Good morning, and welcome, everyone, to the Liquidia Corporation Second Quarter 2025 Financial Results and Corporate Update Conference Call. My name is Nadia, and I will be your conference operator today. I would like to remind everyone that this conference call is being recorded. I will now hand the conference call over to Jason Adair, Chief Business Officer. Please go ahead, sir.

Thank you, operator, and good morning, everyone. It's my pleasure to welcome you to the Liquidia Corporation Second Quarter 2025 Financial Results and Corporate Update Call. Joining the call today are Chief Executive Officer, Dr. Roger Jeffs; Chief Operating Officer and CFO, Michael Kaseta; Chief Medical Officer, Dr. Rajeev Saggar; Chief Commercial Officer, Scott Moomaw; and General Counsel, Rusty Schundler. Before we begin, please note that today's conference call will contain forward-looking statements, including those regarding future results, unaudited and forward-looking financial information and the company's future performance and/or achievements. These statements are subject to known and unknown risks and uncertainties, which may cause actual results or performance to differ materially. For more information, please refer to the documents filed with the SEC available on our website. With that, I'd like to turn the call over to Roger for our prepared remarks. Roger?

Thanks, Jason, and good morning, everyone. We are very pleased and excited to share our first commercial data for YUTREPIA with everyone this morning. It's been a spectacular beginning. Just over 11 weeks ago, we were proud to introduce YUTREPIA for the treatment of patients with pulmonary arterial hypertension, PAH, and pulmonary hypertension associated with interstitial lung disease, PH-ILD. Within 1 week of approval, we were live and in the market, shipping product, supporting physicians and most importantly, delivering therapy to patients. This wasn't simply a product introduction. It was a launch executed with purpose and precision and one that has been extremely well received by the physician and patient communities that we now serve. Today, we will share data and as promised, provide additional granularity around key metrics to improve transparency regarding this early launch period. Since May, specialty pharmacies have reported over 900 unique patient prescriptions, leading to more than 550 patient starts on YUTREPIA. That pace of adoption is unprecedented in the treprostinil space and underscores the power of our PRINT-enabled prostacyclin product. We had no doubt about the key attributes of YUTREPIA's profile to enhance deep lung delivery with an easy-to-use, low-effort device, enabling a wide range of doses. I can honestly say in all my years of launching drugs in this space, this has truly outpaced all expectations, even mine, which were very, very high. Not only does this signal the value of what we have developed, but also that existing products fall short in addressing the needs of many patients. In conversations with prescribers and in communication from patients, the ease of use, tolerability, especially with regard to cough and ability to escalate dose to clinical effect represents a marked and meaningful improvement in the quality of care. YUTREPIA's differentiated product profile, paired with the commercial success in driving brand awareness has led to an early and enthusiastic uptake as you have seen in the prescription and start numbers. In fact, it's been an unabated sprint since day 1 of launch. We've seen broad demand from cardiologists and pulmonologists with prescriptions occurring at both specialty centers and community practices, and they are treating a broad group of patients across both diseases who are prostacyclin naive, transitioning from TYVASO and TYVASO DPI and even moving from oral prostacyclins. YUTREPIA is truly off to a strong start and quickly positioning itself as potentially the best-in-class and first-in-choice option for patients in need of a prostacyclin therapy. Anticipating the strong interest, our market access team prepared premium white glove services and reimbursement support to allow patients to gain early access to YUTREPIA. Health care providers have responded positively to the program's co-pay assistance and 28-day free vouchers, a first for an inhaled prostacyclin therapy. As a way of providing some insight, prescriptions received during the first 6 weeks of launch had a 75% script-to-start conversion rate. It's especially noteworthy that this early momentum has been achieved in spite of the customary period of new-to-market blocks and non-formulary positioning. We see the potential for accelerating growth and possibly higher conversion rates as we continue to expand market access during the third and fourth quarters. While the commercial team has been driving YUTREPIA's robust uptake, our clinical team has been analyzing maturing data from the ongoing open-label ASCENT study, which was fully enrolled with 54 PH-ILD patients in March. This analysis includes the safety and observational exploratory efficacy data up to week 16. The ASCENT study was intentionally designed to include a real-world PH-ILD population treated with YUTREPIA. In particular, we treated patients ranging from mild pulmonary hypertension to those with more advanced hemodynamic and forced vital capacity impairments and even patients listed for lung transplantation. The observations at week 8 and week 16 are indeed impressive. The tolerability remains very favorable, as evidenced by the fact that only 18.5% of patients discontinued the study at week 16 with no discontinuations for serious or drug-related adverse events including cough. For context, this favorable tolerability is juxtaposed by prospective data of TYVASO DPI from the National Jewish Health Center, a prominent pulmonary care center, where 69% of treatment-naive patients discontinued Tyvaso DPI in a median time of only 40 days with the primary reasons for discontinuation being cough and clinical worsening. Taking a slightly deeper look at the favorable tolerability that we are observing in the ASCENT study of those patients that reported a treatment-related cough, the vast majority, or 24 of 26 patients, reported mild cough and only 2 patients reported a moderate cough. However, it should also be noted that in the longitudinal analysis, the main data and simplified cough scores remained essentially unchanged from baseline through week 16, suggesting the cough overall tended to be transient in nature and not worsened with the addition of YUTREPIA, even with escalating doses and therefore, likely similar to these patients' historical cough that is associated with their underlying interstitial lung disease. This tolerability is helping patients escalate to higher doses. The median dose at week 8 was 132.5 micrograms or approximately 15 breath equivalents to Tyvaso and 159 micrograms at week 16, approximately 18 breath equivalents to Tyvaso with the highest exposure of 380 micrograms comparable to approximately 36 breaths four times per day of Tyvaso nebulizer. The net result of greater tolerability and higher achieved doses also correlates with a robust efficacy result with the observed median improvements in 6-minute walk distance of 21.5 meters at week 8, which increased further to 31.5 meters at week 16. Overall, this dataset continues to highlight the robust efficacy and durability of YUTREPIA in a real-world population of PH-ILD patients. We look forward to sharing the detailed data with the medical community targeting the PH Professional Network Symposium Conference in mid-September and a major respiratory conference in October. Now I will pass the call to Mike who continues to guide the company with a firm hand on the financials and with an eye towards supporting continued growth.

