Good morning, and welcome to Liquidia Corporation First Quarter 2026 Financial Results and Corporate Update Conference Call. My name is Jonathan, and I will be your operator today. Please note that today's call is being recorded. And now I'd like to turn the call over to Jason Adair, Liquidia's Chief Business Officer. You may proceed.

Thank you, and good morning, everyone. It's my pleasure to welcome you to our first quarter 2026 financial results and corporate update call. Joining me today are Dr. Roger Jeffs, Chief Executive Officer; Michael Kaseta, Chief Operating Officer and Chief Financial Officer; Dr. Rajeev Saggar, Chief Medical Officer; Scott Moomaw, Chief Commercial Officer; and Rusty Schundler, our General Counsel. Before we begin, please note that today's discussion will include forward-looking statements, including statements regarding future results, product performance and ongoing clinical or commercial activities. These statements are subject to risks and uncertainties that may cause actual results to differ materially. For further information, please refer to our filings with the SEC, which are available on our website. Please also note that our earnings release and our commentary include non-GAAP financial measures. Reconciliations of these non-GAAP financial measures to the most comparable GAAP measures can be found in our earnings press release. With that, I'll turn the call over to Roger.

Thanks, Jason, and good morning, everyone. We're delighted to share our business results with you today. We'll keep our prepared remarks somewhat brief this morning as we'd like to allow as much time for questions as we can. Having said that, I'd like to share some bigger picture thoughts regarding the state of the business and allow the Q&A to serve as the time to delve into the specifics. Three full quarters into the commercial launch of YUTREPIA, I would summarize the state of our business with 3 main points. The first is that in the third full quarter on the market, YUTREPIA is now leading the growth of the inhaled prostacyclin category. YUTREPIA is well on its way to becoming the anchored inhaled therapy for patients with PAH and PH-ILD. As of April 30, we have received approximately 4,500 unique patient prescriptions and started approximately 3,750 patients on therapy since launch. And approximately 980 physicians have prescribed YUTREPIA since launch. This breadth of prescriptions is also complemented by increasing depth of prescriptions. For example, just since the end of February, the number of physicians who have prescribed YUTREPIA to 5 or more patients has grown 25% to approximately 270 physicians. What this clearly demonstrates is that physicians who try YUTREPIA are coming back to it for more and more of their patients. That is the pattern you see when a therapy is becoming foundational to a treatment paradigm, not when it is being trialed as an alternative and strongly suggests that YUTREPIA is already establishing itself as the best-in-class and first-in-choice inhaled therapy. This increasing breadth and depth of prescriptions is driven by a product profile that is setting a new bar for others to match, one where targeted pulmonary delivery minimizes off-target effects with a formulation technology that preferentially lessens upper airway intolerance while enhancing local effects on the alveolar capillary membrane. This allows for higher dose attainment and most importantly, better and more durable patient outcomes. The second main point is that we are purposefully and diligently broadening the opportunity in front of us by launching additional studies. We have started recruiting into Cohort B of the ASCENT study to transition inadequate responders from Tyvaso DPI to YUTREPIA in order to provide empiric evidence that higher doses of YUTREPIA are uniquely well tolerated and advantageous versus competitive alternatives. Additionally, we are actively screening patients in our pivotal Phase III RESPIRE study of L606, the most tolerable inhaled treprostinil study to date as evidenced by our 48-week data from the open-label U.S. study in PAH and PH-ILD patients. In addition, we are also advancing clinical programs to expand the role of inhaled prostacyclin into other serious pulmonary and vascular diseases such as IPF, PPF, PH-COPD and scleroderma-associated Raynaud's phenomenon. For all of these opportunities, mechanistic validation largely exists, the unmet need and high opportunity value remain. We believe the differentiated tolerability and dosing profiles of both YUTREPIA and L606 is foundational to that opportunity as it may support improved patient retention while also enabling higher therapeutic exposures over time. The through line of our clinical investment is that we have extraordinary and real potential to expand the franchise value of our portfolio by multiples in the years to come with therapies that reimagine what a best-in-class profile must be. The third main point is that we have established a profitable self-funded business in a remarkably short period of time. We have now delivered our third consecutive quarter of profitability with top line growing, bottom line growing and cash growing, which Mike will expand on shortly. What that gives us is the freedom to reinvest our own profits into the next phase of the company's growth. We are building new manufacturing capacity. We're advancing both YUTREPIA and L606 in a related array of clinical studies, and we are doing all of it from operating cash flow rather than via the capital markets. This is rare in our business, especially at this early stage of our commercial life cycle. To put it all in context, we could not be happier with where the business is today, and we are even more excited about where it is going. YUTREPIA has already exceeded $0.5 billion in annualized net revenue run rate in less than 1 full year on the market. Our clinical programs are fully funded by operating cash flow, and we have a clear line of sight to at least $1 billion in net revenue in 2027 with multiple growth opportunities to sustain further growth well into the future. And what gives us confidence in achieving our ambitions is that the engine that gets us there is already up and running flawlessly. With that, I'll turn it over to Mike to walk you through the financials.

