therapeutics' debt at September
30, 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 $16.0 million and
$6.3 million for the nine months ended September 30, 1999 and 1998,
respectively. The increase resulted from the expansion of United Therapeutics'
operations, particularly with respect to increased costs for the UT-15 trials.
For the

16
<PAGE> 20

nine months ended September 30, 1999 and 1998, United Therapeutics invested
approximately $1.9 million and $863,000, respectively, in cash for property,
plant, and equipment. Net cash provided by financing activities was
approximately $59.9 million and $17.1 million for the nine months ended
September 30, 1999 and 1998, respectively. Cash flows from financing activities
for the nine months ended September 30, 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 nine months ended September 30, 1998 were
derived primarily from private equity financings during that period.

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 UT-15 and other products. It is
anticipated that approximately $6.5 million in cash will be used for the
remainder of 1999 under these agreements. These expenses will be funded from
existing working capital. United Therapeutics does not expect to make any
milestone or royalty payments during 1999.

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 UT-15 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, 1998, United Therapeutics had available approximately
$10.0 million in net operating loss carryforwards and $3.6 million in business
tax credit carryforwards for federal income tax purposes that expire at various
dates through 2018. As of September 30, 1999, United Therapeutics had available
approximately $29.1 million in net operating loss carryforwards and $8.8 million
in business tax credit carryforwards. 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.

17
<PAGE> 21

YEAR 2000

United Therapeutics uses a number of computer software programs and
operating systems in its internal operations, including applications used in
financial business systems and various administrative functions. To the extent
that these software applications, and the software applications of United
Therapeutics' vendors, suppliers, financial institutions and service providers,
contain source code that is unable to appropriately interpret the upcoming
calendar year 2000, some level of modification or even possibly replacement of
such source code or applications will be necessary. The Company has spent
$100,000 in 1999 on remediation efforts. United Therapeutics believes that it
has identified and remediated the software applications that are not Year 2000
compliant.

United Therapeutics believes its worst case scenario relating to Year 2000
risks includes a power interruption and a lack of pharmaceutical products to
support clinical trials. United Therapeutics implemented a contingency plan to
cover this situation by building up inventories of its drug products to sustain
its studies for 12 months and has purchased a generator to deal with power
failures. United Therapeutics has now accelerated its spending on inventory of
its drug products in order to build up inventories.

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.

In March 1998, the American Institute of Certified Public Accountants issued
Statement of Position, or "SOP", 98-1, "Accounting for the Costs of Computer
Software Developed or Obtained for Internal Use." SOP 98-1 requires that
entities capitalize certain costs related to internal-use software once certain
criteria have been met. United Therapeutics is required to implement SOP 98-1
for the year ending December 31, 1999. Adoption of SOP 98-1 is not expected to
have a material impact on United Therapeutics' financial condition or results of
operations.

In April 1998, the American Institute of Certified Public Accountants issued
Statement of Position 98-5, "Reporting on the Costs of Start-Up Activities." SOP
98-5 requires that entities expense the cost of start-up activities including
organization costs. United Therapeutics is required to implement SOP 98-5 for
the year ending December 31, 1999. Adoption of SOP 98-5 is not expected to have
a material impact on United Therapeutics' financial condition or results of
operations.

18
<PAGE> 22

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, UT-15 and beraprost, are stable
synthetic forms of prostacyclin. UT-15 is delivered subcutaneously and is
currently in two multi-center Phase III clinical trials 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.

In October 1998, United Therapeutics completed a 26-patient, eight-week
clinical trial for UT-15 in primary pulmonary hypertension patients. In this
trial, patients were randomly selected to receive either UT-15 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 UT-15
or the placebo. Results from this trial demonstrated that UT-15 can be safely
administered to severely ill patients on an out-patient basis and also showed
that continuous, subcutaneous dosing of UT-15 leads to improvements in pulmonary
blood pressure and exercise ability. Patients receiving UT-15 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 UT-15 therapy indefinitely.

United Therapeutics is undertaking additional clinical studies. UT-15
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 UT-15 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 beginning a Phase II/III clinical trial
program for Ketotop, a patch that delivers the FDA-approved anti-inflammatory
pain reliever ketoprofen, for the treatment of osteoarthritis.

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<PAGE> 23

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 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%.

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<PAGE> 24

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.

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

21
<PAGE> 25

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 UT-15 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 UT-15, 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

22
<PAGE> 26

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 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 UT-15 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.

23
<PAGE> 27

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.

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. 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 UT-15'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 UT-15, 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 UT-15 and beraprost, its stable analogs of
prostacyclin, as the worldwide standards of care for the treatment of pulmonary
hypertension and peripheral vascular disease. Currently, United Therapeutics is
conducting two multi-center pivotal Phase III clinical trials of UT-15 for
advanced pulmonary hypertension and a Phase II trial of UT-15 for late-stage
peripheral vascular disease. United Therapeutics is also beginning a
multi-center Phase III clinical trial program for beraprost to treat early-stage
peripheral vascular disease and a Phase II 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.

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<PAGE> 28

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 UT-15 therapies for
pulmonary hypertension using MiniMed products. Prior to October 1999, United
Therapeutics outsourced manufacturing of UT-15 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.

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 beginning a Phase II/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 commericalize 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>
UT-15 Subcutaneous Advanced pulmonary hypertension Phase III Worldwide

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

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

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

UT-77 Inhalation Chronic obstructive pulmonary Beginning Phase II Worldwide
disease

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

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<PAGE> 29

UT-15

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

Pulmonary Hypertension

United Therapeutics has focused primarily on developing UT-15 as its
lead product for treating advanced pulmonary hypertension. UT-15 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, UT-15 is
stable at room temperature for up to five years and has a half life in the human
body of approximately 45 minutes. These attributes allow for a safer and more
convenient delivery of UT-15 to patients. Specifically, UT-15 does not need to
be administered by a refrigerated, bulky pump through a surgically implanted
catheter. Instead, UT-15 is delivered by subcutaneous infusion with a
pager-sized MiniMed microinfusion device, the same type of reliable device that
has been used to deliver insulin to over 60,000 diabetics. Subcutaneous delivery
of UT-15 also eliminates the risk of sepsis infection and related
hospitalization associated with the Flolan catheter. UT-15's extended half life
also greatly reduces the risk of death from life-threatening rebound
hypertension in cases of treatment interruption. The stability of UT-15 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 UT-15
therapy are summarized in the following table.

<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------------------
CHARACTERISTIC FLOLAN UT-15
- ---------------------------------------------------------------------------------------------------------------------

<S> <C> <C>
Delivery of drug Intravenous Subcutaneous
Surgical implant of catheter Yes No
Constant refrigeration Yes No
Sterile conditions for frequent drug constitution required Yes No
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>

UT-15 is currently in pivotal Phase III clinical trials for advanced
pulmonary hypertension. In earlier clinical trials, United Therapeutics
demonstrated that UT-15, 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 UT-15, 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:

- UT-15 can be safely administered to severely ill patients on
an outpatient basis;

- Continuous dosing of UT-15 leads to improvement in pulmonary
blood pressure and exercise ability; and

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

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<PAGE> 30

Each patient who finished this study in October 1998 elected to receive
UT-15 therapy indefinitely.

