Liquidia Corporation Price & Performance (LQDA)

My pleasure to welcome everyone to the Liquidia Corporation full year 2024 financial results and corporate update call. Joining the call today are chief executive officer, doctor Roger Jess chief operating officer and CFO, Michael Kaceta chief medical officer, doctor Rajiv Sager chief commercial officer, Scott Mumma and general counsel, Rusty Schundler. Before we begin, please note that today's conference call will contain forward looking statements including those statements regarding future results unaudited and forward looking financial information, as well as the company's future performance and or achievements. These statements are subject to known and unknown risks and uncertainties which may cause our actual results or performance to be materially different from any future results or performance expressed or implied on this call. For additional information, including a detailed discussion of our risk factors, please refer to the company's documents filed with the Securities and Exchange Commission which can be accessed on our website. I would now like to turn the call over to Roger for our prepared remarks. After which he will open call for your questions. Roger? Thank you, Jason. Good morning, everyone. Thank you for joining us today. We believe that 02/2025 has a potential to be a transformational year for the company as we fur further build upon the success of 02/2024 which resulted in the broadening of the tentatively approved label for to include both the treatment of patients with pulmonary arterial hypertension or PAH.

And pulmonary hypertension associated with interstitial lung disease. Or PHILD. There are four strategic imperatives that will drive our success and growth, both in the near and long term. These are seeking to obtain final approval and launching neutropenia in both PAH and PH ILD. As soon as possible after expiry of the gating clinical exclusivity on May 23 or just sixty five days from now. Secondly, to continue to advance the clinical profile of Eutremia, to position it as not only the best in class inhaled prostate but also the first in choice prostacyclin for all patients in need of an oral or inhaled prostacyclin who remain underserved by current alternatives. Third, building upon our commercial and medical prowess. To compete seriously for capture of material and enduring market share in this multibillion dollar and growing market. Segment. And finally, to further evolve our mission of being a leader in the pH space, by continuing to leverage our development expertise to advance treatment options that have the pet potential to further improve the lives of patients. Like our phase three ready next gen sustained release liposomal therapy l six zero six. I'd like to take a few minutes to expand on each of these strategic calls.

With regard to the first imperative of seeking to launch Vitrevia into the marketplace as soon as soon as possible, I'm happy to say that based on the favorable legal decisions that the last few years, there are no legal barriers that currently impact the FDA's ability to issue final approval of Vitrevio. After May 23 when the exclusive exclusivity granted to our competitor will expire. It's also important to remember that when the FDA issues a tentative approval of an NDA, it means the NDA has met all requirements for approval. But cannot reapprove due to existing legal or regulatory barrier. In our case, the sole barrier identified by the FDA was the new clinical exclusivity granted to Tyvaso DPI. Which expires on 05/23/2025. As directed in the tentative approval label, we plan to submit request for final approval. In the coming weeks.

With regards to the second imperative, of continuing to advance our studies to establish the clinical profile of atrevia, The medical community's interest in utrebia is increasing. With particular interest in the data being generated from our Ascent trial. Open label safety study of Dutrevio in PHLP patients. I'm happy to report. Excuse ma'am.

Sorry. I have a half a call at this point. I'm happy to report that we're on track to complete enrollment in the coming weeks. With 50 or more patients in total to be enrolled. We continue to be encouraged by the positive patient response escalating doses of utremia. As a reminder, at the JPMorgan JPMorgan Healthcare Conference in January we showed the dosing and tolerability profile for the first 20 patients that completed eight weeks of treatment. We noted that the PHLD patients on Eutremia were able to titrate to doses that are three times the comparable therapeutic target of nebulized TIVASA. And today, we're happy to share some new information from the ASCENT study.

We've also been looking at exploratory measures of efficacy One such measure is the change in six minute walk test at week eight. We are pleased to report in this same 20 patient cohort the mean change in baseline improved by 26.4 meters. While it is difficult to draw strong conclusions from cross study comparisons, it is worth noting that in the phase three study of nebulized Tevaso in PH ILD patients, the INCREASE study Active group patients had an observed mean improvement of six minute walk distance of 15 meters at week eight and twenty two meters at week sixteen.

We are highly encouraged by this early efficacy data from ASCENT. As it demonstrates that Utopia supports the key therapeutic attributes in PHLD we aspired for it. Specifically being well tolerated and amenable to rapid dose escalation to doses well beyond historical standards. Leading to an accelerated therapeutic outcome that is in line or better than published results of existing therapies. And it should be noted that this data is especially compelling when compared to published data from Tyvaso TPI in the like sample of treatment naive PHILD patients at the National Jewish Health Center we have discussed previously. Or sixty nine percent of patients discontinued therapy after a median time of only forty days. With drug related AEs, especially cough and clinical worsening listed as primary reasons for discontinuation of Tyvaso DPI.

