Executive Summary / Key Takeaways

• Transformational Launch of YUTREPIA: Liquidia has achieved an unprecedented and highly successful commercial launch of YUTREPIA, its PRINT-enabled inhaled treprostinil, for PAH and PH-ILD, exceeding internal expectations and rapidly influencing the standard of care.
• Differentiated Technology Driving Uptake: The proprietary PRINT technology enables YUTREPIA's superior tolerability, titratability to higher doses (up to 3 times that of nebulized Tyvaso), and deep lung delivery, leading to strong patient adoption and a high referral-to-start conversion rate of approximately 85%.
• Rapid Path to Profitability: The company achieved positive adjusted EBITDA of $10.1 million in its first full quarter of YUTREPIA sales (Q3 2025), significantly ahead of guidance, and recorded its first month of positive net cash flow in September 2025, signaling a strong financial trajectory.
• Robust Pipeline and Strategic Expansion: Liquidia is strategically expanding YUTREPIA's clinical utility through niche studies, including transitions from oral therapies, and advancing its next-generation sustained-release inhaled treprostinil, L606, with a global pivotal study (RESPIRE) initiating later in 2025.
• Intense Competitive and Legal Landscape: Despite strong early commercial success, Liquidia faces ongoing patent and trade secret litigation from United Therapeutics, which could pose significant risks to YUTREPIA's market availability and financial performance, alongside competition from established and emerging therapies.

A New Dawn in Pulmonary Hypertension: Liquidia's Strategic Foundation

Liquidia Corporation, a biopharmaceutical company founded in 2004, is carving out a significant niche in the challenging landscape of respiratory and vascular diseases, particularly pulmonary arterial hypertension (PAH) and pulmonary hypertension associated with interstitial lung disease (PH-ILD). The company's overarching strategy centers on leveraging its proprietary PRINT technology to develop differentiated inhaled therapies that address critical unmet patient needs, aiming to redefine the standard of care. This foundational strength, coupled with a targeted commercial approach and a robust pipeline, positions Liquidia as a compelling, albeit still emerging, force in a market dominated by larger players.

The PAH and PH-ILD markets represent a substantial opportunity, with the inhaled treprostinil segment alone valued at approximately $2 billion and growing. Oral prostacyclins, such as Uptravi and Orenitram, constitute another $2 billion market. Liquidia's strategic ambition is to become the "first-in-choice" prostacyclin across these segments, not just in inhaled therapies. This ambition is underpinned by its unique technological differentiators and a commercial strategy focused on rapid market penetration and patient access.

The PRINT Advantage: Precision Engineering for Enhanced Therapy

At the heart of Liquidia's innovation lies its proprietary PRINT (Particle Replication In Non-wetting Templates) technology. This advanced particle engineering platform enables the precise production of uniform drug particles, a critical factor for inhaled therapies. The tangible benefits of PRINT technology are central to YUTREPIA's differentiated product profile.

YUTREPIA, an inhaled dry powder formulation of treprostinil, is designed to enhance deep lung delivery while utilizing a convenient, low-effort dry-powder inhaler (DPI). This design allows for higher dose levels than currently marketed inhaled treprostinil therapies, directly addressing a key limitation of existing treatments. For instance, interim data from Liquidia's open-label ASCENT study in PH-ILD patients demonstrated that patients could titrate to doses that are three times higher than the labeled target dose of nebulized Tyvaso. This rapid dose escalation was achieved within weeks, not months, leading to observed median improvements in 6-minute walk distance of 21.5 meters at week 8, increasing to 31.5 meters at week 16. This contrasts sharply with published data for Tyvaso DPI, where a significant 69% of treatment-naive patients discontinued therapy after a median of only 40 days, primarily due to cough and clinical worsening. YUTREPIA's favorable tolerability, with only 18.5% of ASCENT patients discontinuing by week 16 and no discontinuations for serious drug-related adverse events including cough, underscores its potential to drive greater patient compliance and durability of therapy.

Looking ahead, Liquidia is advancing L606, an investigational liposomal formulation of treprostinil, administered twice-daily via a next-generation nebulizer. L606 aims to provide more consistent 24-hour drug exposure, including during sleeping hours, and early data suggests it may be the "most tolerable inhaled treprostinil developed." This sustained-release profile, coupled with a palm-sized nebulizer, represents a further evolution in inhaled treprostinil delivery. The global pivotal study for L606, RESPIRE, is slated to initiate later in 2025, with enrollment expected to begin in the first half of 2026. For investors, these technological advancements translate into a strong competitive moat, potentially leading to higher average selling prices (ASPs), lower manufacturing complexities, and a dominant market position in specific therapeutic niches.

Competitive Dynamics: A Challenger's Ascent

The biopharmaceutical market for PAH and PH-ILD is highly competitive, featuring established giants and specialized players. Liquidia directly competes with United Therapeutics , Gilead Sciences , Johnson & Johnson (via its Janssen subsidiary), and Insmed Incorporated .

United Therapeutics , with products like Remodulin and Tyvaso, holds a significant market presence. While UTHR benefits from a broader product pipeline and extensive market experience, Liquidia's YUTREPIA offers a more patient-centric innovation in inhaled delivery. Liquidia's agility in product development is a strength, but it currently lags UTHR in overall scale, revenue growth, and cash flow generation. Liquidia's Q2 to Q3 2025 revenue growth of $45.2 million, capturing 75% of the aggregate growth in the inhaled treprostinil market compared to Tyvaso and Tyvaso DPI, demonstrates its strong initial competitive capture.