Thank you, Roger, and good morning, everyone. In order to save time for more of your questions, I'd just like to hit the headlines on the financial statements filed this morning with the SEC and in our press release. We closed the quarter with over $173 million in cash and cash equivalents on the balance sheet. A solid position that will help us bridge to profitability over the coming quarters as we continue the commercial rollout of YUTREPIA, invest in our pipeline, and expand operational capabilities. On the revenue side, we generated $8.8 million in the second quarter, of which $6.5 million came from YUTREPIA product sales, which began shipping in June. The additional $2.3 million in service revenue related to our ongoing promotion agreement of treprostinil injection with Sandoz. Expenses for the quarter were in line with our expectations as we fully transitioned into commercialization mode. Looking forward to the end of the year, we anticipate increases in quarterly R&D expenses as we continue ongoing label studies and prepare to initiate the pivotal study of L-606. SG&A expenses, after excluding non-cash and variable costs associated with treprostinil, should remain flat over the next few quarters. Our planned commercial spending supports the launch; but that said, any increase would be targeted to further accelerate YUTREPIA adoption. Lastly, with YUTREPIA approved, we are expanding our footprint in North Carolina and have signed a lease for additional manufacturing space to support continuing growth, potentially tripling our production capacity. Targeted for occupancy in 2026, this state-of-the-art facility will include production space to house additional print manufacturing lines and analytical labs to support additional YUTREPIA manufacturing. We are continuing to execute on our plan, and our cash position gives us the flexibility to keep moving forward with confidence. With that, I'll hand it back to Roger.