Thank you, Roger, and good morning, everyone. As Roger has indicated, the first quarter is a continuation of the story that we discussed in March, sustained patient growth and disciplined execution. Net product sales of YUTREPIA were $129.9 million in the first quarter of 2026, up from $90.1 million in the fourth quarter of 2025, representing 44% sequential growth in net product sales. The first quarter also marked our third consecutive quarter of increasing profitability and the growth from quarter-to-quarter is striking. Net income was approximately $52.9 million, up from $14.6 million in the fourth quarter of 2025. Non-GAAP adjusted EBITDA was approximately $71.2 million, up from $27.3 million. We almost tripled our EBITDA profitability from Q4 to Q1. We've achieved this increase in profitability while continuing to invest more heavily into the commercial organization through our sales force expansion and expanding our manufacturing capacity and footprint in North Carolina and in our clinical development programs. We ended the quarter with approximately $222.8 million in cash and cash equivalents, an increase of $32.1 million from year-end. So in addition to growing the top line, we continue to grow the balance sheet that funds our priorities and are confident in our ability to remain profitable in the future. Roger, back to you.

Thanks, Mike. As we close out our third quarter on the market, what stands out to me is how much we have built in such a short period of time, a product that is leading the growth of the inhaled prostacyclin category in PAH and PH-ILD, a pipeline with multiple paths to extend the franchise well beyond where it stands today and a self-funded business with the freedom to invest in its own future. We have never been more confident in where this company is headed based on the robust momentum we continue to see in this business. With that, operator, please open the line for questions.

Our first question comes from the line of Amy Li from Jefferies.

Excellent. Congrats on the amazing progress. Based on our math, it looks like you're seeing a slight acceleration of unique scripts and patient adds as well as an improvement in script to start in March and April. Can you give us a sense of what current growth is being driven by in terms of PAH versus PH-ILD, new patients or switches, academic or community and any other relevant metrics? And then just a quick follow-up. Do you see any read across from the Hikma versus Amarin Supreme Court case to the 327 litigation?

Amy, thanks for the question. So there has been a slight acceleration in referrals and patient starts. But I'd say largely, things are sustained and consistent. We don't want to forecast accelerating growth here. I think if we sustain the growth that we've seen since the beginning of launch and you just take that as your average, I think everything we've predicted around 2027 being $1 billion in net revenues still holds true for us. I think where we're seeing robust growth is, as we sort of highlighted in the script is that is in the depth of prescriptions. So we are gaining more prescribers, and we're just getting them to trial the drug. And certainly, as they get to 2, 3, 4 and 5 starts, then you start to see sort of this almost trigger change where they just begin using YUTREPIA preferentially. And I think the product profile is speaking for itself. It is redefining kind of what is required for a prostacyclin therapy. You need one that's direct to the site of injury. So it has to be to the lung. It has to minimize lung intolerance as well as off-target effects, which the PRINT formulation certainly does. And then because tolerability and dosing are inextricably linked, it allows for higher dosing, which allows for better outcomes. So when you have that type of product profile and sites have their own "critical mass" of trialing the drug, it quickly then becomes the preferred therapy at centers. And that's what we're seeing. We're certainly driving all of the growth in the space currently. If you sort of aggregate our revenue and our competitor revenue over the quarter, the market grew about 5%, and we were responsible for all of that growth, which we're quite pleased about. And I think it speaks for itself about what the leading therapy is. We still see equal scripting between PAH and PH-ILD. The pull-through still remains around 85%, which is extraordinarily good. And the naive and transitions are, again, about 75-25 as it has been before. So it's a bit more of the little engine that could, doing all that it has from day 1 and sustaining that trajectory. And then Rusty, maybe you could talk to sort of thinking around Hikma and if there's any read-through from that case.