United Therapeutics has completed enrollment of 224 and 235 advanced
pulmonary hypertension patients, without distinction between primary and
secondary pulmonary hypertension, in two pivotal Phase III trials of UT-15 at
approximately 40 select medical centers. The main objective of the trials is to
determine the impact of continuous subcutaneous UT-15 therapy on exercise
ability after 12 weeks of therapy. The primary endpoints for these trials are
identical to those in the studies to approve Flolan. Secondary objectives
include assessing the impact of UT-15 on the symptoms of advanced pulmonary
hypertension.

Peripheral Vascular Disease

United Therapeutics is also developing UT-15 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 UT-15 administered
intravenously to patients with late-stage peripheral vascular disease. The study
demonstrated that UT-15 can be administered safely to patients with late-stage
peripheral vascular disease and substantially increased blood flow in the
affected areas of the legs. United Therapeutics will next undertake a
pre-pivotal study to optimize dosing levels of UT-15 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
UT-15, 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 UT-15 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
beginning 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.

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<PAGE> 31

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 beginning 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 elastase overproduction 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 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 beginning Phase
II/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.

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<PAGE> 32

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 UT-15 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 UT-15. The term
of the agreement commenced on September 3, 1997 and continues for seven years
after the FDA grants a new drug approval for UT-15. 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 UT-15 for advanced
pulmonary hypertension;

- Take responsibility for the marketing and sales of UT-15 to
physicians who treat pulmonary hypertension;

- Train patients and care providers in the use of the MiniMed
device with UT-15;

- 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 UT-15 infusion pumps
exclusively from MiniMed unless MiniMed's infusion pumps fail to receive certain
government approvals.

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.

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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
now known as UT-15 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 UT-15. If United
Therapeutics grants to a third party any license to UT-15, 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 now known as UT-15. 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 UT-15
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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<PAGE> 34

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

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<PAGE> 35

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 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.

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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 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.

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 UT-15
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 drug designation for UT-15 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 UT-15 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
UT-15. In November 1998, United Therapeutics received a $430,000 grant from the
FDA's orphan drug grant program for the development of UT-15 for the treatment
of primary pulmonary hypertension, $215,000 of which has been recognized as
revenue through September 30, 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 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

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<PAGE> 37

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 UT-15 for United Therapeutics. 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 UT-15 for United Therapeutics. United Therapeutics has contracted
with Schweizerhall, Inc. as a second source of manufacturing. An analytical
testing laboratory, Magellan Laboratories Inc., tests the purity and stability
of each batch of manufactured UT-15 for compliance with FDA standards.

MARKETING AND SALES

United Therapeutics has contracted with MiniMed to exclusively handle,
pursuant to firm purchase orders, sales and marketing of UT-15 when formulated
for subcutaneous delivery for pulmonary hypertension. MiniMed has extensive
experience in marketing subcutaneous microinfusion systems. United Therapeutics
will cooperate with MiniMed on marketing, and will assume responsibility for
billing and obtaining reimbursement for sales of UT-15. United Therapeutics
retains sales and marketing rights to UT-15 for all indications other than
pulmonary hypertension. See "-- The MiniMed Strategic Alliance."

United Therapeutics intends to contract with MiniMed or a similarly
qualified organization for the sales and marketing of UT-15 for peripheral
vascular disease and for its other products. The company believes that there are
several qualified drug sales organizations that are capable of selectively
marketing drugs for target diseases in North America and Europe. United
Therapeutics does not intend to establish its own sales force, although it will
actively collaborate and co-promote its products with the drug sales
organizations with which it contracts.

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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 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:

- UT-15 will compete with Flolan, the only FDA-approved
treatment for primary pulmonary hypertension;

- UT-15 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;

- Boehringer Ingelheim International GmbH was conducting a
controlled 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

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<PAGE> 39

- 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 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 UT-15 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

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manufacturing facilities will be subject to continual review and periodic
inspections. Because United Therapeutics intends to contract with third parties
for manufacturing of its products, its control of compliance with FDA
requirements will be incomplete. 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.

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 UT-15 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 with Federal Insurance Company. It is a master policy with limits of $5
million in the aggregate and $5 million per occurrence. In addition, United
Therapeutics owns policies covering clinical trials in Austria, France, Spain
and Italy. United Therapeutics believes this insurance is adequate.

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EMPLOYEES

United Therapeutics had 53 employees as of December 22, 1999. 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 three 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
Research Triangle Park lease expires in June 2001, and the District of Columbia
lease expires in February 2001 with an extension at United Therapeutics' option.
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, Chief
Financial Officer, Treasurer and Director
Shelmer D. Blackburn, Jr.(1) 38 Vice President of Operations, Secretary and Director
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., which she founded and served
as Chairman and Chief Executive Officer until December 1992, 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. In 1999, Mr. Blackburn was promoted to
Vice President of Operations. 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 and Chief Financial
Officer since December 1997. Prior to 1996, Dr. Cloutier served as President of
CatoPharma Canada, Inc. from April 1992 to February 1997. From April 1990 to
April 1992, Dr. Cloutier was the Vice President of Clinical Operations at
Quintiles Transnational Corp. Dr. Cloutier has

39
<PAGE> 43

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.S., 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.

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, except that the term of the
initial Class I directors expires at the annual meeting of stockholders in 2000.
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, with two classes of three directors and one class
of two 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 the results
and scope of the audit and other services provided by United Therapeutics'
independent auditors; and a Nominating Committee, which reviews and recommends
candidates for the Board of Directors.

40
<PAGE> 44

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.

41
<PAGE> 45

Jay H. Sanders, M.D., F.A.C.P., Dr. Sanders is the President and CEO of
The Global Telemedicine Group, Founding President of the American Telemedicine
Association, Professor of Medicine (Adjunct) at Johns Hopkins University School
of Medicine, and Visiting Professor, Yale University School of Medicine. He is a
member of the Executive Committee of the Board of Directors of the Universal
Service Administrative Corporation and serves on the Department of Defense
Telemedicine Board of Directors. Dr. Sanders is the Senior Editor of the
Telemedicine Journal and is generally recognized as America's leading expert on
telemedicine. In addition to serving on the United Therapeutics Scientific
Advisory Board, Dr. Sanders is also Chairman of the Unither Telemedicine
Advisory Board.

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.

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.

42
<PAGE> 46

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>
1999 $167,340 $18,000 80,000
Martine A. Rothblatt................................. 1998 120,000 83,333
Chairman and Chief Executive Officer

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

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

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

<TABLE>
<CAPTION>
OPTION GRANTS IN FISCAL YEAR
INDIVIDUAL GRANTS
--------------------------------------------------
POTENTIAL REALIZABLE VALUE AT
NUMBER OF % OF TOTAL ASSUMED ANNUAL RATES OF
SECURITIES OPTIONS 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 9/09 691,784 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>

43
<PAGE> 47

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 VALUE OF UNEXERCISED
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........... 26,667 203,332 $413,338 $1,996,647
James W. Crow.................. 25,001 143,331 445,021 1,756,621
Gilles Cloutier................ 20,000 100,000 340,000 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 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. At the end
of the first year of her agreement, 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, divided by 18. At the end of each of the next four
years, Ms. Rothblatt will receive an option to purchase the number of shares
equal to one percent of the increase in United Therapeutics' market
capitalization over the prior year, 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.

