Liquidia Corp (LQDA) May 13, 2026 Conference Transcript

All right, everybody, we're going to get going here with our next company presenter at the B of A Annual Healthcare Conference. My name is Jason Gerber. I cover pharma and biotech at B of A. I'm pleased to be introducing Liquidia. And joining us is Mike Cassetta, CFO and COO, and Jason and our chief business officer. So, gentlemen, thanks for joining us. Liquidia has one of the more interesting commercial launches in biopharma since, I believe, June of last year. And so we'll talk about that, your drug lead, Eutrepia for pulmonary arterial hypertension and PHILD. We'll talk a little bit about pipeline as well. So maybe we'll just start off and talk a little bit about Eutrepia now, which three full quarters under your belt, where you're at, what's exceeding expectation, and if you can talk a little bit about the opportunity on the come.

Yeah, thanks, Jason, and thanks for having us and hosting us here today. um you know liquidity is a great place uh to be right now and you know as as you said we launched our product back in in june of 2025 and you know we really just knocked the launch out of the park we uh in q1 we recorded 130 million dollars of revenue um and execution is not just on the commercial front it's the discipline that we show financially we recorded 70 million dollars of adjusted EBITDA we've added 30 million dollars of cash to our balance sheet in the quarter so So, you know, we are really executing on everything that we set out at the launch. We couldn't be happier with the launch. Eutrepia, as we've, you know, as Roger, our CEO, has talked about, our goal is to be the process cycle in a first choice. And I think we're well on our way there. If you just look at our market share from a revenue point of view, in our first quarter of launch, we had about a 10% market share. Second quarter, we went up to about 16%. And in this most recent first quarter of 2026, we're at over 23% market share. So we are growing quickly. We're excited for where we're going and, you know, really excited for 2026 and beyond. And, you know, one of the things that we've talked about is we believe we're going to be a $1 billion product in 2027, and we're on that trajectory to get there.

So you launched Utrepia into these two indications as a 505B2 reference brand, the reference brand being United Therapeutics Tiveso. So can you talk a little bit about the attributes of Utropia that are resonating most with healthcare providers and what's driving this strong adoption dynamic?

Yeah, I mean, I think what we've always thought and hypothesized prior to launch is that we have a superior product profile. And I think what we're seeing in the field is exactly that playing out. And what we like to do is we talk about the three Ds. And the first D is being able to achieve deep lung deposition. And, you know, for those who don't know, we have a proprietary technology, formulation technology called PRINT. It allows us to manufacture particles of uniform size and shape. That size was specifically designed to bypass the back of the throat and the upper airways and achieve that deep lung deposition. By also having these monodispersed particles, we're able to use an easy-to-use, low-resistance device that's been used for years and years all over the world, which is low resistance, easier to inhale, especially with patients who have lung dysfunction. And the last piece of this, that it's all tied together, allows us to get to higher doses. So we're able to dose Eutrepia at two, three times of what the normal dose of Tyveso is. And one thing that is non-controversial is more prostacyclin is always better. And our ability to titrate to those higher doses is really what's resonating with doctors, with patients, and ultimately has contributed greatly to our early successes of the launch.

Got it. And are those points of value propositions sort of equally shared in PH, in PHILD? Because I know with like PHILD, right, like parenterals never got traction in ILD. So I don't know, does the added dose response matter as much in PHILD versus PH? Yeah, you want to take that?

Sure. I think the answer is yes. So we've known for a while in the class of prostacycline analogs that exposure can drive improved activity. And so we're treating the pulmonary hypertension in that ILD patient. And what's more interesting is we actually did a prospective study that we call the ASCENT study. And this was a phase four study where we were looking to see, does the dose titration in PHILD patients look different than what we had studied in INSPIRE in PAH? But with the safety data that we had generated in INSPIRE, we said, let's see if we can have a more directed dose titration in PHILD. So the ASCENT study looked to not just go to higher doses than what the previous thought therapeutic target, but do it faster. And we did so in a way where we didn't exacerbate the background cough. So to the point of is more better, that's consistent with the class, but it needs to be tolerable. And I think that's what we're showing in the market and in the studies.

