Conference Transcript - LQDA 2026-09-08

Speaker 4

we have uh mike cassetta cfo and jason adair chief business officer thank you all for doing this hey thanks for having us been morning ben why don't we just kick this off and just start by giving us a quick overview of liquidia and kind of the near-term sort of events that we should be focused on yeah ben really appreciate you having us um it's a really exciting time for liquidia our first product launch utrepia has gone off to a uh a very important start for us uh in just in In Q2 alone, we recorded $170 million of revenue, all while increasing our profitability quarter on quarter. We launched this product back in May of 2025. We've had a rapid uptake. We've been on a linear curve of patient additions and feel that we are taking a disproportionate share of new patient starts in the space in both PAH and PHILD. So we're very excited for where we're going. this is a very important time for these patients that have suffered for a long time to be able to have a product that has the tolerability profile and ease of use profile that that really helps and ultimately allows us to look at other opportunities where we are now pursuing our next generation product l606 where we've launched our phase three placebo control trial in PHILD, enrolled our first patient in Q2, and looking forward where this time next year we'll have between eight and ten clinical trials in place across a variety of disease states, both open label phase four studies and also potentially two additional registrational studies in PHCOPD and systemic sclerosis with Raynaud's phenomenon. So we've created a tremendous amount of value ready. But we feel like we're really just scratching the surface here of of of being able to do much more while, you know, increasing sales in of Utreppia, increasing profitability and reinvesting that part of that profitability back into our pipeline. So it's a it's a great time for liquidity, and we're really looking forward to the future here.

Ben, Analyst — Jefferies

Okay, fantastic. Why don't we start with you, Cherpiea in the ongoing launch?

Speaker 2

And maybe we can kind of start on the adoption side. you've seen some strong adoption over the last couple quarters going forward where you see that kind of adoption curve and ramp going yeah so I like we said every metric that we've tracked at the launch has has been ultra successful in both PAH and PHILD what we've seen since the launch we've really seen an even split of of of scripts in both PAH and PHILD we're seeing about 75% of our scripts are coming from naive patients, which is really market-growing scripts, which we're very excited about, and 25% are coming from switch from other prostacyclines like Tyveso, Tyveso, DPI, remodulin, and oral prostacyclines. So as we look forward to the rest of the year and beyond, you know, as I said, we are at $170 million of revenue in Q2. We've, for the last three quarters, grown $40 million revenue each quarter. We see that continuing, and our goal and our plan is to be on a billion-dollar run rate of $250 million by Q4 of 2025. So, you know, the opportunity in PHILD, I think we've talked about this time and again, that, you know, this is still a relatively underpenetrated disease state that we believe is probably penetrated less than 20%. So there is still a tremendous amount of white space for us to pursue there. We've increased the size of our sales force in the last quarter by 33% to help, you know, to help penetrate that area, especially in the local community setting. But then in PAH, we think there's an equal opportunity, you know, through new patients, but also we're very interested in in switches of oral process cyclones. There's over 10,000 patients that are on oral process cyclones. Currently, we feel the flexibility of the product profile of utopia is is very conducive to switch those patients. We're about to enroll a a a open label study in process. I'm sorry, oral process like switch patients, which we're very excited about and hope to have data in the first half of 2027 on that. So, you know, while, you know, the early launch has been extremely successful, we feel like, you know, there's still tremendous opportunity to grow and grow for the foreseeable future here.

Ben, Analyst — Jefferies

Okay, that's great. And maybe could you talk about, now that you have multiple quarters kind of under the belt, what has been sort of the physician feedback and sort of why are you seeing kind of the adoption in those kind of segments that you saw, the new patients and the switches?