Gilead Sciences (GILD), with its diversified portfolio, and Johnson & Johnson (JNJ), with its global reach, represent formidable competitors with superior financial resources and operational resilience. Liquidia's focus on niche technological advancements, particularly with PRINT, allows it to differentiate, but its smaller scale makes it vulnerable to the broader market strategies and R&D capabilities of these larger entities. Insmed (INSM), also focused on rare respiratory diseases, presents a more direct comparison in inhaled therapies. Liquidia's YUTREPIA, with its potential for notably better patient adherence due to its formulation, could offer a unique value proposition against Insmed's offerings.

The market for generic treprostinil injection, where Liquidia shares profits with Sandoz, faces increasing competition from multiple generic entrants, including Teva (TEVA), Par Pharmaceutical, Dr. Reddy's Laboratories (RDY), and Alembic. This has led to declining sales volumes for Sandoz's product, exacerbated by the limited availability of the CADD-MS 3 infusion pump. Liquidia is actively seeking alternative pump solutions, which will require FDA 510k clearance.

Financial Performance and Liquidity: A Rapid Turnaround

Liquidia's financial trajectory has seen a significant inflection point with the commercialization of YUTREPIA. For the nine months ended September 30, 2025, the company reported a net loss of $83.48 million, with an accumulated deficit of $640.90 million. However, the third quarter of 2025, YUTREPIA's first full quarter of launch, marked a pivotal shift.

The company generated $51.70 million in net product sales of YUTREPIA for the three months ended September 30, 2025, contributing to $58.19 million for the nine-month period. This rapid uptake is a testament to the product's market acceptance. In contrast, service revenue from the Sandoz promotion agreement decreased by 40% to $2.67 million for the quarter, primarily due to lower sales volumes of Treprostinil Injection.

Operating expenses reflect the company's transition to a commercial entity. Selling, general and administrative (SG&A) expenses surged by 98% to $40.10 million for the quarter, driven by increased headcount, commercial and consulting expenses for YUTREPIA, and higher legal fees. Research and development (R&D) expenses decreased by 21% to $9.30 million for the quarter, as personnel shifted towards commercialization, though L606 program costs are increasing.

Crucially, Liquidia achieved positive adjusted EBITDA of $10.1 million in Q3 2025, significantly ahead of its previous guidance of profitability within 3 to 4 quarters post-launch. September 2025 also marked the company's first month of positive net cash flow, adding $5 million in net cash, a trend expected to continue into 2026.

As of September 30, 2025, Liquidia held $157.50 million in cash and cash equivalents, bolstered by an expanded $100 million financing agreement with HealthCare Royalty Partners, with tranches tied to YUTREPIA's commercial milestones. This liquidity position is deemed sufficient to meet financial obligations and minimum cash covenants for at least the next twelve months, supporting both YUTREPIA's commercialization and L606's development.

Outlook and Strategic Initiatives

Liquidia's outlook is one of sustained growth, driven by YUTREPIA's market penetration and pipeline advancements. Management expects YUTREPIA product sales to continue increasing, supported by expanding market access as new-to-market blocks are removed and contracts with major commercial payers are fully implemented. The company's commercial team is focused on increasing both the breadth and depth of prescribers, initially targeting new patient starts and then facilitating transitions from existing therapies.

Beyond its initial launch, Liquidia plans to broaden YUTREPIA's clinical utility through niche open-label studies, including a study in PAH patients transitioning from oral prostacyclins and evaluating proof-of-concept studies in IPF and PPF. The goal is to further demonstrate YUTREPIA's versatility and benefits across a wider patient population. The planned global pivotal study for L606, RESPIRE, is a key long-term initiative, aiming to establish L606 as a next-generation inhaled treprostinil with a superior profile. The company is also expanding its manufacturing footprint in North Carolina, with plans to potentially triple production capacity by 2026 to meet anticipated demand.

Risks and Challenges

Despite its promising trajectory, Liquidia faces significant risks. The most prominent is the ongoing litigation with United Therapeutics , including patent infringement lawsuits (327 Patent Litigation, 782 Patent Litigation) and trade secret misappropriation claims. These legal battles seek injunctive relief that could potentially force YUTREPIA off the market or restrict its label, leading to substantial monetary damages and severely impacting Liquidia's ability to commercialize its lead product. The outcome of these litigations remains uncertain, with a wide range of potential remedies.

Operational risks include reliance on single suppliers for key components of YUTREPIA (active pharmaceutical ingredient, device, encapsulation, packaging) and L606, which could lead to supply disruptions. The limited availability of infusion pumps for Sandoz's generic treprostinil injection also constrains service revenue. Furthermore, the company's concentration of operations in Morrisville, NC, exposes it to risks from natural disasters or unforeseen events. Broader industry trends, such as the Inflation Reduction Act (IRA) and potential tariffs on pharmaceutical imports, could also impact pricing and profitability. As Liquidia transitions from a smaller reporting company to a large accelerated filer in 2025, it will incur increased compliance costs and reporting requirements.

Conclusion

Liquidia Corporation stands at a pivotal juncture, having successfully launched YUTREPIA, a product poised to transform the treatment paradigm for PAH and PH-ILD. The company's proprietary PRINT technology has delivered a therapy with demonstrated advantages in tolerability, titratability, and deep lung delivery, resonating strongly with both physicians and patients. This technological edge, coupled with a disciplined commercial strategy, has rapidly translated into impressive financial performance, including early profitability and positive cash flow.

While the path ahead is not without significant challenges, particularly the ongoing legal disputes with United Therapeutics (UTHR) and the inherent complexities of the biopharmaceutical market, Liquidia's strategic focus on innovation, execution, and reinvestment positions it for sustained long-term growth. The continued development of L606 further underscores its commitment to leadership in the PAH space. For discerning investors, Liquidia represents an opportunity to participate in the growth of a company that is leveraging cutting-edge technology to address critical unmet needs, with strong early commercial traction and a clear roadmap for future value creation.