Okay.

So maybe let's talk numbers, right?

You're almost close to 5,000 unique prescription written since the time of the June launch. And I think the messaging has been, it's a rough split maybe between the two indications. And so how do you think longer term, like in terms of growth sources? Because by our math, I think Tyveso, which was nearing 2 billion at roughly 200,000 a year implies about 10,000 patients. So that's a pretty impressive number, um, given, uh, where the incumbent product was.

Yeah. I mean, like I said earlier, we, we couldn't be happier with the launch. Um, the uptake has been significant. Um, you know, as you said, from a disease breakdown, we we've seen roughly since the launch and it's been pretty consistent about 50, 50, uh, between pH and pH LD. I think the interesting thing about the opportunity going forward is what we believe is that we're just scratching the surface here. So if you look at the prostacycline market in PAH, it's about $3 billion total, broken out by the oral prostacycline market, which is about 2 billion in 10,000 patients. The traditional inhaled market was around 500 million, and then the perenoral market was also around 500 million. So that total opportunity is $3 billion, and that's something, and when you ask about what surprises at the launch is, one thing that we've seen, based on what we talked about, the attributes of our product, the dosing flexibility of our product, we believe we can access that entire market or the vast majority of that market. As Jason had said, we've done the Ascent study in PHILD. We're always looking to improve the product profile of Eutrepia, putting more data in the hands of physicians, which is why we're planning additional studies here in 2026 to look at oral transitions from CelexaPeg, which is Optravi, and also looking at a study to transition patients from from barrenneral treatment who are also on cetatercept. So, you know, when you look at the longer term opportunity, we think that opportunity in PAH is a $3 billion opportunity, not a $500 million opportunity like many people thought when we launched. Now, PHILD is a little different because it's relatively new. The first product was approved in 2021. We believe that the market penetration in PHILD is probably still less than 20%. So there is a massive market building opportunity in PHILD, which we are working on. We've always looked at that as a longer-term opportunity. We also have announced that we're increasing the size of our sales force by 33%. The focus on that is going to get a deeper reach into local community physicians and centers where a lot of these PHILD patients are sitting, sometimes even undiagnosed. So there's an education on disease education, diagnosis, ways to diagnose.

And we think as we move through you know 2026 and beyond that that phild opportunity as a total market could be three four five billion dollars okay and i think you framed uh about 75 percent of use new patient 25 switches is the right way to think about that number that most of the new patient is phild whereas most of that switch market is ph because ph is a more mature category phild is a under penetrated? And that's at least in my mind where I would expect more of the market expansion to be occurring.

Yeah. I mean, I think intuitively, I think that makes sense as largely PHILD is a market building exercise. And the vast majority of those would be new starts. There's not to say we aren't seeing switches in PHILD, but as you said, in a more mature market in PAH, that market is growing, you know, probably more slowly as we go. You have patients who are progressing through the disease and new patients coming in. But I think that the funnel, the top of the funnel on new patients is probably is going to be much bigger on PHILD than it is on PAH at this point.

And I believe you've expanded the sales force. Can you talk a little bit about the rationale there? Is that driving, is the intent there to drive greater breadth of use in the community or just, or depth of utilization?