Thanks, Mike. In just over 2 months, YUTREPIA has delivered on every front with brand awareness growing, prescriptions rapidly escalating, payer access expanding, and clinical data maturing. With a clear and differentiated product profile, we are building a foundation, not just for a successful launch but for long-term leadership in the prostacyclin market. I would like to thank our entire team who like our product, are best-in-class. One final note before we begin the Q&A session. We plan to host an R&D Day in the fall where we will provide an update on our open-label L-606 study, which will include data for patients who have been on L-606 for up to a year. We are as excited about L-606 as we are about YUTREPIA, but today is a YUTREPIA stay in the spotlight plus L-606 to serve its own stage to properly highlight its own unique product profile. With that, operator, first question, please.

And now we're going to take our first question from Julian Harrison from BTIG.

Congratulations on the strong launch. These numbers are very impressive. We have three questions. First, on a weekly basis, has the growth generally appeared sequentially or was there a significant boost early on? Second, what is the mix between PAH and PH-ILD, along with the percentage of patients diagnosed with underlying IPF? Are you able to share those numbers now? Finally, regarding ASCENT, it was great to see the strong 6-minute walk data up to 16 weeks. Could you elaborate on your decision to emphasize the median 6-minute walk changes instead of the average? Why might the median changes be more suitable in this case, and how does this relate to the competitive landscape?

Great. Julian, thanks for the questions. So in terms of uptake, what we said in the script is that we've had accelerating uptake over time. So as we've been in the market, again, still just for 11 weeks, each week seems to be a little bit better than the one before. And we think that trend hopefully will continue, particularly as we continue to evolve the payer landscape and remove some of the things like new-to-market blocks that existed when you first launch drugs. So awareness is driving a lot of that. I think we had a focus on the centers of excellence, the key centers. And certainly, the adoption there has been rapid. I think the messages have been resonating very quickly, and that's the result of that, as you see that in the referrals and the script rate. We're not going to give the PAH versus PH-ILD split today. We want to make sure if we were to do that, that we had absolute clarity on what that is. And just because of the way some of that data has been collected, we can't really confirm exactly and precisely what the therapeutic split would be. And then for the ASCENT trial, yes, maybe I'll hand that over to Rajeev to talk about why we think median data is most appropriate and more reflective. But the simple answer is, and I'll give it to Rajeev, is that it minimizes the impact of outliers. So particularly in an open-label study, you really want to look at medians to give a more, I think, accurate and reflective results from a population that we've studied. So Rajeev, any other comment on that?

Yes, Roger, Julian, it's Rajeev here. I completely agree. I think it's less susceptible to being skewed by outliers or extreme values. It's important to provide the central tendency in these situations, especially with small samples. And I think it also is more akin to how larger data sets are usually conveyed. I will state that we will be showing more granular detail at the upcoming conference at PPN and in the upcoming conference in October. But I think we could say with a high degree of confidence that the mean and median values are fairly near each other. So I think that's really important to note as well.

Very helpful. All around, congrats again.

The question comes from the line of Ryan Deschner from Raymond James.

Congratulations on a strong start to your launch and the ASCENT results. What proportion of paid drugs is associated with the reported patient starts? And is this in line with your expectations? And what proportion of patient starts are switches from Tyvaso DPI or other inhaled or oral treprostinil products?

Yes. So Rajeev, Mike, if you wouldn't mind answering the paid drug question and Scott, our Chief Commercial Officer, you can talk about proportions as you can.

Yes, thanks, Roger. It's great to talk to you, Ryan. Regarding the proportion of paid versus free drug, as everyone knows, we have a couple of programs. We have a voucher program that offers the first 28 days of free drug for new patients. Additionally, we have a bridge program that provides one more 28-day supply at any point during a patient's treatment. In terms of the amount of paid versus free drug, particularly with the voucher program, it aligns with our expectations based on previous launches. Less than 50% of patients have utilized free voucher drugs. However, we aimed to give patients the chance to try our drug right away to determine if it suits them and to initiate the insurance adjudication process. We are very pleased with the services provided, particularly the market access services from Scott and his team, which have been quite beneficial for us.

Certainly. In terms of patients switching to our treatment versus those who are new to prostacyclin, our main focus has been on the new patients. Many patients currently dissatisfied with DPI or nebulized inhaled treatments are showing interest in our product. We've been surprised by the volume of these patients. While we won't disclose specific numbers, we are also observing some switches from oral prostacyclin. We will monitor this trend over time to understand its trajectory more clearly.