Sure. Thanks, Roger, and thanks for the question, Amy. If you look at the Hikma case, including the briefing and oral argument, it is fundamentally about what is necessary to show induced infringement. That's also the issue in our case for at least four of the six claims where the parties are contesting therapeutics patents. If you consider some of the conduct that arose in the Hikma proceedings, there are clear parallels to the conduct United Therapeutics cited in our case. So there are certainly similarities. Whether or how Hikma will be decided, whether it will affect Judge Andrews' decision, or whether it will affect the timing of that decision would be pure speculation, and it's not something we're going to address. Based on what we know today, there are parallels between the cases, but it's difficult to comment beyond that.

Yes. And I think I would add, look, we remain very confident in the arguments that we made in the case, and are bullish on the outcome of the opinion when it's rendered. And I think if there's any read-through from Hikma, we also feel that potentially would go in our favor as well.

And our next question comes from the line of Ryan Deschner from Raymond James.

Congrats on another really strong quarter. By my math, the YUTREPIA launch has now eclipsed the early launch trajectory for your competitor. In terms of net sales, what does the current split between prescribers in major centers and smaller community prescribers look like? And how has this evolved thus far for the launch? And then I have a follow-up.

Yes. We're fortunate to have Scott Moomaw, our Chief Commercial Officer on. So Scott, if you wouldn't mind responding to that question.

Yes. Thanks. So as you would expect, and as we mentioned on earlier calls, the centers were jumping in early as they had those patients, they are prevalent and ready to go. And they continue to be a mainstay, although I will say we have centers that are coming on even still now, whether they would be late adopters or they're starting to see those patients back after 6 months and starting to see the results of YUTREPIA. Having said that, we are having more success in the community, whether that be physicians who have used a PAH drug before or even some physicians who are ILD prescribers with the antifibrotics, but who are ready to try a prostacyclin. So the balance is definitely changing a bit more towards what we call the community, but the centers are still the largest cohort. And of course, they actually are still growing as well.

Great. Thanks, Scott. I would add that, while anecdotal, one of the favorite feedback stories we keep hearing is that the competitor product had been on the market for years and they counter-detailed us strongly. When we went to centers, some physicians said they thought the drugs were more alike than different. But after they began prescribing YUTREPIA, they reported a night and day difference, particularly in terms of cough and the ability to titrate and drive outcomes. Those stories resonate with me. I think it's very hard to beat a better product profile, and that's what YUTREPIA provides.

And our next question comes from the line of Serge Belanger from Needham.

Roger, we're coming up on the 1-year anniversary of FDA approval of YUTREPIA. So you've been on the market for close to a year now. How large do you think the PH-ILD opportunity currently stands at? And how large do you think it could be? And then one question for Mike. I noticed you're now an income taxpayer of the company. Just curious if this is a one-off or you expect to continue being paying income taxes going forward and at what rate?

Thanks, Serge. I'll take the first question around PH-ILD. So if you aggregate just the inhaled treprostinil market today in real dollars, it's about $2 billion. And that seems to be split somewhat evenly between PAH and PH-ILD, at least for us. So clearly, the PH-ILD market is massively underpenetrated. I think we're driving awareness. I think our competitors are driving awareness. So I think there's going to be a rising tide phenomenon for that. Our belief is that's well in excess of $2 billion to $3 billion on its own in PH-ILD. And then don't forget with the oral prostacyclins, if you assign $1 billion in today revenue value, the oral market there is $2 billion in value. So there's another $3 billion. So just across PAH and PH-ILD, there's a potential, again, with clear line of sight without a lot of exaggeration or hyperbole to $6 billion in revenue. So a lot more runway here for us to continue to grow this franchise significantly. And certainly, as we begin to develop L606, which we're actively recruiting, we've had patients in screening already that's the next-gen molecule that can further open up access to these markets. So again, very pleased with where we are today, but excited about where we're going to go tomorrow as well. And maybe, Mike, I'll turn it over to you for the tax question.

Yes. Thanks, Roger, and thanks for the question, Serge. As you saw, we did record income tax expense in Q1. As Roger has said in the prepared remarks, we're growing profitability. We're growing at a quick pace. We would expect to continue to show income tax expense as we move forward. As we've been saying since launch, and we'll continue to say, our goal is to obviously grow sales but also grow profitability and reinvest some of that profitability into the business. So the expectation is that we will have increasing net income and adjusted EBITDA as we move forward. And correspondingly, we'll have additional income tax expense.

And our next question comes from the line of Julian Harrison from BTIG.

