Conference Transcript - LQDA 2026-06-03

Amy Lee, Analyst — Jefferies

Okay, awesome. Let's get started. Thank you, everyone, for attending the Jefferies New York Healthcare Conference. I am Amy Lee. I'm a biotech analyst at Jefferies, and I have the pleasure of welcoming the Liquidea team, Roger Jess, the Chief Executive Officer, and Mike Casita, the CFO and COO. I will turn it over to them for opening remarks.

Roger Jeffs, CEO

Thank you, Amy. Always a pleasure to be here at Jeffrey's with you, and I'd also like to acknowledge that Jason Adair, our chief business officers here in the audience, can answer questions after this fireside chat. Maybe just to start off, it's been a really remarkable year. It was at this conference last year that we announced the official launch of Eutropia into the PAH and PHILD space, and I think by all measures, it's been a transcendent early phase of launch. Just in the initial period, we've garnered 25% share. We've achieved over a half a billion dollars in revenue run rate, and we feel very confident in our articulation that we should, in 27, exceed at least a billion dollars in annualized revenue. And really, we're just starting. I think the way we're going to invest in the programs is across four verticals. So, one, we're going to continue to invest in Utrepia's launch and success. Part of that will be augmenting our sales team, which we've already done. We've gone from 48 reps to 64. Those reps are in training and will be in the field in the coming months, and we think they'll obviously port significant value as we look to increase the reach and breadth of those sales calls. We're also clinically going to invest in Eutropia's success. We're going to do multiple Phase IV type studies where we look to transition patients directly from Tyveso and Tyveso DPI, and also do directed transitions from oral therapies, which is a $2 billion market, as you may know. And then finally, we're doing a study in concert with Winn-River to show that there's synergy there and that we can de-intensify the parenteral class of compounds and improve patient care on eutropia as a much gentler way to give prostacyclin therapy. So really, really excited about what we're doing there. I think the next vertical is we're going to invest in L606. I'm happy to announce today that we've put our first patient into the L606 phase three registrational study. So the sites not only are they initiated in screening but they're enrolling patients and we're very pleased about what our clinical team has done in that regard. I think the next thing that we'll do beyond L606 is we'll begin in 26, 27 in the future years looking at the new and next large indications that could accrue and accrete significant value to liquidia, so this would include IPF studies, PPF studies, PHCOPD studies, and then our Raynaud's study as well, so looking to massively increase the total addressable market going from what already is anywhere from a seven to eight billion dollar opportunity in PAH and PHILD alone to adding incremental, you know, four to five billion dollar market opportunities across the indications that I just mentioned. Then finally, we're going to do this with financial discipline, as Mike will talk to you, no doubt, during the Q&A. We're looking to not only grow top line, but bottom line and improve on our profitability, which we achieved in one of our first full quarters of launch, and so looking to grow profitability. The beauty of that is that we can independently fund and grow our company without having to access the capital markets and be dependent on that dilution.

Amy Lee, Analyst — Jefferies

Well, very, very exciting progress. Maybe before we get into the launch, I just want to take a step back and, you know, help us visualize the total opportunity for eutrepia, right? Because you've laid out a pretty helpful framework for PAH and PHLD, but now you're running all these expansion trials. When we think about what indications where eutrepia could be used in, are you thinking about maybe looking across all the respiratory and, you know, vascular diseases where pH is a component? or are you thinking about maybe looking at where tripostanol in any form or prosyciclin is used on or off label as potential indications that you could potentially go into?