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
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;

44
<PAGE> 48

- 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.
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.

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

45
<PAGE> 49

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 September 30, 1999 options to purchase 1,341,075 shares of common
stock were outstanding under the Plan and employee stock option agreements.
There are 13,598,442 shares reserved for future grants or purchases under the
Plan and employee stock option agreements, 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 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

Comparison of 6 Month Cumulative Total Return Among
United Therapeutics Corporation, the S&P MidCap 400
Index and the S&P Biotechnology Index

<TABLE>
<CAPTION>
Cumulative Total Return
---------------------------------------

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

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

46
<PAGE> 50

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 September 30, 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 $100,000.

In July 1999, a subsidiary of Unither Telemedicine Services Corporation
entered into an agreement to form AboveCable.com, Inc., a Delaware corporation.
This subsidiary received 20 percent of the initial outstanding common stock of
the new corporation 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 AboveCable.com, Inc. 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 September 30, 1999, the equity
investment by the subsidiary of Unither Telemedicine in AboveCable.com, Inc. had
an original cost of zero and was reported at zero. The subsidiary's equity in
the underlying net assets was approximately $380,000.

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
$301,000 during the nine months ended September 30, 1999, $157,000 during the
year ended December 31, 1998, $81,000 during the year ended December 31, 1997
and $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
$162,273 during 1998 and $180,067 for the nine months ended September 30, 1999
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.

47
<PAGE> 51

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.

48
<PAGE> 52

PRINCIPAL STOCKHOLDERS

The following table sets forth certain information with respect to the
beneficial ownership of United Therapeutics' common stock as of
January 18, 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. Except as
otherwise noted below, 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 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, including the 2,500,000 shares of common stock offered by the
selling stockholders. 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.

NUMBER OF SHARES OF
COMMON STOCK PERCENTAGE OF
NAME BENEFICIALLY OWNED OUTSTANDING SHARES
- ---- ------------------ ------------------
<S> <C> <C>
Noah A. Samara................................... 2,885,229 15.6%
Martine A. Rothblatt(1).......................... 1,210,594 6.5%
SMALLCAP World Fund, Inc. ....................... 1,200,000 6.5%
One Market Street
Stuart Tower
Suite 1800
San Fransico, CA 94105
Jean-Guy Lambert(2).............................. 475,276 2.6%
James W. Crow(3)................................. 428,334 2.3%
Gilles Cloutier(4)............................... 426,666 2.3%
Shelmer D. Blackburn, Jr.(5)..................... 419,742 2.3%
Olivia Giscard d'Estaing(6)...................... 155,766 *
David Gooray, M.D................................ 11,333 *
All directors and executive officers as a group
(9 persons)(7)............................ 6,043,919 32.4%
</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 26,667 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 25,001 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 20,000 shares of common
stock issuable upon exercise of stock options within 60 days.

(5) Includes 15,001 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 133,668 shares of common stock issuable upon exercise of stock
options within 60 days.

49
<PAGE> 53

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,
the number of shares that may be 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.

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
</TABLE>

50
<PAGE> 54
<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>
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 17,100 0.1% 17,100 0.00
Opportunities Fund...........................

Putnam Variable Trust - VT Health Sciences Fund... 22,300 0.1% 22,300 0.00

Toronto Dominion Green Line Health Sciences Fund.. 50,000 0.3% 50,000 0.00

T. Rowe Price Health Sciences Fund, Inc........... 50,000 0.3% 50,000 0.00

T. Rowe Price New Horizons Fund, Inc.............. 100,000 0.5% 100,000 0.00

</TABLE>

51
<PAGE> 55

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.

52
<PAGE> 56

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 January 18, 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, and approximately 160 holders, including
the fifteen named selling stockholders of the common stock. 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 3,398,471 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 898,471 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

53
<PAGE> 57

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.

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."

54
<PAGE> 58

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 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 70,000 shares of common stock of United Therapeutics.

EXPERTS

The consolidated balance sheets of United Therapeutics, as of December
31, 1997 and 1998, and the consolidated statements of operations, stockholders'
equity and cash flows for the period from inception on June 26, 1996 to December
31, 1996 and for the years ended December 31, 1997 and 1998 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.

55
<PAGE> 59

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.

56
<PAGE> 60

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, 1997 and 1998 and September 30, 1999
(unaudited).............................................................................................. F-3

Consolidated Statements of Operations for the period from inception (June 26, 1996) to December 31,
1996, the years ended December 31, 1997 and 1998 and the nine months ended September 30, 1998
(unaudited) and 1999 (unaudited).......................................................................... F-4

Consolidated Statements of Stockholders' Equity for the period from inception (June 26, 1996) to
December 31, 1996, the years ended December 31, 1997 and 1998 and the nine months ended September 30,
1999 (unaudited).......................................................................................... F-5

Consolidated Statements of Cash Flows for the period from inception (June 26, 1996) to December 31,
1996, the years ended December 31, 1997 and 1998 and the nine months ended September 30, 1998
(unaudited) and 1999 (unaudited).......................................................................... F-6

Notes to Consolidated Financial Statements................................................................ F-7
</TABLE>

F-1
<PAGE> 61

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, 1997
and 1998, and the related consolidated statements of operations, stockholders'
equity, and cash flows for the period from inception (June 26, 1996) to December
31, 1996 and the years ended December 31, 1997 and 1998. 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, 1997 and 1998, and
the results of their operations and their cash flows for the period from
inception (June 26, 1996) to December 31, 1996 and the years ended December 31,
1997 and 1998 in conformity with generally accepted accounting principles.

KPMG LLP

McLean, Virginia
April 2, 1999, except for Note 12,
which is as of June 11, 1999

F-2
<PAGE> 62

UNITED THERAPEUTICS CORPORATION

CONSOLIDATED BALANCE SHEETS

<TABLE>
<CAPTION>
DECEMBER 31,
------------------------------ SEPTEMBER 30,
1997 1998 1999
------------ ------------- --------------
(UNAUDITED)
<S> <C> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents.................. $ 5,018,145 $ 6,779,067 $ 5,785,746
Investments (note 9)....................... -- 10,023,190 53,863,750
Accounts receivable........................ -- 53,750 12,048
Prepaid expenses........................... -- -- 103,246
----------- ----------- ------------
Total current assets.................... 5,018,145 16,856,007 59,764,790
----------- ------------ ------------
Property, plant, and equipment (notes 3 and 8):
Land....................................... -- 134,370 421,431
Building and improvements.................. -- 866,322 2,337,197
Furniture and equipment.................... 66,489 416,881 531,728
Less -- accumulated depreciation........... (14,568) (50,065) (133,416)
----------- ------------ ------------
Property, plant, and equipment, net..... 51,921 1,367,508 3,156,940
----------- ------------ ------------
Certificate of deposit....................... -- 509,506 531,810
Other........................................ 3,603 13,817 75,547
----------- ------------ ------------
Total assets............................ $ 5,073,669 $ 18,746,838 $ 63,529,087
=========== ============ ============

LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable........................... $ 383,323 $ 1,707,103 $ 2,162,640
Accrued professional fees.................. 41,931 14,161 94,067
Payroll taxes withheld..................... 27,913 33,629 20,058
Current portion of note payable (note 8)... -- 4,098 21,206
----------- ------------ ------------
Total current liabilities............... 453,167 1,758,991 2,297,971
Note payable, excluding current portion (note
8)......................................... -- 310,262 1,775,424
Other liabilities............................ 3,319 1,759 28,078
----------- ------------ ------------
Total liabilities....................... 456,486 2,071,012 4,101,473
----------- ------------ ------------

Commitments and contingencies (notes 5 and 10)

Stockholders' equity (note 6):
Preferred stock, par value $.01, 10,000,000
shares authorized at December 31, 1997 and
1998, and September 30, 1999, no shares
issued.................................. -- -- --
Common stock, par value $.01, 50,000,000 shares
authorized at December 31, 1997 and 1998,
100,000,000 shares authorized at September 30,
1999, 5,882,833, 10,115,597, and 15,901,967
shares issued and outstanding at December 31,
1997 and 1998 and September 30, 1999,
respectively (note 12).................. 58,829 101,156 159,020
Additional paid-in capital................... 7,489,655 32,341,370 99,720,381
Accumulated deficit.......................... (2,931,301) (15,766,700) (40,451,787)
----------- ------------ ------------
Total stockholders' equity.............. 4,617,183 16,675,826 59,427,614
----------- ------------ ------------
Total liabilities and stockholders'
equity................................ $ 5,073,669 $ 18,746,838 $ 63,529,087
=========== ============ ============
</TABLE>

See accompanying notes to consolidated financial statements.

F-3
<PAGE> 63

UNITED THERAPEUTICS CORPORATION

CONSOLIDATED STATEMENTS OF OPERATIONS

PERIOD FROM
JUNE 26, 1996 NINE MONTHS ENDED
(INCEPTION) TO YEAR ENDED DECEMBER 31, SEPTEMBER 30,
DECEMBER 31, -------------------------------- -------------------------------
1996 1997 1998 1998 1999
-------------- -------------- -------------- -------------- -------------
(UNAUDITED)

<S> <C> <C> <C> <C> <C>
Grant revenue (note 3)....... $ 153,972 $ 115,909 $ 53,750 $ -- $ 161,250
---------- ----------- ------------ ----------- ------------
Operating expenses:
Research and development 99,642 2,026,718 11,015,053 7,008,575 22,783,815
General and
administrative........... 84,876 1,006,354 2,366,494 1,795,941 3,204,408
---------- ----------- ------------ ----------- ------------
Total operating
expenses.............. 184,518 3,033,072 13,381,547 8,804,516 25,988,223
---------- ----------- ------------ ----------- ------------
Loss from operations..... (30,546) (2,917,163) (13,327,797) (8,804,516) (25,826,973)
Other income (expense):
Interest income............ 469 134,726 510,068 303,788 1,154,386
Interest expense........... -- (8,334) (14,570) (8,215) (26,941)
Rental income.............. -- -- -- -- 11,548
Rental expense............. -- -- -- -- (5,193)
Other...................... -- -- -- -- 11,540
Write-down of investment
(note 9)................. -- (110,453) -- -- --
---------- ----------- ------------ ----------- ------------
Total other income....... 469 15,939 495,498 295,573 1,145,340
---------- ----------- ------------ ----------- ------------
Net loss before income
tax................... (30,077) (2,901,224) (12,832,299) (8,508,943) (24,681,633)
Income tax (note 7).......... -- -- (3,100) (2,855) (3,454)
---------- ----------- ------------- ------------- -------------
Net loss................. $ (30,077) $(2,901,224) $(12,835,399) $(8,511,798) $(24,685,087)
========== =========== ============ ============ =============
Net loss per common share --
basic and diluted.......... $ (0.02) $ (0.87) $ (1.54) $ (1.10) $ (1.97)
========== =========== ============ =========== ============
Weighted average number of
common shares outstanding
-- basic and diluted....... 1,666,663 3,339,437 8,321,749 7,770,620 12,512,107
========== =========== ============ =========== ============
</TABLE>

See accompanying notes to consolidated financial statements.

F-4
<PAGE> 64

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, June 26, 1996..................... -- $ -- $ -- $ -- $ --
Issuance of common stock................... 1,666,663 16,667 83,333 -- 100,000
Net loss................................... -- -- -- (30,077) (30,077)
---------- --------- ----------- ------------ ------------
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
(unaudited)................................ 111,370 1,114 1,989,251 -- 1,990,365
Issuance of common stock through initial
public offering (unaudited)................ 4,500,000 45,000 48,829,171 -- 48,874,171
Issuance of common stock to underwriters for
over-allotment shares (unaudited).......... 675,000 6,750 7,507,759 -- 7,514,509
Stock issued for exclusive license agreement
(unaudited).............................. 500,000 5,000 8,995,000 -- 9,000,000
Options issued in exchange for services
(unaudited).............................. -- -- 57,830 -- 57,830
Net loss (unaudited)....................... -- -- -- (24,685,087) (24,685,087)
---------- --------- ----------- ------------- -------------
Balance, September 30, 1999 (unaudited).... 15,901,967 $ 159,020 $99,720,381 $(40,451,787) $ 59,427,614
========== ========= =========== ============= ============
</TABLE>

See accompanying notes to consolidated financial statements.

F-5
<PAGE> 65

UNITED THERAPEUTICS CORPORATION

CONSOLIDATED STATEMENTS OF CASH FLOWS

<TABLE>
<CAPTION>
PERIOD FROM
JUNE 26, 1996 NINE MONTHS ENDED
(INCEPTION) TO YEAR ENDED DECEMBER 31, SEPTEMBER 30,
DECEMBER 31, --------------------------- ---------------------------
1996 1997 1998 1998 1999
-------------- ----------- ------------ ----------- ------------
(UNAUDITED)

<S> <C> <C> <C> <C> <C>
Cash flows from operating activities:
Net loss..................................... $ (30,077) $(2,901,224) $(12,835,399) $(8,511,798) $(24,685,087)
Adjustments to reconcile net loss to net
cash used in operating activities:
Depreciation............................... 1,168 13,400 35,497 24,930 86,740
Loss on disposals of equipment............. -- -- -- -- 9,319
Stock issued for exclusive license
agreement................................ -- -- 1,500,000 1,500,000 9,000,000
Stock and options issued in exchange for
services................................. -- 20,000 136,511 108,085 57,830
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.... -- -- (23,229) -- (918,420)
Changes in operating assets and liabilities:
Accounts receivable........................ -- -- (53,750) -- 41,702
Prepaid expenses........................... -- -- -- -- (103,246)
Employee advances.......................... -- -- -- (42,000) --
Other assets............................... (3,721) 118 (10,214) (10,250) (61,730)
Accounts payable........................... 23,127 363,515 1,323,601 715,661 453,580
Accrued professional fees.................. -- 41,931 (27,770) (33,945) 79,906
Payroll taxes withheld..................... 9,353 18,560 5,716 (27,913) (13,571)
Other liabilities.......................... -- -- -- -- 16,662
--------- ----------- ------------ ----------- ------------
Net cash used in operating activities...... (150) (2,324,913) (9,596,037) (6,277,230) (16,036,315)
--------- ----------- ------------ ----------- ------------