Let me add my congratulations on all the recent progress. Two for me. First, are you seeing any emerging trends among patients switching to YUTREPIA from other therapies? Has there been acceleration on that front at all? And what is the most common product you're seeing switching from at this point? And then second, thinking a little bit more about your $1 billion revenue by 2027 guidance that you announced earlier this year, is there a chance you could achieve that on a run rate basis before 2027? Any thoughts there?

So in terms of trends in switching, maybe I'll ask Rajeev to talk about that from his observations when he's been out in the field talking to docs. And then also maybe, Rajeev, if you could speak to the studies that we're doing to direct patients from other prostacyclins to YUTREPIA as well. And then, Mike, if you'll not answer the question on run rate, your best question to answer for Julian that you can when you get there. So Rajeev?

Thanks, Roger. Thanks, Julian, for the question. So I think what is clear is that I've said this before: the community and the centers alike are experiencing an inhaled renaissance, and that is being led by YUTREPIA's product profile. Roger highlighted the tolerability of our PRINT formulation, which has allowed us to dose higher. In our ASCENT cohort, especially in PH-ILD, escalating doses every eight weeks has produced notable improvements in exercise capacity—distances and changes we haven't seen before. Practitioners we speak with have realized that, given the wide array of options now available in both Group 1 and Group 3, we are moving toward treatments that not only help patients feel better, walk farther, and live longer, but do so with much better tolerability. The use of pumps and oral prostacyclins, which often have significant gastrointestinal intolerability, has caused the market to view YUTREPIA differently. In particular, among practitioners using oral prostacyclins, we've seen a large switch to YUTREPIA. Although the pharmacokinetics differ, the ability to dose YUTREPIA at 1.5 to three times the traditional inhaled treprostinil dose has opened eyes. Some argue it's four times a day, and that's correct, but inhaled administration delivers the drug directly to the lungs and can significantly reduce many off-target systemic side effects that are common with oral prostacyclins regardless of dosing frequency. With sotatercept entering the treatment landscape, many practitioners are asking why patients should remain on parenteral therapy and pumps when they can be transitioned to YUTREPIA. I expect abstracts at ATS will highlight YUTREPIA's utility in combination with sotatercept. From a company perspective, we need to continue to generate data and show physicians how to do this in trials. We have started recruiting into ASCENT cohort B, which enrolls patients inadequately responsive to either Tyvaso nebulizer or Tyvaso DPI and transitions them to YUTREPIA. We also plan soon to initiate transitioning patients from oral selexipag to open-label YUTREPIA, a step we are taking because of what we're seeing in the community. Finally, we need to provide guidance on transitioning patients off parenteral therapy and pumps to YUTREPIA, including those on sotatercept. We hope to initiate that study sometime in 2026 or 2027. I hope that answers your question, Julian.

And Mike, if you'll talk about the run rate.

Yes. So just to take a step back, and thanks for the question, Julian. Just looking back from Q3 to Q4 and Q4 to Q1, we showed from a revenue share in inhaled prostacyclins, we've gone from Q3 of a 10% market share to Q4 at about a little over 16%. And in Q1 of '26, we've grown that to almost 23%. All while the market grew in Q4 and Q1 each by 5%. And this is in spite of the supposed terrible weather in the winter months here in Q4 and Q1. So I think what we've shown is nothing short of amazing in terms of that growth. We see continued growth as we move forward. As Roger talked about, the opportunities in both PAH and PH-ILD, we think are massive. We have a tremendous amount of momentum. We have a best-in-class product. We have a best-in-class commercial organization and medical affairs organization. And we have nothing but confidence as we move forward here. We're not going to talk about run rate as we get towards the back end of the year. Roger talked about at least $1 billion in 2027. But we feel that we have a tremendous amount of momentum that we will continue to build on as we move through the rest of 2026.

And our next question comes from the line of Ben Burnett from Wells Fargo.

I wanted to ask about L606 and expectations for Phase III. Based on Phase II or the open-label study, I think patients were able to get up to about 229 micrograms. That's, I guess, the median. What are your expectations for the dose that's achievable in Phase III?

So thanks for the question. Again, over to Rajeev for that.