Roger Jeffs, CEO

Yeah, so the nice thing, there's already validation for the next indication. So if you look, United Therapeutics had success in IPF. So they've already shown in two replicate studies that they have a confirmatory result on improving FVC. Our view is that that's an approvable set of studies, which is good for the field, and I think good for us. It gives us an opportunity, one, to develop data with eutrepia to show that the things that happen in pH and PHILD, like good tolerability, better dosing, better outcome, also port to the IPF population. And remember, a lot of those patients with IPF likely have some underlying pH. So to your point where pH is prevalent, in IPF there's probably a 50 percent or greater prevalence of pH. So we think that's somewhat low-hanging fruit mechanistically invalidated. So we're going to launch when we go and then we'll do registrational studies with L606. But those will be phase three. Like we already know that we need a dose titration schedule in IPF just as we have shown is needed in pH and PHLD. So that will be the first one. I think PPF is another opportunity. broader subset of IPF. PHCOPD is another massive multi-billion dollar market opportunity where we can launch into a phase three program. Again, that would be with L606. And then Raynaud's, we're going to do some phase two work because that's a digital digital vasculopathy, but again, addresses the mechanistic benefit of a prostacyclin, not PH, but a vasculopathy. Also also undertreated and underserved and we think there's massive opportunity there. So you know, a lot to do, we're going to focus initially on, you know, maximizing the success value of Utrapia, moving L606 along as we said we are doing and then what we're doing now is having meetings around the world with thought leaders to say what is the best study criteria that we need to enrich the population for success for PHCOPD, we'll probably just replicate the IPF studies that were done, and then Raynaud's, we're going to do a phase two study to look to see if on thermal imaging can we improve the digital blood flow that would be required to improve that indication. So a lot on our plate, all the mechanistically validated and all of, most of which we can go right into a registration pathway, so you know, high near term and midterm value.

Amy Lee, Analyst — Jefferies

Excellent. Super helpful. I think you've cited some registry data that's coming, I believe it was UCLA that's showing around 50 to 70 percent of IPF patients, or sorry, ILD patients have some sort of pH component. Does that mean that, you know, a portion of IPF patients are actually PHILD and you would be able to address them even without violating, you know, Uther's orphan drug exclusivity?

Roger Jeffs, CEO

Yeah, I think, again, you know, we're not, like, if they do well there, I think that's fine. So if they start 10,000 patients, I think eventually the product profile that utopia ports would be advantageous to those patients, and as those patients fail those other alternative therapies, we would then pick them up even in an off-label standpoint potentially. But I also do think, you know, your point is correct. There is a significant degree of underlying pulmonary hypertension that we could assess by either echocardiography or formal right heart casts to get them on label for PHILD, and we could then promote to that patient. So, you know, we'll be careful about not violating any regulatory rules around off-label promotion, but I do think those patients will understand the attractiveness of eutropia compared to the existing other products.

Amy Lee, Analyst — Jefferies

And if we were to put a number to the potential undiagnosed PHLD patients, would it be, you know, not 40,000 to 60,000, maybe 100,000 plus?

Roger Jeffs, CEO

I think, you know, again, these are broad estimates, and I think people are still trying to sort of triangulate to a better number, but that's not, what you're saying is not unreasonable.

Amy Lee, Analyst — Jefferies

So moving on launch, you put out some, you know, fantastic numbers last quarter. I think the one point that you said was really interesting is you're seeing a deepening of prescriptions in existing providers, right? Can you give us some color on, you know, what that's being driven by? Is there kind of a formulary component where maybe you're, you know, put at a, you know, more favorable formulary status, or are you seeing this in PAH and PHILD, or is this kind of more of a familiarity where doctors, you know, are originally trying out Eutrepia, seeing a benefit, and, you know, kind of either switching or prescribing more patients

Roger Jeffs, CEO

given, you know, the profile? Yeah, essentially it's product profile that's driving our success. I'll turn it over to Mike so you can hear his voice today as well, but I think, you know, And the product profile speaks for itself. What people want is the best tolerated therapy that can then, because it's well-tolerated, can be dosed more effectively to drive a better outcome. These patients come looking for a new therapy because they're short of breath and symptomatic, so they want a quick resolution to those problems. That's the value that we bring because the tolerability of the print-enabled eutropia is so good. So I don't know, Mike, if you want to talk about kind of formulary status and other things.