Yeah, so one of the benefits, and as I said in the open, you know, we're a unique company in the sense that we're in our third quarter of launch, we're generating positive cash flow, we've been financially disciplined from the beginning, you know, this is all while we're planning or executing on eight clinical studies, we're building a new manufacturing facility in North Carolina to, you know, almost triple the capacity of Eutrepia, you know, but one of the opportunities we're always going to look to is to invest into the opportunity and and one area that we're investing into is is the sales force like we said uh we're gonna we've increased that by 33 these people are all on board they're in the process of training and the plan is to have them in the field in june now the goal for that is really to expand our reach to get further deeper into the local community you know where we're really addressing phild now when you talk about breadth and depth you know we've given a lot of stats statistics of our launch, you know, through the entire launch. And just to reiterate some things that we've talked about, if we provided data as of the end of February, and then again at the end of April or earlier this week at our earnings call, if you just look at the increase from February to April, the amount of prescribers who have prescribed five or more prescriptions increased by almost 25% just from the end of February. The amount of new prescribers just from the end of February has increased by 15%. So, you know, the goal here is we know in order for us to achieve the goals that we're looking to achieve, expanding both the breadth and the depth is going to be critical. And we're doing everything we need to do to expand both of those metrics.

Can you put those metrics in some more context in terms of, you know, oftentimes early launches could get driven by a subset of high prescriber.

Is that a pretty broad number relative to what you envision as like the total prescriber base longer term yeah i mean listen we couldn't be happier you know at launch we were targeting about 6 500 physicians so we are just still scratching the surface which what's it's really what excites is about the overall opportunity we feel that there is still a tremendous opportunity you know obviously in local community on the phld side but even in the centers we are you know we are we feel that we are getting entrenched there physicians are getting great experience with utropia they're seeing the benefits it's having to their patients. And ultimately, like I said, and what Roger has said all along is we want to be the process cycle in a first choice. Um, and, and that's both from traditional inhaled patients and also those who could be switching from other therapies. So, um, everything has met our expectations that like, you know, like I said, some have exceeded our expectations, especially opportunity on the oral front. But the bottom line is we are, you know, we, we are extremely focused. We are building great relationships across the physician space. We have a best-in-class commercial organization. We have a best-in-class market access organization. Our pull-through rate is over 85%, which for those who've been in pharma for a long time, if you had a mature product 10 years into launch and you were at 85% pull-through of referral to first fill, I think people would be happy and we've seen that from the get-go so we could not be executing any better at this point we're always looking to improve but the bottom line is i think we are you know we have had a tremendous uptake and we're looking for a lot more here in the years to come yep okay and so uh i think you indicated in your most recent one q update something like 4700 or so unique prescription um 4500 45 sorry sorry with a very high conversion rate to um uh turning that into

a paid script correct right so your 2027 outlook is a billion plus right and so a billion a billion billion flat okay um because it doesn't take a mit scholar to figure out the 5 000 patients would would get you to a billion so i guess what i'm asking is is that billion uh conservative it's interesting that we're here talking about whether a billion in our second year of launch is conservative, but I'll take that as a compliment.

Listen, you know, there are other nuances. You know, we do have a component of free drug. We do have a patient assistance program. We have a best-in-class patient support services, which includes a patient assistance program that, you know, roughly 10% of patients are participating in, which is pretty standard in this space. We also have a voucher program for, you know, any patient. Their first 28-day script is free. it can be free and we've seen utilization of over 50 on that um you know so we are we have been on a trajectory that if you look at patient starts from the launch to you know end of april where we've given our last data it has literally been a linear curve and um you know so for us to stay on that trajectory you know just staying on that trajectory is going to achieve this golden there is no bolus that has to happen there is no hockey stick that needs to happen in order for us to achieve that billion dollars so um you know we're confident i think we've taken pride on on talking about when we succeed and we execute we'll tell you about it we're not making these bold predictions and and whatnot but we feel that you know a billion dollars in 27 is definitely within reach and within sight and and part of our operating plan as we move forward okay and then two dynamics uh i'm just curious do you do you envision sort of the 10 free drug is a good ratio in the next few years?

I know that maybe comparable drugs, I've heard similar metrics, and so that makes sense to me. And then have you any learnings at this point around how long patients are staying on and what the discontinuation profile looks like?