We look look forward to highlighting a more robust dataset from the ASCENT trial at the ATS International Conference in San Francisco. This May. With regard to our third strategic imperative to build upon our commercial and medical we have built a commercial enterprise that we feel is best in class. Our team has been in place for over a year and a half and continues to support the use of treprostinil injection while also reinforcing relationships our healthcare providers and our understanding of the unmet needs of PAH and PHILD patients throughout the country. We are prepared to provide a seamless service to patients and providers upon launch of Vutriptyline. And look forward to educating the PH and PHLBD communities on the favorable and pension potentially game changing product attributes. [indiscernible] Lastly, as we look at our fourth imperative, to innovate and develop better therapeutic options, we continue to advance L-six zero six, our sustained release liposomal formulation treprostinil that provides more consistent twenty four hour drug exposure and two twelve hour dosing segments including during sleeping hours. We know that continuous infusion has shown the best efficacy with prostacyclin analogs, and we believe that the PK profile of L606 may provide the next closest noninvasive approach to maximizing the benefit from the more targeted inhaled route of administration.

It is for all these reasons and with an eye towards our pending launch of Vutrebia in the coming months that we decided to further strengthen our balance sheet as announced yesterday. With an extension of our valued partnership with health care care royalty partners that might will speak about now. Along with an overview of our 02/2024 financials. Mike?

Thank you, Roger, and good morning, everyone.

Before we review our full year 2024 financial results, I'm happy to highlight yesterday's announcement regarding expansion of our financing agreement with Healthcare Royalty Partners. Which will provide Liquidia up to an additional $100,000,000 of financing in three tranches. Including the $25,000,000 tranche funded at closing. We are grateful for the trust, commitment and confidence Healthcare Royalty Partners has demonstrated over the years and we are optimistic that these proceeds and a successful launch of Vutrepia following the expiration of exclusivity this May could lead to our reaching profitability without the need for additional capital. Turning to our full year 2024 financial results, which can be found in the press release, you will see that revenue was $14,000,000 for the year ended December 31, 2024. Compared with $17,500,000 for the year ended 12/31/2023. Revenue related primarily to the promotion agreement The decrease of $3,500,000 was primarily due to lower sales quantities driven by limitations on the availability of pumps used to administer treprostinil injections subcutaneously. Sales quantities will continue to be impacted or at risk until alternative pumps are available. Cost of revenue was $5,900,000 for the year ended 12/31/2024 compared with $2,900,000 for the year ended 12/31/2023. Cost of revenue related to the promotion agreement as noted above.

The increase from the prior year was primarily due to our sales force expansion, during the fourth quarter of twenty twenty three.

Research and development expenses were $47,800,000 for the year ended 12/31/2024, compared with $43,200,000 for the year ended 12/31/2023. The increase of $4,600,000 or 11% was primarily due to one, a $6,100,000 increase in expenses related to our L-six zero six program. Two, a $5,300,000 increase in expenses related to Eutrebia research and development activities including the ASCEND trial. Three, a $5,100,000 increase in personnel expenses, including stock based compensation, related to increased headcount and four, a $3,500,000 upfront license fee due to Pharmosa for the exclusive license in Europe to develop and commercialize L606 recorded during the year ended 12/31/2024. Offset by $15,100,000.0 in lower commercial manufacturing expenses reflecting the impact of expensing Eutropia inventory costs in the prior year And two, a $10,000,000 upfront license fee due to PharmHouse for the exclusive license in North America to develop and commercialize L-six zero six during the year ended 12/31/2023. General and administrative expenses were $81,600,000 for the year ended 12/31/2024, compared with $44,700,000 for the year ended 12/31/2023. The increase of $36,900,000 or 82% was primarily due to: one, a $19,700,000 increase in personnel expenses, including stock based compensation driven by higher headcount and expansion of our sales force in the fourth quarter of twenty twenty three, two, a $7,900,000 increase in legal fees related to our ongoing Eutremia related litigation and three, $6,800,000 increase in commercial expenses in preparation for the potential commercialization of Vitrebia.

In summary, we incurred a net loss for the twelve months ended December 31, 2024 of $130,400,000 or $1.66 per basic and diluted share, compared to a net loss of $78,500,000 or $1.21 per basic and diluted share for the twelve month ended 12/31/2023. With that, I would now like to turn the call back over to Roger.