Michael Kaseta, CFO

Yeah, I mean, thanks, Roger. You know, since launch, our goal was always to make sure the patients had a choice if they wanted to choose Utropia. And we've achieved that goal here in the early part of launch where, you know, for the vast majority, we are at parity. Patients will have that choice. And ultimately, we've seen that in performance in the field. You know, you look at the launch metrics that we've shown through the end of April, we've had 4,500 prescriptions have been written. There was a slight acceleration from February to April, and where I think we're most excited is both on the breadth and the depth. If you just look at doctors who have prescribed Eutrepia to five or more patients, that number of physician has increased by 25% since the end of February. We're also, as Roger said, expanding our sales force. That expansion, which will increase our targets from approximately 6,500 doctors to over 8,000 doctors, There is a tremendous amount of white space in PHILD. That's where we're going to put the focus on, you know, on the new sales force to get deeper into the community, to educate doctors, identify patients, and ultimately, you know, put it in the doctor's hands to either prescribe to these patients or to refer them to the larger centers, which we feel we have a stranglehold at this point.

Amy Lee, Analyst — Jefferies

Well, Mike, to your point, there was a slight acceleration, right? Can you update us, because you're talking about, you know, billion plus by 2027, that implies a consistency of, you know, ads. Can you update us on the most recent trajectory? And then as we think about kind of when, where growth from here is sustained by, is it most, I mean, is there still head, you know, room in the academic sites? Or are you seeing a potential that, you know, once these sales force are trained and ready to go, you can actually see an increase from the community sites for PHILD as well?

Michael Kaseta, CFO

Yeah, so from a trajectory point of view, we gave data as of the end of April, we still feel very confident with where we are. As you mentioned, the billion dollar target in 2027, nothing crazy has to happen if we stay on the same trajectory that we're on, which we're very confident in, we feel that that is very attainable. And I think the important thing to note as well is that billion dollars in 2027 is, to Roger's point about maintaining financial discipline and whatnot. We believe that we can approach or even exceed an operating margin of 50% while also being in the clinic in eight to 10 studies that Roger talked about. We feel that we're really a unique company for the stage of where we're at, that we can generate significant value while also increasing the TAM, increasing our product profile, and increasing Eutrepia sales. We're very excited for where we're heading. We are just executing to the plan and feel that we stay on the same trajectory. Our opportunity to grow will continue as if you just look at the TAM in PAH, we're still just scratching the surface. It's a $3 billion opportunity in prostacyclines, and given the dosing flexibility that Eutrepia has, we feel that we will fit patients whether they are oral patients, inhaled patients, or even parenteral patients based on this. And as Roger said, the studies we're gonna do around CelexaPeg transitions and also parenteral transitions alongside WinRivera will only improve that. These doctors are looking for data. We did that with the ASCENT data in PHILD, which really helped us in the trajectory of our launch, and we think these additional studies are only going to support that further.

Amy Lee, Analyst — Jefferies

Excellent. And maybe if we were to kind of focus on the community, like what is the current paradigm in these community PHILD patients? Are most of these, you know, doctors referring to an academic site? And then in terms of, you know, how, if you were to segment the market in terms of what community sites would be more willing to treat with, you know, an inhaled Traposinol itself, how would you, what metrics would you look at? Is it, you know, people who are, you know, prescribing antifibrotics? Is it people who've had some experience with prostacyclins? Yeah.

Roger Jeffs, CEO

So in PHLD, 75% of our patients are new to prostacyclins or de novo. 25% are switches, so some of the, some of the business, the switches is coming from experience centers who are already treating. I think, you know, with two companies now driving awareness in the space, that's good for both companies. It's a rising tide phenomenon. I think if you look over the last several quarters, the market's grown 5%, Q over Q, which we'd all enjoy that to continue. I think we're driving a lot of that growth through the messaging about Eutropia and its benefits. I think obviously we're capturing a large proportion of the NRX share. There's no way you get to 25 percent share if 75 percent of your business is new to process cyclins unless you're capturing a large majority of the NRX share. So I think it's just, you know, our sales team and our medical affairs team getting into the community centers, either teaching them about pH and the difficulty of ports to these patients. to remember, if you have ILD and then you have pH as a component of your ILD, your three-year survival is about 35 percent. Your five-year survival is about 14 percent. So it's a horrific diagnosis. So the more we can sort of lean on that and then tell them that now there is a product that can address this path of biology and improve hopefully the patient's outcome, then I think the use will we get more common. Now your point is they may refer, because they may say, well, now that they're a more complicated patient with pH and not just lung disease, I'm going to refer them to a major pH center. Some of that will happen, and that's fine, because we'll be there to capture them in the major referral centers where we have, I think, an anchoring position in terms of being the inhaled prostacyclin of first choice. So, you know, either way for us, it's just education at this point, and the market will come. in ph 30 years ago when i first started doing this everybody thought it was a small market