Cash flows used in investing activities:
Purchases of property, plant, and equipment.. (5,838) (60,651) (1,033,953) (862,582) (1,868,862)
Purchases of investments and certificate of
deposit.................................... -- (110,453) (10,509,467) (502,202) (100,818,444)
Sales and maturities of investments.......... -- -- -- -- 57,874,000
--------- ----------- ------------ ----------- ------------
Net cash used in investing activities...... (5,838) (171,104) (11,543,420) (1,364,784) (44,813,306)
--------- ----------- ------------ ----------- ------------

Cash flows from financing activities:
Proceeds from issuance of common stock....... 100,000 6,920,150 22,904,531 17,090,572 58,379,045
Proceeds from convertible loan and note
payable.................................... -- 500,000 -- -- 1,798,000
Payments of principal on note payable........ -- -- (2,771) (1,691) (315,730)
Principal payments under capital lease
obligations................................ -- -- (1,381) (1,020) (5,015)
--------- ----------- ------------ ----------- ------------
Net cash provided by financing activities.. 100,000 7,420,150 22,900,379 17,087,861 59,856,300
--------- ----------- ------------ ----------- ------------

Net increase (decrease) in cash and cash
equivalents.............................. 94,012 4,924,133 1,760,922 9,445,847 (993,321)

Cash and cash equivalents, beginning of period -- 94,012 5,018,145 5,018,145 6,779,067
--------- ----------- ------------ ----------- ------------
Cash and cash equivalents, end of period...... $ 94,012 $ 5,018,145 $ 6,779,067 $14,463,992 $ 5,785,746
========= =========== ============ =========== ============

Supplemental schedule of noncash investing and
financing activities:
Equipment acquired under a capital lease..... -- -- -- -- 16,629
Note payable issued for building............. $ -- $ -- $ 317,130 $ 317,130 $ --
========= =========== ============ =========== ============
Loan principal and accrued interest
converted into common stock................ $ -- $ 508,334 $ -- $ -- $ --
========= =========== ============ =========== ============

Supplemental cash flow information -- cash
paid for interest........................... $ -- $ -- $ 14,570 $ 8,215 $ 26,942
========= =========== ============ =========== ============
</TABLE>

See accompanying notes to consolidated financial statements.

F-6
<PAGE> 66

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 three wholly owned subsidiaries: LungRx, Unither
Pharmaceuticals, Inc. (UPI) and Unither Telemedicine Services Corporation
(UTSC). UPI and UTSC were formed in 1998. None of these subsidiaries have
commenced operations.

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

PRINCIPLES OF CONSOLIDATION

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

UNAUDITED INTERIM CONSOLIDATED FINANCIAL INFORMATION

The interim consolidated financial statements of the Company for the nine
months ended September 30, 1998 and 1999 included herein have been prepared by
the Company, without audit, pursuant to the rules and regulations of the
Securities and Exchange Commission. Certain information and footnote disclosures
normally included in financial statements prepared in accordance with generally
accepted accounting principles have been condensed or omitted pursuant to such
rules and regulations relating to interim financial statements. In the opinion
of management, the accompanying unaudited interim consolidated financial
statements reflect all adjustments, consisting only of normal recurring
adjustments, necessary to present fairly the financial position of the Company
at September 30, 1999, and the results of its operations and its cash flows for
the nine months ended September 30, 1998 and 1999.

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 $4,960,748, $6,769,034, and
$6,180,429 (unaudited) at December 31, 1997 and 1998 and September 30, 1999,
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............. 3-7 years

</TABLE>

F-7
<PAGE> 67

UNITED THERAPEUTICS CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

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 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.

INVESTMENTS

The Company's only investment at December 31, 1998 is considered a
held-to-maturity security. 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.

FAIR VALUE OF FINANCIAL INSTRUMENTS

The carrying amounts of cash and cash equivalents, investments, accounts
payable and payroll taxes withheld approximate fair value due to their short
maturities. The fair value of the Company's note payable (see note 8) is
estimated to be the carrying amount, since it is an adjustable rate note.

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.

F-8
<PAGE> 68

UNITED THERAPEUTICS CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

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 option grants made in 1996 and subsequent years 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.

GRANT REVENUE

Grant revenues in 1996 and 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 for the first year totaling
$215,000. 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 at December 31, 1998 and
September 30, 1999 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.

CONCENTRATIONS OF SUPPLIERS

The Company currently relies on three suppliers for the formulation and
manufacture of its lead compound, UT-15, on a single supplier to test the purity
and stability of each batch of UT-15, and a single supplier for the delivery
device to administer UT-15 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 formulation, manufacture, and
distribution of UT-15, 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 UT-77
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 1996 and 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
$153,972 and $115,909 for the period ended December 31, 1996 and the year ended
December 31, 1997, respectively.

F-9
<PAGE> 69

UNITED THERAPEUTICS CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

CONVERTIBLE LOAN

In 1997, the Chairman and CEO loaned the Company $500,000. The principal and
accrued interest, totaling $508,334 based on an interest rate of 10 percent,
were converted on August 19, 1997 into 309,428 shares of common stock under the
terms of the loan agreement. The conversion price was approximately $1.62 per
share.

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 1997 and 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 $15,000 and $12,000 for the years ended December 31, 1997 and
1998, respectively, and $12,000 (unaudited) and $22,500 (unaudited) for the nine
months ending September 30, 1998 and 1999, respectively.

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

LEGAL SERVICES

During 1996, 1997 and 1998, 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 $5,000, $81,000 and $157,000 during
the period ended December 31, 1996 and during years ended December 31, 1997 and
1998, respectively, for services rendered by the law firm. The Company incurred
expenses of approximately $141,507 (unaudited) and $301,417 (unaudited) during
the nine months ended September 30, 1998 and 1999, 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 under the agreement were approximately
$162,000 for the year ended December 31, 1998 and $180,067 (unaudited) for the
nine months ended September 30, 1999.

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 now known as
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

F-10
<PAGE> 70
UNITED THERAPEUTICS CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

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 now known as UT-15. Under the 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 UT-15. The term of the agreement is for seven years after the FDA
grants a new drug approval for UT-15 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 UT-15 for advanced
pulmonary hypertension. The Company has agreed to pay MiniMed the greater of a
percentage of the revenues derived from commercial sales of UT-15 (see note 5)
of $5,000 per patient per year.

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
$1,785,000 for the year ended December 31, 1998 and $9,100,000 (unaudited) for
the nine months ended September 30, 1999.

F-11
<PAGE> 71
UNITED THERAPEUTICS CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

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 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

F-12
<PAGE> 72

UNITED THERAPEUTICS CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

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
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.

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 UT-15 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 $0, $1,700,000 and $7,600,000 in 1996, 1997, and 1998,
respectively. Total expenses for the nine months ended September 30, 1998 and
1999 were approximately $4,625,000 (unaudited) and $12,401,000 (unaudited),
respectively. Total payments under these agreements in 1999 are not expected to
exceed $13,000,000.

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. The agreement may be terminated by the
Company if the Company decides not to fund further drug development. Annual
funding by the Company is expected to be between $500,000 and $1,000,000 over
the next several years. 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.