Thank you, Mike. As you can see, we're well positioned clinically, commercially and financially for the potential launch of our first product based on our proprietary print technology. Which will serve as the growth engine for our continued evolution and inflection. With that, I would now like to open the call for questions. Operator, first question, please.

Thank you. Our first question comes from the line of Julian Harrison with BTIG. Your line is now open.

Roger, you touched on this a little in your prepared remarks. But just wondering if you could talk more about the administrative sequence and timeline to convert etrapia's tentative approvals PAH and PH ILD to full approvals? Yeah. So as we said in in the okay. Thank you, Jillian, and and great to talk to you. So as we said in the opening, we plan to to request final approval in the coming weeks. In the tentative approval label that we received, in August. It was recommended and suggested that we apply for final approval either two or six months ahead of the action date, which would be May 23. Given we view this as a class one resubmission because no new data will be required for, approval. We have been in in concert with the agency working to deliver that letter around the the March 24 time frame so that we can be granted final approval around May 23. And I don't know if that specifically addresses what you're seeking.

Yeah. Absolutely. That's very helpful. Thank you. And then a follow-up, if I may. On l six zero six, curious what the physician feedback has been so far for a lower Cmax broader AUC longer half life alternative to nebulized Tyvaso And then sorry if I missed it. I'm wondering also one specific when specifically you plan to initiate the Phase III RESPIRE trial?

Yeah. Great. And we we're fortunate to have doctor Rajiv Sagar on the call today. So, Rajiv, if you wouldn't mind.

Yeah.

Thanks, Julian, for the question.

So so so first of all, I think, you know, the the current open label study is continues to gate very well. You know, we have we have long term safety data that has accrued since the inception of the study. The what clearer feedback is is twice a day dosing is an absolute game changer. For these patients when you inhale treprostinil. I think that's first and foremost. Second of all, I think that the use of the liposome itself has showcased some, what we believe is some highlights, some impressive safety advantages. And and finally, you know, further reducing the Cmax with the twice a day dosing profile and the sustained release formulation of the liposome itself does we have noted that systemic side effects continue also to be further abated. Even beyond what we initially desired. So I think the combination of of of both of those are gonna be highly encouraging for for as we advance forward with the RESPIRE study. In regards to initiating the RESPIRE study, you know, we're working full steam ahead to to prepare to initiate the study by by year's end. You know, we're we're it's around March right now, and so look forward to, to providing further information as we get closer to that time frame.

Near the end of the year.

Okay. Great. Thank you again, and congrats on all the progress.

Thank you, Julie.

Our next question comes from the line of Jason Gerberry with Bank of America. Your line is now open.

Hey, good morning. This is Bhavan Patel on for Jason. Two questions from us. The first is given the green space in PHILD, what's Liquidia's strategy to drive early market penetration for Eutrebia? Can you share the market marketing differentiation that you plan to promote to doctors? And then given the five zero five b two pathway, should we expect any differences in the label for atropia versus Tyvaso DPI? I know in the past, you've mentioned demonstrating titration to three times higher doses compared to pevaso DPI Yes. I'll answer the second question. First, and then I'll ask Scott Mumar, chief commercial officer, if he would address the, launch dynamics around PH ILD and differentiation. That we intend to emphasize. So so you're a exactly correct, Pavan. I think the label, it is a five zero five b two, so we share obviously, the indication claims and things like that. But where we differ from the the label is in the dose titration table. Because in our study that we used to bridge we showed that we could escalate the doses, as you mentioned, up to three times higher. Than the the target therapeutic dose of the brand. So that will be in the label, and I think it's an important point of differentiation because it's what you know, it's print enabled using our our proprietary print, technology.

To drive the particles to lower airway preferentially and avoid the toxicities associated with upper airway disc. Disposition, you know, it's gonna help us drive a a maximal out for these patients as they continue to progress. And it's gonna and therefore help us, keep those patients on therapy longer is our presumption. So we think these are important and critical aspects If you look across any route of administration across the cyclin, dose matters. And the ability to drive dose usually predicts the sort of therapeutic utility of that therapy. And that's why Tyvaso as labeled has had limitations in dosing, and it's also why other drugs like Uptravi, an oral formulation, which is dose limited, and doceline also has limitations over the long and chronic treatment course of these patients. So lots of opportunity there from us from a labeling and dosing standpoint. Scott, if you could talk a little bit about kind of how we wanna approach this market without giving away the shop too much. Sure.