Speaker 2

Yeah, I mean, I think, you know, for years, you know, there's, especially in PHILD, only Tyveso and Tyveso DPI were available for patients. I think what Utropia brings is a differentiated product profile that provides, you know, know dosing flexibility to allow patients to titrate to to higher doses our print formulation which is really the cornerstone of what our differentiation is where we we manufacture particles of of uniform size and shape that were specifically designed to you know bypass the the back of the throat and the upper upper airways to achieve deep lung deposition our ability to titrate to the to those high doses we feel is critically important and and what we've seen we we had launched in 2024, a study called Ascent, which was an open-label study in PHILD, where the goal was to take patients, PHILD patients, and start them in utropia and try to titrate them to higher doses in a very short period of time. And what we saw in that was very telling. Our drug, you know, the target dose of Tyveso has always been between 9 and 12 breaths of Tyveso. What we were able to do with Ascent is show that you can get to high doses in that relatively short amount of time. So we really measured at eight weeks, at 16 weeks, and 24 weeks. And at eight weeks, we were able to get to the equivalent on average of 15 breaths of Taviso and achieve a 21-meter walk improvement. At 16 weeks, we were able to get to the equivalent of 18 breaths of Taviso and saw a 31-meter improvement. And at 24 weeks, we were able to get to the equivalent of 21 breaths and see a 41-meter improvement. All while cough, which was at the time of initiation, was really deemed as more of a minor transient cough. That cough stayed the same, even though we were getting up to that 21 breaths. So the feedback we're getting from doctors is really the consensus is unanimous here that we offer a profile that is easy to take, dry powder inhaled, And we're able to titrate to higher doses, which we think has been a welcome addition to the treatment paradigm for these patients in both PAH and PHLD.

Ben, Analyst — Jefferies

And going back to some of those other comments, when you were talking about kind of the forward-looking sort of growth rate, do you see that growth being different in PAH or PHLD? And maybe could you just kind of talk about kind of the, what is your kind of current thinking on the commercial opportunity in those two categories?

Speaker 2

Yeah, I mean, I think, you know, as I said earlier, you know, our split has remained, you know, extremely consistent. since launch against ph and phild now if you look at the overall market if you back out and you look at the overall market opportunity i think if you look at phild you know we've said we believe that you know that addressable market could be 60 000 patients or more as we've you know all learned it relatively under penetrated so i think if you think about it long term in phild the long-term opportunity in phild is is definitely larger um you know we've we've said previously that we think that could be a three four five billion dollar uh market opportunity which was again part of the reason that we've we've increased the size of our sales force you know these patients a lot of these patients are sitting in local community settings um you know where the you know the first product approved in phild was back in 2021 so it's still relatively under diagnosed um you know working very closely with doctors to help them identify patients diagnose patients and ultimately either treat patients or refer those patients to the academic centers so if we think about long term i think the phild opportunity is is is very very large um the ph opportunity is is a different opportunity in the sense that it's a mature market um you know if you if you take the oral prostacycline market the inhaled prostacycline market and the perennial market that market is well over three billion dollars right now we believe that we have access to that entire market as we move forward as i said we're doing a study in in oral switches we are going to do a study that we plan to kick off in 2027 that shows a patient that is on win rivera that we can move from perennial treatment onto eutropia you know the these doctors these physicians these patients want to see data and that's that's what we are pushing towards to generate as much data as we can in both ph and phild you know so while the long-term opportunity in phild i think is is probably larger i think you know the short to medium term opportunity in in ph is still massive and and could easily be in excess of two billion dollars okay that's awesome and and we think about like the most important kind of patient segment at least near term is it that is it the treatment uh prostacycline naive category that's sort of the driving the most growth yeah so what i'd say is those prostacycline naive patients which you know as i said are is representing about 75 percent of our of our new patient scripts um new patient starts um you know that's that's i believe that's going to be the larger opportunity you know in pah and especially in phild these these patients are churning a lot a lot of new patients are coming into into the system every year um those those scripts ultimately will be market growing opportunities and and you know so So, you know, I would expect as we move forward to maintain that, you know, that ratio of 75-25. But, you know, the overall opportunity in PAH, in PHILD, naive switch patients, I think is going to allow us to sustain the growth that we've been on, you know, really since the launch.

Ben, Analyst — Jefferies

Okay, excellent. And maybe thinking about the sort of the price side. Net pricing kind of long term kind of where do you see those those discounts kind of leveling up?