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. Funding by the
Company under this agreement is expected to be between $600,000 and $700,000
annually over the next 30 months. 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>
<CAPTION>
YEAR ENDING DECEMBER 31,
<S> <C>
1999...................... $ 250,000
2000...................... 1,275,000
2001...................... 550,000
2002...................... 3,200,000
2003...................... 4,500,000
</TABLE>

F-13
<PAGE> 73
UNITED THERAPEUTICS CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

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 an initial
period of five years. The agreement also requires the Company to issue options
to the CEO at the end of each of the next five years 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.

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 totalling $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.

The Company sold 111,370 shares of common stock in January and February 1999
at a price of $18.00 per share.

In April 1999, the Company's Board of Directors and stockholders approved an
amendment to the Company's Certificate of Incorporation, which will become
effective upon consummation of the initial public offering, increasing the
number of authorized shares of common stock to 100,000,000 shares (see note 12).

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.

F-14
<PAGE> 74
UNITED THERAPEUTICS CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

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 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 expense.

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 expense.

The Company issued a total of 37,694 shares of common stock in recognition
of consulting services rendered during the year ended December 31, 1998. 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 another 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 a research and development expense.

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. For the year
ended December 31, 1998 and nine months ended September 30, 1999, options to
purchase a total of 610,401 shares and 464,590 shares (unaudited), respectively,
were granted under this Plan at exercise prices of $3.00 to $19.80.

Additional options have been granted to employees outside of the Plan which
have terms between five and ten years.

F-15
<PAGE> 75
UNITED THERAPEUTICS CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

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 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>
PERIOD FROM
INCEPTION
(JUNE 26, 1996) YEAR ENDED NINE MONTHS ENDED
TO DECEMBER 31, SEPTEMBER 30,
DECEMBER 31, ----------------------------- ----------------------------
1996 1997 1998 1998 1999
-------------- ------------ ------------- ------------ -------------
(UNAUDITED)
<S> <C> <C> <C> <C> <C>
Net loss:
As reported....................... $(30,077) $(2,901,224) $(12,835,399) $(8,511,798) $(24,685,087)
Pro forma......................... (30,077) (2,905,862) (12,989,645) (8,530,011) (25,009,468)
Basic and diluted loss per common share:
As reported..................... $ (0.02) $ (0.87) $ (1.54) $ (1.10) $ (1.97)
Pro forma....................... $ (0.02) $ (0.87) $ (1.56) $ (1.10) $) (2.00)
-------- ----------- ------------ ----------- -------------
</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 1998 and the nine months ending
September 30, 1999 were:

<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31, NINE MONTHS ENDED
1998 SEPTEMBER 30, 1999
----------------------- ---------------------------
(UNAUDITED)
<S> <C> <C>
Dividend yield 0 percent 0 percent
Expected volatility 0.10 percent 0.10 percent - 76.0 percent
Risk free interest rate 4.73 percent 6.0 percent
Expected lives 7.5 years 7.5 years
</TABLE>

A summary of the status of the Company's employee stock options as of
December 31, 1997 and 1998 and September 30, 1999, and changes during the years
and period then ended is presented below:

<TABLE>
<CAPTION>
1997 1998 SEPTEMBER 30, 1999
---------------------- -------------------- -----------------------
WEIGHTED- WEIGHTED- WEIGHTED-
AVERAGE AVERAGE AVERAGE
EXERCISE EXERCISE EXERCISE
SHARES PRICE SHARES PRICE SHARES PRICE
---------- --------- --------- --------- -------- ---------
(UNAUDITED)
<S> <C> <C> <C> <C> <C> <C>
Outstanding at beginning of
period......................... -- $ -- 274,000 $13.77 878,485 $12.69
Granted........................... 274,000 13.77 610,401 12.12 464,590 21.37
Exercised......................... -- -- -- -- -- --
Forfeited......................... -- -- (5,916) 3.00 (2,000) 3.00
--------- ------ -------- ------ ---------- ------
Outstanding at end of period...... 274,000 $13.77 878,485 $12.69 1,341,075 $15.72
========= ====== ======== ====== ========== ======
Options exercisable at end of
period.......................... 21,250 $ 7.80 180,318 $ 8.28 315,893 $ 8.72
========= ====== ======== ====== ========== ======
Weighted-average fair value of
options granted during the
period.......................... $ 0.06 $ 3.30 $ 15.89
========= ======== ==========

</TABLE>

F-16
<PAGE> 76

UNITED THERAPEUTICS CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

The following table summarizes information about stock options outstanding
at December 31, 1998:

<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>
$ 3.00 141,818 5.7 $ 3.00 68,318 $ 3.00
9.00 236,000 5.2 9.00 68,333 9.00
15.00 150,667 8.9 15.00 30,333 15.00
16.50 66,667 8.9 16.50 13,334 16.50
18.00 200,000 10.0 18.00 -- --
19.80 83,333 10.0 19.80 -- --
- -------------- ------- ---- ------ ------- ------
$3.00 -- 19.80
==============
878,485 7.75 $12.69 180,318 $ 8.28
======= ==== ====== ======= ======
</TABLE>

The following table summarizes information about stock options outstanding
at September 30, 1999 (unaudited):

<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>
$ 3.00 139,818 4.91 $ 3.00 81,318 $ 3.00
9.00 236,000 4.48 9.00 175,334 9.00
12.38 8,000 9.79 12.38 500 12.38
13.38 25,000 9.79 13.38 1,250 13.38
15.00 150,667 8.15 15.00 30,499 15.00
16.50 66,667 8.15 16.50 13,334 16.50
16.75 201,825 9.79 16.75 10,091 18.00
18.00 217,165 9.26 18.00 3,567
19.80 83,333 9.25 19.80 ----- -----
23.50 10,000 10.00 23.50 ----- -----
27.50 202,600 10.00 27.50 -----
- ------------- --------- --------- ------- ------- ------
$3.00 - 27.50
============= 1,341,075 7.74 $ 15.72 315,893 $ 8.72
========= ========= ======= ======= ======
</TABLE>

In addition to options issued to employees, the Company also issued options
to consultants during the year ended December 31, 1998 and the nine months ended
September 30, 1999. A total of 6,333 shares with exercise prices of $15.00 to
$18.00, were outstanding at December 31, 1998. A total of 42,472 shares
(unaudited), with exercise prices of $15.00 to $29.00, were outstanding at
September 30,1999.