Good morning. So so you know, if you think about it, we have the usual designation between centers and communities, and we're we're going we are approaching, and we will continue to approach both, especially after launch. And the situation in the centers is that the patients are really flowing in, increasing number of patients flowing in as the awareness of PHILD increases, and we will obviously only add fuel to that fire. So we're in the centers, and we're gonna make sure that we ensure that Eutremia is the first choice prostacyclin for those patients that have PH ILD for a lot of the reasons that Roger just outlined and you've heard us talk about before.

So, you know, we're gonna harvest those patients immediately.

Doing is in the community, and there's many, many patients out there that doctors don't even know exist. They have ILD. The doctors aren't looking for pH. We need to help increase awareness. We need to help increase diagnosis, and then either get that doctor to prescribe or to, refer that patient into one of the centers. And we've actually been doing that over the last six months or year going deeper and deeper into the community, educating on PHILD even before we get on the market, because we know that that's only gonna behoove us once we do get on the market because we do believe we have the the superior product.

Great. Thank you, Scott, so much.

Our next question comes from the line of Serge Belanger with Needham. Your line is now open.

Hi, good morning. A couple commercially related, utripipic questions probably for Scott. [indiscernible] can you remind us the the breakdown between commercial and Medicare coverage for both PAH and PHILD? And then assuming we're we're gonna get a approval here in a couple months, you talk about what you expect in terms of the ramp up in coverage across both commercial and Medicare I guess, the next twelve months or so?

Thanks. Great question. Great question, Serge. It's Scott.

Yeah. Good morning, Serge. So in terms of the breakdown, generally, if think of it as, Medicare is the biggest. So 50% Medicare, probably 30 to 40% commercial, and then the rate the remaining is Medicare, other DOD, etcetera. In terms of the coverage over the first year, I you know, as you probably know, we're not commenting on, you know, our strategies. I will say that have been working with the payers closely for quite some time. And we feel like we have great relationships with us. They have the desire to make sure that, you know, we maximize so we share that desire. And, I think you'll see when we launch that, we're very sound on that front.

Great. Thanks, Scott. Operator, next question.

Our next question comes from the line of Ryan Dushner with Raymond James. Your line is now open.

Hi. Good morning.

Remind us key readouts we should be focusing on for the Ascent [indiscernible] And what specifically we can expect in the data coming at ATS? And then I have a follow-up. Yes. Thank you, Rajeev, if you wouldn't mind answering that one.

Yeah. Thanks, Ryan. So, you know, as as Roger talked about in the prepared remarks today, one of the highlights that we spoke about was the the walk effect that was observed in the first twenty patients treated within eight weeks which was which showed an observed mean improvement of around 26.4 meters. I think that, first and foremost, highlights a few key key processes. First, that we can get patients to what we believe is even a new therapeutic goal that surpasses the traditional nine to twelve breaths that have typically been the the of the ceiling effect of Tyvaso since 02/2009. We've highlighted that we're able to achieve doses in the overwhelming majority of patients by week eight that's equivalent to greater than greater than 50 greater or equal to 15 breaths by this time. So we can get patients up to what we believe is a very dose and even higher. At an earlier time point and then allow further titration to further doses to stabilize the patient and plateau them out. So I think that's what's gonna be quite encouraging. At ATS, we're going to showcase more regarding the the datasets, regarding how we how we dose the patients.

We're gonna talk a little bit about our effects in terms of some some quality of life questionnaires as well. And in the future, our plan is to as as we've talked about, the SENSE study will be fully enrolled within the next few weeks here. We're really excited about that. And then we we do plan to prepare and submit for the final data set later in the year and present that at at a major respiratory conference in the future.

Great. Thank you, Rajeev.

That's helpful. Thank you very much. And and will you be doing additional hiring for the commercial field team after potential approval in both indications is confirmed?

And and what what is the status of the current field team with regards to both hiring and training? Thank you.

Yes. Scott, if you wouldn't mind. Yeah. Sure. So the status I'll start with that one. The status of the the current sales team is, they're they're locked and loaded and ready We've had the team on board for fourteen months now, and and these were experienced, mostly PH, all rare disease, folks to begin with. And so they've been out in the field strengthening relationships They've been training, training, training. They are absolutely ready to go and very, very excited. On the future front, we we actually just, went through another exercise over the course of the last few months take a look at our our our Salesforce sizing strategy. We we we think we're well suited to, to launch. As I mentioned, earlier. We will take another look at that once we get out and start to understand sort of the you know, the sensitivity, factor for the number of reps, and then, you know, we'll look at potentially, expanding if that makes sense, in in in the future.

Another thing I'd add I I would add we we are adequately sized for launch in in May in both indications. And then as Scott said, obviously, as we continue to build and present the unique benefits of utremia, I think they wanna articulate that even broader so, you know, we could upsize our Salesforce probably in 26 time frame if necessary. So operator, is there another question?