Amy Lee, Analyst — Jefferies

opportunity and look at it today yeah awesome moving on to the litigation um uh so so um one there's been a couple of you know updates number one you have decided to expand your sales force to just target phld number two um i i see you guys like post a new job posting almost every week so um there's got to be some confidence that you have in you know you know this drug staying on the market right so can you kind of go over your base case still has there been any communication with judge andrews or are you getting more comfortable from a timeline perspective if you know there's no decision you almost have 4 000 you know patients uh on treatment now that it's unlikely that you

Roger Jeffs, CEO

know you trouble give well first if you find a job you like let me know i don't know i'll get you an

Michael Kaseta, CFO

interview and mike maybe you want to talk about the label yeah i mean amy i think for us we've confident from from day one we've invested into this opportunity you know we've as you said we've we're filling out an organization um we're expanding our our manufacturing capacity of utrepio we're going to almost triple our capacity um by building a new facility in north carolina as you said we're adding sales reps we believe in the facts of the case we are confident that we should win this case um and and we are investing as as as if we will to show that confidence so um we do not have any communication with judge andrews um all we can focus on is the commercial execution of of utopia at this point developing l606 and getting all of those other studies uh you know into the clinic so that is our focus all i'll say is while we are absolutely confident we will be prepared for any situation in any scenario that plays out and we'll be able to react quickly but the base case is that we feel that we should win and you know patients

Amy Lee, Analyst — Jefferies

will benefit most by that awesome and then amarin you know hikma versus amarin that decision is coming i think in the in the next month or so can you explain to us why um this is not a skinny label case and then what the read across would be i think the read across is simple

Michael Kaseta, CFO

As part of post-trial briefing, United Therapeutics cited the Ameren-Hikma case as part of their reasons why they should win the case. Well, that case has now been brought to the Supreme Court. Now, we have no idea why we're still waiting for a decision, and nobody knows, frankly. But there is direct relation by virtue of the fact that it was included in the post-trial brief. So whether the judge is waiting for that, whether he's not, we do not know. we're not focused or fixated on it, but at the end of the day, we're preparing. We feel it should come any day now. Granted, we've been saying that since last September, but we do expect a decision any day. It could be impacted by the Supreme Court. The expectation is that if it does relate to that Supreme Court case, the expectation is that that opinion should come down by the end of June or early July, and we'll be prepared for whatever outcome is put before us. Awesome. Super,

Amy Lee, Analyst — Jefferies

clear. In terms of, let's move on to L606. I think one thing that people are underappreciating is that because L606 is a 505b2, you've gone to the FDA, you aligned on, you know, just running a PHILD trial, and that would be sufficient for both PAH and PHILD approval, right? Whereas, you know, your competitor, TPIP, will have to run a PHILD trial and, you know, a PHILD trial separately, in an environment where WinRivere is, you know, standard of care, can you kind of go over, I guess, the hurdles of running a PAH trial on top of WinRivere?