F-17
<PAGE> 77
UNITED THERAPEUTICS CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

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:

PERIOD FROM
JUNE 26, 1996 NINE MONTHS ENDED
(INCEPTION) TO YEAR ENDED DECEMBER 31, SEPTEMBER 30,
DECEMBER 31, --------------------------- ---------------------------
1996 1997 1998 1998 1999
-------------- ------------ ------------ ------------ ------------
(UNAUDITED)
<S> <C> <C> <C> <C> <C>
Federal tax provision
(benefit) computed at
the statutory rate......... $(10,527) $(1,015,428) $(4,362,981) $(2,893,041) $(8,391,755)
State tax provision
(benefit), net of
federal tax provision
(benefit).................. (595) (113,936) (842,180) (493,701) (1,112,261)
Change in the beginning
of the period valuation
allowance for deferred
tax assets allocated to
tax expenses............... 11,023 1,127,859 7,564,698 5,103,687 11,130,077
General business credit
generated.................. -- -- (3,005,476) (2,254,795) (5,183,339)
Nondeductible expenses
and other.................. 99 1,505 649,039 540,705 3,560,732
-------- ----------- ----------- ----------- -----------
Total income tax
expense................. $ -- $ -- $ 3,100 $ 2,855 $ 3,454
======== =========== =========== =========== ===========
</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 amounts used for
income tax purposes. Significant components of the Company's deferred tax assets
as of December 31, 1997 and 1998 and September 30, 1999, respectively, are as
follows:

<TABLE>
<CAPTION>
DECEMBER 31,
-------------------------- SEPTEMBER 30,
1997 1998 1999
------------ ------------ --------------
(UNAUDITED)
<S> <C> <C> <C>
Deferred tax assets:
Net operating loss carryforwards............. $ 973,412 $ 4,245,686 $ 10,176,752
General business credit...................... -- 3,640,146 8,824,943
Cumulative effect of using cash basis
accounting for income tax purposes........ 165,311 690,302 723,983
Furniture and equipment principally due to
differences in depreciation............... 159 (19,164) (27,795)
Nonqualifed stock options.................... -- 146,610 135,775
----------- ----------- ------------
Total deferred tax assets................. 1,138,882 8,703,580 19,833,658
Valuation allowance............................ (1,138,882) (8,703,580) (19,833,658)
----------- ----------- ------------
Net deferred tax assets................... $ -- $ -- $ --
=========== =========== ============
</TABLE>

Based on the weight of available evidence, management has determined that it
is more likely than not that the entire deferred tax asset amount will 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 $1,127,859 and $7,564,698 for the years ended December 31, 1997 and
1998, respectively, and $11,130,078 (unaudited) for the nine months ended
September 30, 1999.

At December 31, 1998, the Company had net operating loss carryforwards of
approximately $10,000,000 and business tax credit carryforwards of approximately
$3,600,000 for federal income tax purposes which expire at various dates from
2011 through 2018. The respective amounts at September 30,

F-18
<PAGE> 78

UNITED THERAPEUTICS CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

1999 were approximately $29,100,000 (unaudited) and $8,800,000 (unaudited).
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. NOTE 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. The mortgage currently bears an interest rate of 8.75
percent, and is payable in monthly installments through 2022. The mortgage is
collateralized by the deed of trust on the building.

Future minimum principal payments under the note payable are as follows:

<TABLE>
<CAPTION>
YEAR ENDING DECEMBER 31,
<S> <C>
1999...................... $ 4,098
2000...................... 4,471
2001...................... 5,305
2002...................... 5,788
2003...................... 5,809
2004 and thereafter....... 288,889
---------
314,360

Less current portion...... (4,098)
---------
$ 310,262
=========
</TABLE>

9. INVESTMENTS

Investments at December 31, 1997 consisted of an equity investment in a
joint venture totalling $110,453 which was carried at the lower of cost or net
realizable value. Due to the speculative nature of this investment, it was
deemed to have no realizable value for financial statement purposes, and was
written down to $0 in 1997. During 1998, the Company terminated its involvement
in the joint venture. No amounts were recovered.

Investments at December 31, 1998 consisted of a single debt security issued
by the Federal Home Loan Mortgage Corporation. This security matured at its face
value of $10,049,000 on January 20, 1999. Its fair value at December 31, 1998
was $10,025,887. Its amortized cost was $10,023,190, with gross unrealized
holding gains of $25,810, for the year ended December 31, 1998. After maturing
on January 20, 1999, the face value of $10,049,000 was deposited into a money
market account.

10. 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.

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

F-19
<PAGE> 79

UNITED THERAPEUTICS CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

maintenance. Also in March 1999, the Company leased an automobile for its CEO.
Approximate minimum annual rent payments due under these noncancelable leases
are as follows:

<TABLE>
<CAPTION>
YEAR ENDING DECEMBER 31,
<S> <C>
1999...................... $ 30,000
2000...................... 39,000
2001...................... 12,000
2002...................... 3,000
</TABLE>

Total rent expense for the period ended December 31, 1996 and the years
ended December 31, 1997 and 1998 was $0, $25,340 and $97,033, respectively.
Total rent expense for the nine months ended September 30, 1998 and 1999 were
approximately $71,297 (unaudited) and $128,560 (unaudited), respectively.

11. INITIAL PUBLIC OFFERING

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.

12. REVERSE STOCK SPLIT AND INCREASE IN AUTHORIZED COMMON STOCK

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 June 11, 1999, the Company increased the total number of authorized
shares of common stock to 100,000,000.

13. OTHER EVENTS (UNAUDITED)

INITIAL PUBLIC OFFERING

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.

UNDERWRITERS' EXERCISE OF OPTION ON OVER-ALLOTMENT SHARES

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.

NOTES PAYABLE

In June 1999, the Company refinanced its 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 September 30, 1999 and is
secured by the building and property owned by the Company located at 1110 Spring
Street in Silver Spring, Maryland.

F-20
<PAGE> 80
UNITED THERAPEUTICS CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

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 September 30, 1999 and is secured by
a certificate of deposit and the building and property owned by the Company
located at 1106 Spring Street in Silver Spring, Maryland.

ABOVECABLE.COM, INC.

In July 1999, a subsidiary of Unither Telemedicine Services Corporation
(UTSC) entered into an agreement to form 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
AboveCable.com, Inc. and the exclusive rights to offer telemedicine and
electronic health services at the portal level. The Company has agreed to
provide the services of its Chief Executive Officer as Vice Chair and a director
of the new company. 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 September 30, 1999,
UTSC's subsidiary's 20 percent investment in AboveCable.com, Inc. had an
original cost of zero and was reported at zero. The subsidiary's equity in the
underlying net assets was approximately $380,000.

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 infrared 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 lease terminated on November 1, 1999. At September 30,
1999, accounts receivable in the accompanying consolidated balance sheet
includes $3,000 due from Quantum Medical Corporation. At September 30, 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 $100,000. A member of the Company's Scientific Advisory Board
received approximately 6 percent of the initial outstanding common stock in the
new company in exchange for his willingness to serve as CEO of Quantum Medical
Corporation.

TENANT LEASES

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 6).

F-21
<PAGE> 81
UNITED THERAPEUTICS CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

The minimum annual rents due from tenants are approximately as follows:

<TABLE>
<CAPTION>
YEARS ENDING DECEMBER 31:
<S> <C>
2000 $ 184,000
2001 130,000
2002 31,000
2003 8,000
</TABLE>

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 nine
month period ended September 30, 1999, no employer contributions were made to
the Plan.

LICENSE 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 quarter ended September 30, 1999 were $100,000.

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 $3.3
million, including transaction costs. Cash of $200,000 and the Company's common
stock valued at $3.0 million was paid to the sellers as consideration. A
holdback equivalent to $500,000 of the Company's common stock, 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 intangibles resulting from the acquisition are
expected to be approximately $2.6 million and will be amortized in a straight
line manner over periods ranging up to five years. The acquisition will be
accounted for as a purchase. Beginning on October 7, 1999, SynQuest's operations
will be included in the Company's consolidated financial statements.