Yeah, I mean, we're still very early. We're still 10, 11 months into a launch. So I think to talk about persistence and durability, it's probably a little early. I think what's important to understand though is these are very sick patients and these are very sick patients that progress through these diseases, both PAH and PHILD. We believe our product profile is best in class. So to say that there are no discontinuations, that obviously is not the case. But we're very happy with where we are. We're providing patients with a choice. Our ability to titrate to higher doses, I think, is helpful to, you know, help deal with the disease progression, something that these patients have not seen before, given the limited dose capacity or what we've seen traditionally with competitive products. But it's something that we'll monitor and continue to monitor. And, you know, we're not prepared to talk about that specifically now, but we're very happy with the product profile of Eutrepia and the success that it's going to bring and the relief it's bringing to patients.

And getting to that billion-dollar, I think you flagged a couple sources, new patient ads, oral to inhale switches, PHILD white space, and then depth for prescriber. So when we sit here today and think about these things, You know, which of those need to accelerate just as first what needs to persist?

I think if we stay on the plan that we're on and the trajectory we're on, I think things will work itself out. And, you know, I think when we launched, a lot of people said, oh, there'll be a bolus of patients. There's warehouse patients and then it will flatten out. We've seen no flattening out. We've seen a continued trajectory. You know, like I said earlier, if we stay on that same trajectory, which we see no reason why we can't. But we also talked about that we think this could be a six, seven billion dollar opportunity in PH and PHILD that, you know, there is a massive, massive opportunity. We have the flexibility to have capital. We have over 220 million dollars of cash on our balance sheet to invest where we see opportunities to invest. We've never hesitated to do that. As I also said earlier, we're planning additional studies, both in new indications, but those that will improve the product profile of Eutrepia here. in the short term, where we hope and plan to have a steady stream of data starting in 2027 in oral transitions, in TyBASO transitions, in transitions from parenteral on Cetatricep. So we feel very happy. We're putting ourselves in the best position to succeed. We want to support this patient population that has always been our, you know, we're here to benefit patients, and we want to put as much data in the hands as we can. but the bottom line is you know staying on the trajectory nothing nothing crazy has to happen in order for us to to to achieve that goal if we stay on the same trajectory that we've been on for the first 10 months of launch we're very confident that we can achieve that okay um i know rusty's not here but i have to ask the question um just around freedom to operate in the litigation matter on the 327 patent, it's really dragged on.

And now it creates a, if the judge were to reach certain decisions, it creates a very problematic issue for all these patients now who are on utrepia. So anything you can offer around just freedom to operate in, you know, scenarios.

We're probably the wrong people to ask because if you asked this in July, we would have said we thought a decision was coming in September or October. um now maybe september october it could be 2027 but um you know the bottom line is we expect a ruling any day like we've said from the get-go you know obviously it's frustrating um you know living with that but we're just focused on execution now there's nothing we can do about it at this point um where we are focused on our pipeline we're focused on a eutrepia launch we do expect a decision at any time um we are confident um we believe the facts are on our side we believe we should win the case um but we're waiting like everybody else and and the only thing i'll leave you with is like any good management team you're going to be prepared for any results so we have we have war game this we've we've had conversations with that you know internally externally whatever the decision is we'll be ready to move forward um and we feel very confident that in the arguments that we've made we feel confident in the facts of the case but but we await like everybody else okay maybe uh we can just talk a little bit about um you know future plans sales and marketing investments be it on phase four data generation or i know that with phild the diagnosis uh was something that at least your competitor flagged as something doctors did perhaps more education on to identify these patients and so uh you know if you think about some of the initiatives on the come uh for uh accelerating growth yeah i mean you know on phild education is is is very important so expanding our sales force by the 33 percent like we talked about is critically important getting them into the field building new relationships and as you said educating these physicians both on both on disease identification but then also on on, on diagnosis is, is critically important. We also, like we said, you know, our successful launch, you know, has been amazing. The ascent data that we generated in PHILD, I think was critical to that success. And we're looking to mirror that through these other phase four studies. Like I said earlier, a, a transition study from Tyveso and Tyveso DPI, an oral transition study in PAH, a perennial transition study alongside Cetatercept. We think all of this will add to the product profile, putting more data in doctors' hands, making them more comfortable on how to initiate utrepia for these patients, we think is all going to go a long way. If there are other opportunities for us to do that, we've afforded ourselves the opportunity to be able to invest further based on how we have invested into the launch, the amount of cash generation that has occurred, I think puts us in a really good place. You know, Roger has said from the get-go, our goal is to grow profitability quarter on quarter, every quarter and reinvest part of that profitability back in the business. So the idea that we're able to be 10 months into launch, be able to plan eight, you know, be either executing on, planning, initiating eight clinical trials while also still generating positive cashflow, I think makes us extremely attractive from an investment point of view. And, you know, the sky's the limit for us here as we get through the end of 26 and into 27.