Speaker 2

Yeah. So we you know we've we've not disclosed our specific GTN. You know I think where we have been we feel very comfortable where we are. You know one of our goals at launch was to make sure that patients have an opportunity to choose choose Utrapia if they want to. And in order to achieve that we needed to make sure that we were not disadvantaged at all with payers. We have an amazing market access team. And what I'd say where we sit here now in September of 26 is we are at parity. We are not disadvantaged whatsoever. We're very comfortable with where we sit. We feel a combination of that along with what we feel is a better product profile really positions us well for future growth. What I would say is we move forward. We believe that, you know, from a pricing point of view, we feel very comfortable. you know I think like most products you could see a slight erosion in price as years go by but I don't see anything significant and feel very confident where we are.

Ben, Analyst — Jefferies

Okay excellent you know and I think we've kind of been waiting on a sort of day-by-day basis for this legal update for what feels like over a year now I think it is over a year.

Speaker 2

14 months.

Ben, Analyst — Jefferies

Who's counting?

Speaker 2

Yeah I you know and I understand this is a hard thing to kind of speak to specifically but what can you say about this and I guess in a lose scenario how should we think about that I mean what what I would say is what we're focused on is the here now and focus on commercial execution focused on on our pipeline and all of the studies that we talked about earlier you know we can only control what we can control and right now we have our plates full with with you know servicing these ph and ph ld patients which we will continue to do unless we're told otherwise you know the situation on legal like you said it's you know the trial was in june of 2025 um you know we've we said publicly this time last year on this stage uh with you that we are expecting a a ruling any time um and we're now sitting here a year later so um you know we don't know when it's coming um it is what i will say like any good management team any good company we will be prepared for any scenario that is put in front of us. We believe that we should win this case but there are no guarantees whatever that decision is we will be prepared we will be prepared to act quickly because again what's most important is that you know patients are treated fairly we want to make sure that there is no disruption again we believe we should we should win the case but we will be prepared for any outcome and and and we'll be prepared to act quickly okay excellent you know i think another interesting story this sort of played out over time is we've seen kind of this pah ild you know use case retroposional expand so i kind of want to go through some of these different expansion opportunities kind of one by one but but starting with sort of the ipf and the ppf

Speaker 1

opportunities how do you see those markets and how do you get into those markets you're right ben it's exciting time when we started this program in 2016 it was hard to convince any investors that inhaled triprostanol was going to matter and luckily we put utropia into the clinic and we're now in the market and at the same time the investment community has seen what the medical community sees which is what drives the best use of triprostanol or process cyclin is the local delivery right so can we get to higher exposures in the most tolerable way in the convenient manner so if you can optimize those first two for dose range and tolerability there's new indications that can be available in the future one of those is IPF or PPF progressing pulmonary fibrosis and what we see in the data that's been published is clearly a signal that there's a benefit to patients but if you go back to that equation about exposure and tolerability eutrepia shown that we can dose very high in a tolerable way so the next step for liquidia is to do an open label study in PPF and IPF patients to look at that exact question like ascent phild patients which included ipf patients can we dose to higher levels and if we can can we get better efficacy in a tolerable way so if we can show that in an open label study then we can take that knowledge into our clinical development plan either for l606 or eutrepia but we need to prove the hypothesis first that dose matters we believe that it does as it has in every other indication that it's been studied in so we don't want to make any promises about what that looks like in the future but you you should know about liquidia we're always going to do the right science right we're going to make decisions that are informed by data and we're looking forward to that data okay excellent that that study will give you information on both ipf and ppf correct okay excellent and then another study uh that i think you talked about recently is is in ph copd uh talk about that opportunity i guess first of all how big is that commercial opportunity? Yeah, it's pH COPD is very attractive. We know that it's been studied in the past with inhaled triprostanol. The challenge with COPD, you know, millions of patients, if you have pH on top of the COPD, it can be lethal depending on the level of pH that you have. So there is a go deep registry where there's information that indicates that if you have a PVR above five, that your three-year survival rate is less than 20%. So, the challenge for the study is to define the level of COPD in a way that doesn't complicate the interpretation of the effect on pH. So, the balancing act is designing the inclusion and exclusion criteria appropriately, and our chief medical officer, Dr. Rajiv Sagar, has been working on this extensively over the last year. And we feel really confident about the trial design that we're working on. So the intent is to start that trial at the end of 27. It's a big lift going quickly. We do have the benefit of some learnings from the past study. And again, it's really defining the clinical trial appropriately. We believe in the mechanism, right? We know that inhaled troposinol treats pulmonary hypertension. So now the question is, how do you design a trial to give you the cleanest read on that signal? In terms of total population, as we think about defining it, it could be upwards of 300,000 patients in the United States.

