Liquidia Corporation (NASDAQ:LQDA) is a biopharmaceutical company focused on the development, manufacture, and commercialization of products that address unmet patient needs, with a current focus on rare cardiopulmonary diseases such as pulmonary arterial hypertension (PAH) and pulmonary hypertension associated with interstitial lung disease (PH-ILD). The company's lead product candidate, YUTREPIA, is an inhaled dry powder formulation of treprostinil designed to improve the therapeutic profile of treprostinil by enhancing deep lung delivery while using a convenient, low effort dry-powder inhaler (DPI).

Financials

Liquidia's financial performance in recent years has been marked by significant investments in research and development, as the company has worked to advance its pipeline of product candidates. In the fiscal year ended December 31, 2023, the company reported annual revenue of $17,488,000 and a net loss of $78,502,000. The company's annual operating cash flow was -$41,564,000, and its annual free cash flow was -$42,854,000.

In the first quarter of 2024, Liquidia reported revenue of $2,972,000, down from $4,493,000 in the same period of the prior year. The decrease was primarily due to favorable gross-to-net rebate adjustments recorded in the prior year and the impact of lower sales quantities in the current year as compared to the same period in the prior year. Cost of revenue increased to $1,467,000 in the first quarter of 2024, up from $654,000 in the same quarter of 2023, primarily due to the company's sales force expansion during the fourth quarter of 2023.

Research and development expenses were $10,057,000 in the first quarter of 2024, up from $5,278,000 in the same period of the prior year. The increase was primarily due to a $2,000,000 increase in personnel expenses, including stock-based compensation, related to increased headcount, and a $1,700,000 increase in clinical expenses related to the company's L606 program. Additionally, there was a $1,300,000 increase in expenses related to the YUTREPIA program, driven by higher clinical and supply expenses related to the ASCENT study.

General and administrative expenses were $20,249,000 in the first quarter of 2024, compared to $7,793,000 in the same quarter of 2023. The increase was primarily due to a $3,100,000 increase in legal fees related to the company's ongoing YUTREPIA-related litigation, a $5,900,000 increase in personnel expenses, including stock-based compensation, and a $2,200,000 increase in commercial and consulting expenses in preparation for the potential commercialization of YUTREPIA.

The company reported a net loss of $40,928,000, or $0.54 per basic and diluted share, for the first quarter of 2024, compared to a net loss of $11,745,000, or $0.18 per basic and diluted share, for the same period in 2023.

Liquidity

Liquidia ended the first quarter of 2024 with $157,858,000 in cash and cash equivalents, which included $100,000,000 in gross proceeds from a private placement of equity and a third advance from HealthCare Royalty Partners under the company's revenue interest financing agreement.

Recent Developments

The company's lead product candidate, YUTREPIA, is currently awaiting final approval from the U.S. Food and Drug Administration (FDA) for the treatment of both PAH and PH-ILD. In November 2021, the FDA tentatively approved the company's New Drug Application (NDA) for YUTREPIA for the treatment of PAH. In July 2023, Liquidia filed an amendment to its NDA to add PH-ILD to the label for YUTREPIA.

Liquidia's Chief Executive Officer, Dr. Roger Jeffs, believes the market for inhaled treprostinil in PAH and PH-ILD can exceed $3 billion at peak sales, driven by the expanded PH-ILD market and the availability of a more affordable dry powder inhaler option. However, the company notes that there is still significant unmet need, as approximately 40% of United Therapeutics' sales continue to come from the nebulized TYVASO formulation, despite the availability of the more portable TYVASO DPI.

Liquidia's Chief Medical Officer, Dr. Rajeev Saggar, provided an update on the company's ongoing ASCENT trial, an open-label study evaluating the safety, tolerability, and titratability of YUTREPIA in patients with PH-ILD. The company has enrolled 7 patients to date, with the median dose reaching 132.5 micrograms during week 8, which is comparable to 15 breaths of the nebulized TYVASO formulation. The company remains encouraged by the tolerability and titratability profile observed in the study and looks forward to presenting more robust clinical data at a future medical conference.

In addition to YUTREPIA, Liquidia is also developing L606, an investigational, liposomal formulation of treprostinil administered twice-daily with a short-duration next-generation nebulizer. The company continues to observe a favorable tolerability and titratability profile of L606 in an ongoing open-label safety study, with patients titrating to a maximum dose of 378 micrograms twice daily, which would be comparable to 26 to 28 breaths of the nebulized TYVASO formulation administered four times daily.

Liquidia's General Counsel, Russell Schundler, provided an update on the company's legal proceedings. The combination of District Court, Patent Trial and Appeal Board, and Federal Circuit rulings have led to the removal of the previous injunction issued in 2022, and United Therapeutics' regulatory exclusivity tied to PH-ILD expired on March 31, 2024. While United Therapeutics has filed two additional lawsuits against Liquidia and the FDA, the company remains confident in its ability to defend its position and secure prompt approval of YUTREPIA for both PAH and PH-ILD.

Liquidia's Chief Operating Officer and Chief Financial Officer, Michael Kaseta, highlighted the company's strong financial position, with $157,858,000 in cash and cash equivalents as of March 31, 2024. Kaseta noted that the company's commercial team and sales force are ready to launch YUTREPIA immediately upon receiving final FDA approval, with commercial inventory available within days or a week of approval.

Outlook

Looking ahead, Liquidia is well-positioned to capitalize on the growing market for inhaled treprostinil therapies. The company's focus on developing differentiated products, such as YUTREPIA and L606, combined with its strong financial position and commercial readiness, make it an intriguing player in the rare cardiopulmonary disease space. As the company awaits final FDA approval for YUTREPIA, investors will be closely watching for updates on the regulatory and legal fronts, as well as the company's progress in advancing its pipeline of innovative product candidates.