Okay, let's talk about just price and access dynamics. Two-player inhalation market doesn't appear that you're driving a ton of switch from your competitor. So that would suggest to me there's price rational behavior and that we should think about this as a relatively price stable market that won't impede the volume growth that we expect Eutrepea to enjoy. But is that the right way to think about it? I know there was, you alluded to some growth to net uptake in 26 as you build out better access, but I'm just wondering, is that modest ultimately? And just how to think about those dynamics.

Yeah, I mean, I think if you look at one of our goals prior to launch, and we always talked about this, was to making sure that patients had a choice. You know, we wanted to make sure that if patients and doctors wanted to choose Eutrepea, that there would not be hurdles placed in front of them. And, you know, through the work of our, you know, like I said, our best-in-class market access team, we have achieved that goal. We have achieved that goal that if patients want to try Eutropia, they're able to try Eutropia. You know, we had said previously that, you know, there were some standard new-to-market blocks that had existed at launch that is very standard across the payer landscape. as those have come off um you know through the back end of of 25 in the early part of 26 there would be a natural slight degradation in our in our gross to nets which we were had fully expected uh you know so i can't speak to what our competitors do um our goal as i said is to have access we've achieved that access um and and we think that you know for everything obviously can change at any time but we feel very comfortable that most importantly that we've talked about the value proposition that Eutrepia brings to patients and the healthcare system as a whole. I think that has largely been adopted. And ultimately, we feel that we're in a really good place from a pricing point of view.

Okay. Can you talk a little bit about the dynamics in pH and where inhalers are now playing? Because Merck's WinRiver, after the Hyperion data, does seem like it's getting more traction in a newly diagnosed patient after they get their generic doublet. It seems like there's an earlier push to go to WinRiver.

And so what does that mean for the sequencing of inhaled versus oral versus parenteral so it's a great question and it's an exciting time for the market because these better medicines are coming to treat patients and so the the medical community will figure out the best way to use them and it's even happening outside of our control meaning we can do a study that looks at using utropia with citatarset but it's actually happening out there. There's a poster at ATS where a hospital has tried this in multiple cases. So we're looking forward to seeing what that looks like as they think about the use of background medicines in patients who might be on an IV or a subcutreprosanol moving them to inhaled. So when you think about citatercet, the prospective data and the real world data suggests that you want to use it with a prostacyclin. There isn't anything that says you shouldn't use the prostacyclin so then the question is what is the highest dose most tolerable convenient way to do that and we think it's going to be inhaled troposinol and currently in the market utropia is quickly gathering share because it is very tolerable at high doses and it's convenient to take so by that logic then perhaps the success of wind river may pull forward inhaled at the expense of parental oral or even oral? Yeah, that may happen even regardless of cetatercept. As Mike said, we're seeing transitions from oral right now, right? We're seeing transitions in the field of IV to inhaled. And so if cetatercept is a vehicle to improve patient care, yes, we think inhaled process cyclins may be the best. And currently we believe our product is that product. Yeah.