Ben, Analyst — Jefferies

Okay. That's great perspective. And then I also wanted to ask about Renaud's phenomenon associated with systemic sclerosis. What is the, what's the hypothesis there for terpossomil?

Speaker 1

Again, we're benefiting from previous studies that have looked at prostacyclines in this disease. So specifically scleroderma, right, rare disease. um patients with a tissue-based disease we're looking at ray nodes which is the one of the most common um i don't want to call it side effects but one of the most common phenomenon that these patients have like 90 of scleroderma patients have uh secondary ray nodes so the theory is that with a potent vasodilator that you can get to levels that can expand uh or make the blood flow better in the digits, right? Especially when we think about the fingers. And so the issue has been this exposure tolerability equation. And we know that with inhaled deprosanol, we can get to high levels in a tolerable way. So the study that we're going to kick off in the next month is going to be looking at that dose finding, right? Can we get to a dose where we believe that we can affect or drive exposure into the digits that have an effect potentially on the attack rate? So when we move forward from that study it will go directly into a pivotal it's a quick study so we're going to start it this year the phase two dose finding will be done in the beginning of next year and if it's positive and we have a good dose response we'll take that right into a pivotal study at the end of next year so it's a very quick study one of the reasons that we're confident is if you just look in europe infused iliprost another potent process cycling analog is currently used to treat patients with renotes but that's a very cumbersome and painful product to deliver so again we believe high dose exposure with utropia in a tolerable way might get us to similar levels that's more attractive for patients to

Ben, Analyst — Jefferies

dose in the United States okay actually it's a data you're saying first half of next year or something potentially next year the phase 2 study that we're gonna kick off we'll have that in the first half of next year okay okay great well So, I want to spend a little bit of time also talking about L606. I guess, what is the advantage of L606 relative to Eutrapia, in your view?

Speaker 1

So, again, we go back to that kind of equation. Exposure drives efficacy. Tolerability drives durability. And then convenience drives compliance. So, when we found L606 from our partner, Formosa, in Taiwan, what they were working on is the tolerability component, right? because when you look at 30 years of development here, tolerability has driven a lot of the innovation. So what we see that L606 brings from Eutrepea is not the exposure. Eutrepea is achieving very similar exposures to what L606 can do, but the tolerability profile of L606 is vastly improved. It's a liposome, so treprosanol, a known topical irritant, is protected on the inside of that liposome. So as a patient inhales that twice a day with a nebulizer, is really shielding the upper airway. And so that tolerability profile showed up in our open-label study in the U.S., where if you look at cough, which is a signal that people pay attention to, at 48 weeks, we saw 14% of patients reporting a drug-related cough. At levels that would be equivalent to the median dose was above 19 breaths per session comparable to Tibasa. So I know I just threw some numbers out there.

Ben, Analyst — Jefferies

Yeah, walk us through that, Matt.

Speaker 1

Yeah, I know we've talked about this. With all of the competing products, it's starting to get hard to compare exposure and tolerability. So the best way that we talk about it is comparable doses of Tyveso, right? Tyveso nebulized has been in the market for over 15 years. The medical community is thinking about dose titration as breaths per session, with the target of being 9 to 12 breaths per session. So when we look at Eutrepea dosing and L606 dosing, we calculate what the comparable dose is relative to that standard. And what we've seen in Eutrepea and L606 is that we can achieve levels that are two and three times as high as that target Tyveso dose. So when you ask me a question of what's the median dose that we saw in our 48-week study of L606, The median dose was comparable to 19 breaths per session four times a day, but we're doing that in two sessions, one in the morning and one at night. So it's not just that the exposure is higher, it's that we're also smoothing out that exposure over 24 hours. So if you believe that the parenteral is the most effective way of delivering a process cyclone analog, then delivering that second dose right before the patient goes to sleep ensures that you're treating the disease while they sleep. You're also bringing C-Max down, right, with two different doses and spreading out that AUC over 24 hours. So we believe that that twice-daily dosing with the liposome is the reason that we're seeing a better tolerability profile. And we're encouraged that most patients could titrate to very high doses. And I think we actually had 21% of patients above a dose that would be comparable to 30 breaths per session of type Aso nebulized.