Great. And Scott, if you'll handle the second question.

And congrats on the launch as well. My question, thinking about the second half in these patients that have started on YUTREPIA, how should we think about the gross to net? Presumably, they've already kind of gone through their 28 days voucher. And so I'm just kind of curious like if those patients are going to flow through at full net or gross to net assumption that we should assume for those patients plus those that maybe convert from the prescription referral to a start. And that 75% conversion rate, the other 25% that haven't converted, is that just a function of time? Or is there anything structural or gating for those patients? Just trying to get a sense of what that process is like and the typical time from starting the prior authorization process to ensuring coverage.

Great. Thank you, Jason. Great questions. Mike, if you don't mind answering those questions.

Sorry. Regarding gross to net, we haven't discussed specific projections. Our main focus is ensuring that patients have the opportunity to choose YUTREPIA. As Roger mentioned earlier, there have been new market blocks, particularly where our competitors have contracted in the commercial sector. We have now signed contracts with all major commercial payers and anticipate that these new market blocks will soon be lifted. Consequently, we expect an increase in prescriptions subject to rebates as the year progresses. However, we remain confident in YUTREPIA's potential in this area and believe we will achieve equal access. Our primary goal has always been to ensure that patients have a choice, and I commend Scott and his team for their efforts in this regard. We look forward to further advancements in the second half of the year. In terms of the conversion rate, the patient support services we've implemented, which include reimbursement specialists to help navigate this process, are effective. Comparing to industry standards, we believe we have a strong percentage. As Roger mentioned, there were early challenges related to the new market blocks, but as these obstacles are removed, we expect that to accelerate progress as we approach the end of the year. We are committed to ensuring patients can make their choices, and we are confident in our ability to meet that goal.

And Mike, if I could just squeeze a follow-up and just any commentary regarding Symphony data on a go-forward basis? Should we look at it? Have you guys interrogated that and how we should interpret that on a go-forward basis?

Yes. So what I would say is, as is pretty standard in the industry, this information is usually not available. We obviously have seen the data like you have. I would not expect to see future data to come out, and we look forward to sharing our results as we go through each quarterly earnings call.

And the question comes from Cory Jubinville from LifeSci Capital.

Congrats on all the progress. It seems like traction has been really great so far. As we think about launch plans throughout the rest of the year, what kind of near-term levers are there to pull to accelerate growth? And again, given the traction you've seen so far, is the plan to kind of largely stay on course versus pull some of these levers? And you also mentioned that you've signed contracts with the three major commercial players. When do those contracts kick in and you start to get reimbursement through that?

Thank you for the question, Cory. I will address the second question first, and then Scott can provide insights on the launch plans and the actions we can take moving forward. We plan to adhere to our strategy in the upcoming quarters, as we believe the payer landscape will improve, which will serve as a driving force for us. Scott, could you discuss the potential actions we could take in relation to the launch?

Yes, sure. So the first thing I'd point out is that I think we have immense opportunity both from a breadth and for a depth standpoint to capitalize on. So to take, for example, the amount of breadth, I think we said 350 prescribers have prescribed thus far. But we've also said in the past that we have 6,500 targets across the country. So there's well over 6,000 out there who have not had the opportunity to use YUTREPIA, and from a breadth standpoint, we're just getting started. I mean, we've been pleased to have physicians with 1, 2, 3, 4, 5-plus patients, but many more of them can have that depth and will have that depth. From an activity sort of lever standpoint, I think one is just fuel the fire. We're going to continue to work with the centers on YUTREPIA. We have had community physicians for sure to prescribe, but we will now start to kind of work our way back out into the community to get PAH patients, but also to start to get PH-ILD patients. And then strictly from a tactical perspective, I mean, we'll be at all the major conferences. We'll be loved from an electronic standpoint. We still have a full suite of launch marketing that's going on right now and will certainly continue to go on for the rest of the year.