Okay. Maybe shifting gears to just competition, there's obviously insmeds t-pipo once daily inhaler you have your bid inhaler there's been more recent disclosures uh by united about uh both a soft mist inhaler that will have some healthy volunteer data and then there's relenopeg dpi as well and not much is known about these products so it's a bit of an unfair question and i can see that but nonetheless um i guess you guys have at least made some public statements about like you know the micron size with soft mist inhaler and um so there's raises some questions at least around what the tolerability differentiation could be of an approach like that what do we know about relinopeg dpi is there much out there well

i mean it is a question that we're getting asked a lot because we're we're happy to talk about anything but i think we bring it back to what is the bar and what is the comparison of any new product. Eutropia has lifted the bar for what inhaled prostacyclin can be with triprostanol, meaning high doses in a convenient way that's tolerable. So everything else that's coming along is going to have to meet that bar. But we recognized that a few years ago, and it's why we licensed L606, a twice daily, even more tolerable way of inhaling triprostanol to lift that bar. So it's interesting that all of a sudden these new products are coming along with no data to tell a story that isn't even compared against what the best product in the market is today, which is Eutrepia, or against what's coming. So, I mean, Relenopeg, we've seen some data. It doesn't appear to be safer than CelexaPeg. It may be worse from a tox profile. And it's being developed, as we understand, on the Mankind platform, which we're currently competing against in the market today. And we don't believe that that's more tolerable. So we don't put much thought into Relenopeg DPI. And the soft mist inhaler, while it is an interesting idea, is not a new idea. It's been around for decades. And, in fact, we look at that more as a way of trying to make nebulized suprothenol or tyvaso more attractive in that product format. Again, we're focused on our business, which is how do we ensure that the market understands the benefits of utropia.

Understood. So, and of those, I guess the most tangible update in theory could be soft mist inhaler, approfability sometime next year, right? If the company is able to deliver on their timelines, it sounds like you don't see that as a material market changing event.

Not from our perspective. I think the other thing you have to remember is you get what you study. So if you study something really fast, you may not be generating the data that the medical community would want. And that's, again, why we're making choices to prospectively study questions that are interesting to the community. It's why we did the Ascent study in PHLD. It's why we're doing the transition studies. And ultimately, that is what builds trust, right? So it's not speed to market. It's give me the information that I can trust when I'm treating a lethal disease. And that's what we're focused on.

Ahead of ATS, is there anything you guys would flag that you think is interesting? What are you guys really keying in on here?

Well, I mean, it's a great conference for physicians who treat pulmonary hypertension. We're going to be looking to see what new data is being presented, both by competitors, but also what's coming out of centers. I mentioned that there is a poster that we're interested in seeing related to how patients might be transitioned from IV to eutropia. And that's being done outside of our control. So that's what we're excited by. If we can put good information into the medical community, they'll get to choose the types of studies that they might run themselves.

I guess lastly, just with L606, do you view this more as life cycle management or something that could expand the opportunity even beyond what you're realizing? with utropia?

Well, so it's an interesting question. So if we just stick with PAH and PHILD, I think our goal is to make sure that we're continually optimizing the benefit of that drug in that route, right? So L606 twice daily gives us more continual exposure, which is the goal, right? At lower C max, so a better tolerability profile. In fact, we think the most tolerable of any prostacyctin study to date in the inhaled route. And that's what we're kind of focused on. So it's hard to suggest that any other product is going to do better than that in those diseases. But at the same time, we're looking to expand into other diseases. So we've mentioned that we have a PHCOPD study that we're interested in. We've mentioned systemic sclerosis with Raynaud's phenomenon. So the idea is where else can we take inhaled prostacyclin? So not just in the current diseases, but potentially new diseases in terms of the growth. Okay. We're out of time. So gentlemen, thanks so much for joining us. Thanks for having us, Jason. Thanks, Jason.