Ben, Analyst — Jefferies

Okay, that's super interesting. And I think you kind of spoke to this, but I guess what matters the most? Is it CMAX? Is it AUC? And I guess I'm kind of asking this in the context of some of these kind of QD formulations that are in the works with a couple of competitors.

Speaker 1

Again, so when we think about parenteral, which was the first form, You know, it was exposure over 24 hours, right, that drove it. And everything since then has been this optimization question of tolerability and efficacy. So we think it's AUC, and we're going to have to demonstrate that in a clinical study. That's our RESPIRE study, a placebo-controlled study. But we already know from our open-label study that patients are effectively treating their disease with this twice-daily exposure. That is with a seven times reduced C-max when we compare it to the nine-breast per session. when it comes to the other qd formulations you know ultimately the clinical data will tell us what is what is best but if you believe in the hypothesis that more continuous exposure over 24 hours is what can drive efficacy then at least l606 has a chance to further improve efficacy we don't have to do that for approval we just have to run an open label excuse me a placebo controlled study to show that we don't lose the efficacy that's known with the inhaled route. But is there a potential to improve it? We'll have to wait and see. We know that patients like our product since most patients have stayed on drug in that open-label study.

Ben, Analyst — Jefferies

So to that point, can you talk about what is the right development path for L606?

Speaker 1

We have the benefit of designing a program to take advantage of the decades of experience of prostacyclines with terprosinol in the different routes. So when we went to the agency, we went with that full data package. So really what our design is now is to prove that we don't lose any efficacy in a twice daily formulation since we have changed the PK. But the benefit of the history can all be applied in the package itself.

Ben, Analyst — Jefferies

Okay.

Speaker 1

I guess is it fair to assume that where we see kind of utrepia gaining traction and showing success will l606 kind of follow in those footsteps i mean that's the right way to think about it you know we believe in the inhaled route for process cyclin so wherever inhaled process cyclin goes is an opportunity for l606 it becomes a sequencing issue for the business right as we think about what trials to do with utrepia versus l606 so currently our focus is use l606 get it you know moving forward in pah and phild The Respire study is a single study in PHILD, but the FDA has indicated we can get both indications with that study, given the history that I mentioned. So a lot of the other studies that we're kicking off are using Eutrepea, right, because it's known, it's in the market, it has a lot more data, it's very easy for patients to take. It's dosed four times a day, but that could be a potential benefit when we look at some of the things we're studying, like how do you transition patients from oral to inhaled? How do you transition a patient from IV triprostanol who might be on citatricep to an inhaled formulation that's much more attractive for patients to take? We're going to look at real-time hemodynamics with some studies that we're planning. We're actually going to look at hemodynamics as we push the dose. because when you think about the last 15 years of history where we haven't fully explored is if you can dose higher safely, what is the potential of this mechanism? It could be much broader. So that's why we're looking at things like PHCOPD. And we're going as fast as we can. And nothing's really stopping us. And with the financial picture that Mike mentioned, we're funding all this on our own. I don't want to come back to that point, but just one more on just the development of l606 so you have a study up and running now phase three study talk talk about the timelines there and when can we expect to learn uh about that um so we believe we'll have the top line data in 2029 um as most phase three studies it's driven by the enrollment rate uh and it's a global study so we're going to be in more than 20 countries it's you know roughly 350 patients in a one-to-one randomized control trial against placebo we know some other trials out there that are competing but there's a couple benefits that we think that we have one strong data coming from the 48-week study right that's the first the second is the fact that by going global we're really addressing a problem that has been left unaddressed with the past inhaled formulations there's a lot of patients out there that still need to benefit from inhaled formulations especially in phild and the last thing i would say is it is a nebulized product we are using a device that's very familiar to patient to physicians outside the united states so the device that we're using is in partnership with a company called victora that particular model a form a version of that model was already used to treat pah with iliprost so when we show up to a clinical site and say this is our product profile this is our device they have a very high degree in confidence that patients can use that device okay and for both of these drugs that are based off Traposanil, I think there's a lot of focus just going back to IPF for just a moment.