And Scott, I believe all of these activities will certainly benefit the brand. Regarding the strategies, I can identify five key areas. As Scott mentioned, we should continue to expand our network of prescribers, especially as we engage more with community centers. In this initial phase, our focus has been on major centers, but we anticipate acceleration through payer engagement and coverage. The third area involves capitalizing on the traction we’re gaining in switch opportunities, which allows us to share that experience more widely with prescribers so they can help their patients benefit from the transition. The fourth area should concentrate on the dosing flexibility of YUTREPIA to enhance therapy duration. Keeping patients on therapy is just as crucial as initiating treatment, and this will be a primary focus for our commercial strategy moving forward. Additionally, we need to start gathering initial data from oral transitions, especially for patients transitioning from TYVASO. We should also think about how to support doctors in this process. There are many strategies we can employ that will drive our future business, and I believe we have significant opportunities to advance our goals going forward.

Now we're going to take our next question and it comes from the line of Serge Belanger from Needham.

Congrats on a great start. Had some technical difficulties this morning. So apologies if you've covered this already. So first of all, on the $6.5 million, can you give us a split between channel inventory and patient demand? Secondly, regarding payer coverage, can you tell us where you're currently at and where you expect to be by the next quarter? And is the coverage similar to Tyvaso? I have another follow-up, but I'll start there.

Thank you, Serge. Mike, can you answer those questions, please?

Yes, thanks for your question, Serge. In terms of the revenue breakdown, I would say that during the first quarter of our launch, most of the revenue came from channel inventory. We began putting product into the channel in the first week of June and dosed our first patient shortly after. Due to timing, a significant portion of the initial revenue came from loading the channel. However, as we’ve seen an increase in patient numbers, we're now starting to see patient stacking as we progress into second prescriptions, and most of that has already been accounted for as we move into Q3. Regarding payer coverage, we want to ensure that patients have a choice and access to YUTREPIA. As mentioned earlier, we've signed contracts with three major commercial payers. We are confident that as new-to-market restrictions are lifted, YUTREPIA will be the preferred option due to its product profile, placing us in a situation that is competitive with United Therapeutics, ensuring that we are not at a disadvantage. With these developments, we are confident in our growth potential.

Yes. Thanks for the question, Serge. So as you know, a trial was held back at the end of June. At this point, all post-trial briefing is complete. The judge set a relatively accelerated post-trial briefing schedule. So post-trial briefing is now complete. As far as when we get a decision, it's always hard to predict how quickly courts are going to roll on things. I think in the first Hatch-Waxman trial in front of Judge Andrews, it was about 2.5 months between the completion of post-trial briefing and his decision. Obviously, here, he set an accelerated timeline for the post-trial briefing that could indicate that his decision will similarly be a little bit faster than the last time, but again, hard to predict with any degree of precision. And then finally, as to the potential outcomes, the same outcomes we've been talking about all along. Again, with litigations, we won't probabilitize what the outcome is going to be or try to get in front of the judge and guess how he's going to rule. But it's sort of the full range of these potential outcomes consistent with any Hatch-Waxman litigation. Thank you.

The question comes from the line of Tiago Fauth from Wells Fargo.

Let me just add my congratulations as well. A quick one for me. Just thinking about United's read-through. What are some of the implications potentially going forward, on the beta on orphan drug exclusivity? Any implications for your trajectory for the development path for L-606, basically how you guys are thinking about that if that trial reads out positively?

Thanks, Tiago. I'll take that. I think they've said they're expecting that result in September. So there's really no sense in me trying to predict what that trial result will or won't be. I think if they are successful, they will have some orphan protection for that for a period of time. So I think for us, it would be a matter of developing L-606 for that indication. So that once that orphan exclusivity expires, that we could benefit from that market too if they are to be successful. But we'll soon see where that lands.

Thank you. Dear speakers, there are no further questions for today. I would now like to hand the conference over to Roger Jeffs for any closing remarks.

Thank you, everyone, for joining today's call. We appreciate your enthusiasm for this initial phase of launch. We remain laser-focused on the execution in the back half of the year and look forward to driving continued uptake, expanding payer access, and laying the groundwork for our broader pipeline. And we look forward to speaking with you very soon, especially in the fall when we have our R&D Day for L-606. Thank you again.

This concludes today's conference call. Thank you for participating. You may now all disconnect. Have a nice day.