Yes, Ben, thanks for the question. To reacclimate the audience, L606 is our treprostinil liposome inhalation suspension that is delivered twice a day. One thing YUTREPIA cannot address is the need for four-times-a-day dosing, and we are confident L606 will be able to achieve a robust result. We're studying this in the setting of PH-ILD and anticipate the first patient will be enrolled imminently. In the open-label study, what we highlighted was our construct that if you can deliver this twice a day, you can sustain treprostinil pharmacokinetics not only during the day but at night as well. So when you do a 6-minute walk test, we do not expect to see a notable difference between trough and peak. That's important because when patients wake up they should feel as good as they did the day before when they're walking around. In terms of dosing, what we have learned with YUTREPIA is that we need to continue to provide individualized dosing. We should be able to titrate to the maximum effective dose that patients can tolerate and clinically need. Some patients will require lower doses based on their response. The jury is still out, but what is clear is that the way we've designed our dose levels allows significant titratability to levels we have also achieved with YUTREPIA if we use comparable dose-level effects.

And our next question comes from the line of Jason Gerberry from Bank of America.

This is Melanie on for Jason. Going back to the PH-ILD market opportunity, assuming no change to the market indication statement, can you talk about the challenges and opportunities with opening up that market opportunity? I know you talked about market penetration already, but how penetrated is that market currently with inhaled treprostinil? And is the hurdle for the market education and improved diagnosis?

Great. So Scott, maybe you could take the answer on kind of what our expectations are in PH-ILD and where we are today.

Yes. We initially saw PH-ILD as a smaller portion of patients because that market has been a slower burn, but it’s now roughly balanced at about 50-50. The overall market is still around 60,000 patients, so there is substantial room to grow. With two companies educating the market and working on awareness, diagnosis, and treatment, that should lift the whole market. One reason we’re expanding the sales force over the next few months is to reach farther into the community, where pulmonologists treat ILD patients but often do not consider whether those patients have pulmonary hypertension. They may prescribe antifibrotics and move on. There’s an opportunity to engage these physicians, make them aware of PH-ILD, explain how severe it is and its mortality, and ask them to look for it and either treat or refer patients to a center. Many patients remain out in the community, so by expanding our sales force we believe there is still a great deal of opportunity.

Yes. And the other thing I would add, there's recent registry type data that's coming out that's showing that 50% to 75% of these patients actually have a PH component to their ILD. So really, as Scott said, it's driving awareness and getting them to refer to a cath lab to do a definitive right heart cath, so that they can then have the authorization to get scripted for a drug that can help them. So a lot of it is driving the disease awareness, driving the PAH incidents within that the ILD population. So there's sort of an expectation that it's actually there rather than not there. And then finally, either they're going to learn to treat or they're going to learn to refer and what the best referral network is for them. So that's what we're doing. And that's, as Scott said, one of the reasons we scaled the sales force significantly.

And our next question comes from the line of Gaurav Maini from LifeSci Capital.

I guess any more color you can give on the potential expansion opportunity for YUTREPIA in PH-COPD? Of course, this is a pretty wide open indication, but any color here on how the team is thinking about this would be helpful.

Yes, I'll start. We think there's a clear opportunity here. Part of what will drive the value of capturing that opportunity is doing a study that is enriched for success. At ATS, for example, we'll have steering committee meetings with luminaries in the space to discuss, if we're going to study this disease, what is the best sample of patients to include. If we get that right, we all know that treprostinil will improve the PAH component of the disease, and that obviously would benefit outcomes for patients with PH-COPD. We'll focus our time and attention on making sure we get the inclusion and exclusion criteria right. Then we'll design a protocol, using all our experience, that we think will be enriched for success, and then we'll take it to goal. That's where we are with the program. It won't get going until 2027 at best. More to come on that, but I appreciate the question. It's a massive opportunity, in excess of $4 billion or more on its own.

This does conclude the question-and-answer session of today's program. I'd like to hand the program back to Dr. Roger Jeffs for any further remarks.

Yes. Thank you, operator, and thank you, everybody, for joining us. I think I'd just leave you with what we're really excited about where the business is headed. I think we're going to focus on 4 key areas. One is the continued success in the launch of YUTREPIA and its growth, doing market support studies to cement our position for YUTREPIA as the anchoring prostacyclin in the market, both for transitions from inhaled and oral, looking at synergies with sotatercept. We're also going to focus on L606 advancement and get that to the goal as soon as we can. And then as we just answered the question around evolving broader indications such as IPF, PPF, PH-COPD and Raynaud's so that we can expand this business by multiples and not percents. So again, thank you, everyone, for your time and attention today. We look forward to speaking to you at conferences in the coming future.

Thank you, ladies and gentlemen, for your participation in today's conference. This does conclude the program. You may now disconnect. Good day.