MINIMED, INC.

In November, the Company and MiniMed agreed on a set of guidelines
pursuant to the terms of their agreement. The guidelines provide that the
Company will purchase pumps and supplies from MiniMed at a discount off of
MiniMed's list prices rather than pay a percentage of revenues from UT-15

F-22
<PAGE> 82

UNITED THERAPEUTICS CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

therapy or per patient fees. 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 UT-15 infusion pumps exclusively from
MiniMed unless MiniMed's infusion pumps fail to receive certain government
approvals.

KETOTOP, LLC

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

F-23
<PAGE> 83

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.

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*
========

*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 September 30, 1999, the Registrant had granted stock options
to purchase 168,905 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, 7,916 have been canceled,
and the remainder are outstanding.

(2) As of September 30, 1999, the Registrant had granted stock options
to purchase an additional 730,137 shares of its common stock to employees,
consultants and directors, all of which are outstanding.

II-1
<PAGE> 84

(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.

(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 an aggregate of 2,500,000 shares of common stock to fifteen accredited
investors.

The sales and issuances of 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 sales and
issuances of securities described in paragraphs (2)-(15) above were deemed to be
exempt from registration under the Securities Act by virtue of Rule 4(2),
Regulation D or Regulation S promulgated thereunder.

Appropriate legends were affixed to the stock certificates issued in
the aforementioned transactions. Similar legends were imposed in connection with
any subsequent sales of any such securities. All recipients either received
adequate information about the Registrant or had access, through employment or
other relationships, to such information.

II-2
<PAGE> 85

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
</TABLE>

II-3
<PAGE> 86

<TABLE>
<S> <C>
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).*
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.*/**
21 Subsidiaries of the Registrant.**
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> 87

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> 88

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 13th day of January, 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
---------- ----- ----

<S> <C> <C>
/s/ MARTINE A. ROTHBLATT Chairman of the Board and
------------------------------- Chief Executive Officer January 13, 2000
Martine A Rothblatt

/s/ MARTINE A. ROTHBLATT* President, Chief Operating
------------------------------- Officer and Director January 13, 2000
James W. Crow

/s/ MARTINE A. ROTHBLATT* Chief Financial Officer,
------------------------------- Chief Accounting Officer, January 13, 2000
Gilles Cloutier Executive Vice President,
Treasurer and Director

/s/ MARTINE A. ROTHBLATT* Vice President of Operations,
------------------------------- Secretary and Director January 13, 2000
Shelmer D. Blackburn, Jr.

/s/ MARTINE A. ROTHBLATT* Director January 13, 2000
-------------------------------
Jean-Guy Lambert

/s/ MARTINE A. ROTHBLATT* Director January 13, 2000
-------------------------------
Noah A. Samara
</TABLE>

II-6
<PAGE> 89

<TABLE>
<S> <C> <C>
/s/ MARTINE A. ROTHBLATT* Director January 13, 2000
-------------------------------
David Gooray

/s/ MARTINE A. ROTHBLATT* Director January 13, 2000
-------------------------------
Olivia Giscard d'Estaing
</TABLE>

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

II-7
<PAGE> 90

UNITED THERAPEUTICS CORPORATION
EXHIBIT INDEX

<TABLE>
<CAPTION>
EXHIBIT NO. DESCRIPTION
- ----------- -----------

<S> <C>
5 Opinion of Bryan Cave LLP.
23.1 Consent of KPMG LLP.
23.2 Consent of Bryan Cave LLP. Reference is made to Exhibit 5.
</TABLE>

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

<PAGE> 1

EXHIBIT 5

<TABLE>
<S> <C> <C>
BRYAN CAVE LLP

ST. LOUIS, MISSOURI 700 THIRTEENTH STREET, N. W. LONDON, ENGLAND
NEW YORK, NEW YORK RIYADH, SAUDI ARABIA
KANSAS CITY, MISSOURI WASHINGTON, D. C. 20005-3960 KUWAIT CITY, KUWAIT
OVERLAND PARK, KANSAS ABU DHABI, UNITED ARAB EMIRATES
PHOENIX, ARIZONA (202) 508-6000 DUBAI, UNITED ARAB EMIRATES
SANTA MONICA, CALIFORNIA HONG KONG
IRVINE, CALIFORNIA FACSIMILE: (202) 508-6200 SHANGHAI, PEOPLE'S REPUBLIC OF CHINA
IN ASSOCIATION WITH BRYAN CAVE, A
MULTINATIONAL PARTNERSHIP.
</TABLE>

January 14, 2000

Board of Directors
United Therapeutics Corporation
1110 Spring Street
Silver Spring, MD 20910

Ladies and Gentlemen:

We have acted as special counsel to United Therapeutics Corporation, a
Delaware corporation (the "Company"), in connection with the filing of a
Registration Statement on Form S-1 (the "Registration Statement") of the Company
with the Securities and Exchange Commission (the "SEC") under the Securities Act
of 1933, as amended (the "Securities Act"), for the registration of an aggregate
of 2,500,000 shares of the Company's common stock, $.01 par value (the
"Shares"). All of the Shares are being registered for resale on behalf of the
selling stockholders named in the Registration Statement, who will acquire the
Shares from the Company pursuant to the Purchase Agreements dated December 22,
1999 by and between the Company and each selling stockholder (the "Purchase
Agreements").

In connection therewith, we have examined and relied without
investigation as to matters of fact upon the Registration Statement,
certificates of public officials, statements and certificates of officers of the
Company, and originals or copies certified to our satisfaction of the Amended
and Restated Certificate of Incorporation and Amended and Restated Bylaws of the
Company, minutes of meetings of the Board of Directors of the Company and such
other corporate records, documents, certificates and instruments as we have
deemed necessary or appropriate in order to enable us to render the opinions
expressed below.

In rendering this opinion, we have assumed the genuineness of all
signatures on all documents examined by us, the authenticity of all documents
submitted to us as originals and the conformity to authentic originals of all
documents submitted to us as certified or photostatted copies. We have also
assumed the due authorization, execution and delivery of all documents.

<PAGE> 2

United Therapeutics Corporation
January 14, 2000
Page 2

Based on the foregoing and in reliance thereon, we are of the opinion
that:

1. The Company has been duly incorporated and is in good standing
under the laws of the State of Delaware.

2. The Shares are duly authorized and, when issued in accordance
with the Purchase Agreements, will be validly issued, fully paid and
non-assessable.

This opinion is not rendered with respect to any laws other than the
laws of the State of Delaware.

We hereby consent to the filing of this opinion as Exhibit 5 to the
Registration Statement and to the use of our name under the caption "Lawyers" in
the prospectus filed as a part thereof. We also consent to your filing copies of
this opinion as an exhibit to the Registration Statement with agencies of such
states as you deem necessary in the course of complying with the laws of such
states regarding the offering and sale of the Shares.

Very truly yours,

/s/ BRYAN CAVE LLP

BRYAN CAVE LLP

<PAGE> 1
EXHIBIT 23.1

The Board of Directors
United Therapeutics Corporation:

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

KPMG LLP

McLean, Virginia
January 14, 2000