Roger Jeffs, CEO

You know, I think, again, WinRivere is going to use a lot of the capacity or reserve that the patients have to improve, so you're going to have to improve, escalate, or have an incremental benefit above and beyond when used in combination. I mean, WinRivere is here to stay. It's a staple of therapy now. I think it's, you know, you cannot do a study in PAH without doing it as an addition to WinRivere. Now, I think they will try to do some of that work ex-US, where WinRivere might not be available to short-circuit that a little bit, but it will add an incremental level of work and difficulty in showing success. For us, though, for L606, you know, like I said, we've begun enrolling. We're very excited about that product profile. It's by far the best tolerated prostacyclin that we've seen to date, bar none. So we had, at one year, only 14% drug-related cough. So that's orders of magnitude lower than what you typically see, even with eutropia. Now eutropia has cough, but it's mild. Here with L606, we had cough at very low frequency rates, and it was mild. So that's the good news. We had nobody drop out of the study due to drug-related cough. So what we've seen, and we've had patients out more than a year, is that we can get peak and trough benefit that are the same to each other, which is what you want to do with an extended or sustained release formulation. So we've measured at peak and trough, and we can maintain the benefit over the 24-hour dosing interval. And the way to think about how simple that is, when you brush your teeth, you take L606 either at the morning or at night. It doesn't have to be with you in the day because there's enough freedom during the in-between interval to not require to carry the drug around. And we're going to use a modern portable mesh gen nebulizer. So we have portability, but it's, you know, when people sort of have this argument with themselves around once a day versus twice a day, it's kind of meaningless, frankly. And I think what you really want to concern yourself with is how well tolerated is the drug so that you can do what eutropia does. You can then dose to benefit and do it to improve the disease and outcome of these patients who are severely ill.

Amy Lee, Analyst — Jefferies

And then in terms of timelines to market, right, I think you've, both companies have put up the primary completion dates. I think TPIP is around like half a year in terms of primary completion date earlier than you guys. I know these are all tentative holds, right? Can you kind of talk over, talk about, you know, you know, the benefits of already, you knowing these sites, running, you know, phase two trials and the potential to accelerate and, you know, timelines and then, like, and then how do you think your timelines to enter the market will be relative to T-PIP?

Roger Jeffs, CEO

I mean, again, we don't have to debate if they're going to be six months faster or not. I think we're both on a similar timeline is what I would suggest. The fact that they have to do two studies maybe puts a little bit more of an arduous test for them. As you said, we're our real skill set at Liquidia that's unrecognized as our development expertise. It's where I've spent my whole career. So I think, you know, we can get these global centers up and running. We have the best thought leaders in the world as our steering committee. We have Rajiv Sagar, our chief medical officer, who's a former KOL himself, who's leveraging his own relationships. So I'm confident we will be very competitive in our rate of enrollment. But we will not do that at the expense of quality. Because you can go fast but be dumb about letting patients in that shouldn't be in. So fast isn't the key. Fast and good is the key. So we'll be rigorous about making sure we've trained the centers exquisitely on what we want from a patient profile. We'll be diligent in training them on what we need from a data standard so that when we get the data it's it's it's registrable and approvable data without any disagreement so we again rough estimate amy i think two and a half years to enroll it it's about 350 patients yes we'll try to improve on that it's a six month study so we got to run the patients out through the six month observation window three months to analyze and file ten months to approval so you can quickly get yourself to four years or so yeah but we think in sometime in 29 we'll have a readout.

Amy Lee, Analyst — Jefferies

Awesome. And then as you look across the competitive landscape, right, I know your competitor's been making some comments about softness, like once daily, and I think there was another company that had a patch data out recently. Are you seeing, and then, you know, of course, I think Raven has upcoming data in Aldi. Are you seeing any mechanisms or I guess approaches that you think is particularly differentiated? And how do you see kind of Eutrepia fitting in to some of those competitive approaches?

Roger Jeffs, CEO

So, Roar events, soluble guanite cyclase stimulators, different mechanism that would be used in combination, so not, you know, even if they had success, which I hope they do, that would not harm us in any way. For the competitive, like soft mist inhalers or a Relenopeg DPI, we have no concern about those being competitive. So if you look at soft mist inhaler, you're just giving a nebulized formulation, which which is like Tyveso, just with a different device, you're going to get the same result. Like, there's nothing changed in the formulation that would drive a different result. Relenopeg orally is the most toxic oral process we've seen. So if you look at adverse events, particularly to the gut, they're higher than anybody else's in terms of frequency. So to suggest that you could then put it in a dry powder formulation and use the mankind backbone that they're using currently for Tyveso DPI and get a different result would be highly aspirational and probably not achievable. We don't really spend any time worrying about those. Those are also years away. They're not going to impede on Eutropia. We don't believe in any way. While they're trying to do that, we're doing L606, so we're raising the bar to a different standard that they then have to meet. I think we're going to be the chaste. We've set the bar, and everybody else is going to have to try to match us particularly, not only with Eutrapia, but very quickly with L606.