Ben, Analyst — Jefferies

You know, with with Tiveso potentially going there and, you know, could there potentially be an exclusivity around that asset? I guess, how do you think about navigating that scenario in IPF if that that happens?

Speaker 1

Yeah, it's it's a question that we're getting. We know that on Tiveso, if approved, will have orphan drug designation and that would come with seven years of exclusivity in the United States we're going to let the clinical science dictate what our path is so the next step for us is to confirm our hypothesis that dose drives improved efficacy first we got to make sure it's tolerable right so that's the main goal is in a IPF and PPF patient if we push the dose to higher levels can they tolerate it we believe the answer is yes because we're treating those patients already that happen to have PHILV. So if we are successful in showing that there is a dose response, I think that then becomes the question then, is how do we use that information to think about the next study that we would do to either use it with eutrepia and figure out how to bring that to market with a label claim, or more likely is how do we put that into an L606 study, right? Because it is competitive. So we're going to have to find a way to differentiate everything, not just based on the formulation. But if we can show that with our dosing, we can get to improved efficacy. That's pretty exciting.

Ben, Analyst — Jefferies

Okay, excellent. And if there are any questions from the audience, just raise your hand and I'll work into the conversation. But Mike, I want to ask you, so you know, as you've expanded investment into the sales force, and now as with L606 is advancing, and we see kind of a range of other studies kind of coming up on the pipeline. How do you think about just the business overall? Is the focus on just revenue growth? Or is Is there an eye towards maintaining profitability?

Speaker 2

Yeah, so as I had said earlier, if you look at our Q2 results, you know, we generated about $100 million of EBITDA, about $80 million of net income, and also we added $60 million of cash to our balance sheet. You know, one of our foundational principles is, you know, as we grow Eutropia, obviously we want to grow the top line. we want to treat as many patients as we can but we also want to grow profitability so while we are you know reinvesting as you said we're reinvesting back into our sales force we're increasing our patient support services for utopia we're clearly investing in r d across all of these studies the plan is to do that while increasing our profitability as as uh as sales increase so just to give you an example um you know roger has previously stated at earning this you know this past earnings that we believe 2027 sales will be more than a billion dollars we believe we can drop over 50 percent of that as additional cash to on the balance sheet so you know for a company that is still relatively early and it's in our launch in our commercial stage to be able to generate that type of profitability and positive cash flow i think really separates us from a lot of other companies and ultimately you know gives us the flexibility to where we believe additional investment is important or needed we will not hesitate to do that but we absolutely have an eye towards maintaining and increasing profitability quarter on quarter okay excellent well I think that is it for me any anything to leave us with listen first just really appreciate you having us you know we're very excited for for where liquidia is heading we feel utopia is just scratching the surface of what we'd be able what we're what we're capable of doing and very excited about AS WE MOVE FORWARD HERE SO WE'LL HAVE A LOT OF ADDITIONAL INFORMATION AS WE MOVE FORWARD AS JASON SAID I THINK WE'LL HAVE A LOT OF DATA AS WE MOVE INTO 27 AND BEYOND AND AS I SAID WE FEEL VERY CONFIDENT IN OUR ABILITY TO CONTINUE TO GROW ON THE SAME TRAJECTORY THAT WE ARE ON RIGHT NOW FOR UTREPIA SO YOU KNOW VERY EXCITED AND REALLY APPRECIATE YOU HAVING US OKAY THANKS SO MUCH THANKS BEN THANK YOU BEN