Amy Lee, Analyst — Jefferies

Awesome. And then I guess just a broad question, Mike, you were talking about the operating leverage that you could have, you know, Roger, you talked about, you know, all the new indications that you're going for, and a lot of them have overlapping prescriber bases, right? As you think about the operating leverage you could build, and then kind of the competitive moat that you're building in vascular and respiratory conditions. Can you tell us, like, I mean, I don't think people appreciate it, can you kind of tell us about this competitive moat and what the hurdle for other, you know, newer companies, you know, coming in would be?

Roger Jeffs, CEO

Well, first for print, it's going to, like, that would be very hard to intercede with what we're doing. Nobody else does it. Well, you know, can make the uniform particles the way we do. And there's some trade secret know-how there as well that would be unknown to people trying to to replicate or clone that technology we also have patents that go out into the late 2030s i think with l606 you know we searched the world for a next generation sustained release moiety and jason found l606 through farmosa and there's really nothing else out there so trust me we've looked so we feel that we're years ahead of everybody else even if they they, like in a year, somebody comes up with something else, they've got to do all of the groundwork that we, and as you've just heard, we're in, already in the phase three registration study. So, we're going to be significantly ahead of anybody if anybody else comes up with a next-gen product that has some greater PK exposure. I don't know, Mike, if you want to talk about moats from an operational standpoint, but I think the fact that we are so profitable so early and can port, and maybe you can talk about what we'll port in the future, we really can control our own destiny quite fluidly.

Michael Kaseta, CFO

Yeah, and I think what's important to understand is I think we obviously know what we have with Eutrepia and what we have with L606, and a lot of companies, similar companies in our situation would potentially have to be, you know, sequencing trials, need to raise capital to do that. You know, as I said earlier, you know, we feel that if we're a billion-dollar product next year, we could have an operating margin of 50% or approaching or even exceeding 50% all while having all eight to 10 of these trials in the clinic, three of which would be registrational studies. So I think the time that it will take us to get to goal is so much less than what other companies, similar companies would encounter given our financial discipline, given the success of Utrapia and what we believe will be a product that will be of blockbuster status very soon.

Roger Jeffs, CEO

Awesome. And we can leverage our infrastructure.

Amy Lee, Analyst — Jefferies

Excellent.

Roger Jeffs, CEO

So the sales force for all these other indications, we just have to augment that for these additional ones, but they would be bolt-on.

Amy Lee, Analyst — Jefferies

Awesome. And then maybe the last question. You had over 200 million in cash and cash equivalents at the end of Q1. You're going to be generating more free cash flow, right? Can you think, as you think about how you're spending that cash, over time, I know you're investing in LO606 and, you know, additional indications, but beyond that, would you consider BD at some point, and if so, what type of targets would you be looking at?

Roger Jeffs, CEO

Well, I think, you know, there are going to be other people trying to get into these arenas because they're so attractive. So I think what we've shown with our, not only our clinical acumen, but now our commercial document is that people would have to decide is that something they want to actually commercialize themselves or we could put it into our sales bag. So I think over time we will look to grow liquidia and add on things that are synergistic particularly as you noted in the pulmonary space or cardiopulmonary space. But we have enough on our plate that the opportunity values to add something in would have to be really, really handsome otherwise why do it? another part of what we're trying to focus on is financial discipline so we we constantly look at bd jason's tireless and bringing things to us there's a lot of people that want to partner with liquidia now and that won't change that only get we'll only get more attractive as a partner for other people so we'll look but i think the bar is very high excellent well thank you so much

Amy Lee, Analyst — Jefferies

Thank you to the Liquidia team, thank you everyone for being here.

Roger Jeffs, CEO

Thank you.