Our next question comes from the line of Greg Harrison with Scotiabank. Your line is now open.

Hey, good morning, guys. Thanks for taking the question.

Wondering if you can comment on your updated cash runway following your recent financing. And and what assumptions go into that estimate that you could reach profitability with your your current balance sheet? And then if you could also comment on which factors play into your decision on pricing given your view of Utopia's profile relative to the competitor?

Thanks. Great. I think both of those questions are would be well answered by by Mike.

Yeah, Greg. Great to talk to you again. As it relates to runway, as we said, you know, with this hundred million dollars of additional financing from HealthCare Royalty, 25,000,000, we've we've received, we received at closing. 50,000,000 will be received, upon first commercial sale of [indiscernible] And the final 25,000,000 will be at mutual option, once we reach a cumulative $100,000,000 in net sales of Eutropia. I think it's pretty simple. We have we're we're very excited about the launch of Eutrebia. As, you know, Roger said and Scott have said, we are, you know, fully ready from a commercial readiness point of view. From a supply point of view, we feel very bullish about our ability to launch this successfully, and we feel that if you know, assuming, as as Roger said, we file for full approval here coming up, we get full approval, on or near the expiration of the exclusivity date. We feel confident if we we hit our goals and hit our targets that we could be profitable on current balance sheet and, you know, and, like I said, fully support the l six zero six program. All of our, you know, phase four studies we're doing on neutropenia, while also the the, you know, ongoing commercial readiness.

So we're very excited. We're very confident. Very happy to have a great partner like HealthCare Royalties. You know, on this journey, and and we look forward to launch. As to the second question, you know, you know, we're we're not gonna talk about pricing strategy. I I think what I would say is as we've demonstrated or continue to demonstrate and and what we feel our ascent results on only reinforce that, that we feel that we have a superior product profile. And based on that, we wanna make sure that we are always balancing patient access while also fulfilling the value proposition that Utopia can bring. So not gonna talk specifically about, you know, pricing strategies in totality, but I think we're very confident as we come to market that we will have the right strategy to make sure that patients have choice as we move forward.

Great. That's helpful. Thanks so much. Thanks for the question, Greg. Operator, next question.

Our next question comes from the line of Corey Juvenville with LifeSci Capital. Your line is now open.

Good morning and thanks for taking our questions and congrats on this new data with the science, really exciting. You know, just kind of following the theme of more drug is better. I recognize that sample size here might be is still relatively small, but have you had any type of dose response among patients You know, are those who are reaching two to three fold the Tyvaso equivalent dose achieving better outcomes than those in the study who might be, you know, kind of in the lower range equivalent to the existing standard of care. And and this also might be a naive question, but is it possible to get these efficacy data on label? And how would you go about marketing marketing the six minute walk to to prescribers post approval?

Yeah. I'll take the second question, and then Rajiv can say what he can. Can about the the dose versus effect curve. So it's not the data is would not be available for indication claims. Per se because it's an open label safety study. I think it would be part of a annual update to the label once approved where we could update the clinical pharmacology section to to to describe the data both in terms of safety and potentially in terms of efficacy. But, again, that's a negotiation with the FDA about what we could could then include in the clinical pharmacology section of the label. So I'll I'll reserve sort of commitment on that, and we'll we'll do the best we can to get it in there. But I think you know, certainly, we will abstract and then publish the data. And I think as as we're seeing, there's tremendous inbound interest based on what we're we're at.

Describing and there's there's over 20 doctors doing this current ASCENT study. Many of them are the are the seminal thought leaders. And I think the fact that they're doing the study and we're seeing the the results that we're seeing going to help highlight the data when they lead panel sessions, etcetera, because now they're seeing the true value of print as it relates to the. So and then I will just comment on on dose response. I turn it over to Rajeev. It's very hard in a small sample of patients to show dose response, frankly. Plus, we're allowing patients to individually titrate to dose, so we're not sort of predefining what dose level patients should titrate to and then measuring that versus effect. So it's a continuum. So that's a different difficult paradigm to show a dose response in. But, Rajeev, I don't know if you have additional comment Yeah, Pourri. I think I think just I think a few things to to highlight. First of all, the patients that we're rolling in ASCENT are are quite heterogeneous. We purposely designed the study to showcase safety and tolerability of utopia. So we not only include patients with mild hemodynamic limitations with their pulmonary hypertension, but also patients with severe hemodynamic impairments with various levels of complexity with the interstitial lung disease.

And their respiratory physiological impairments. But I but I think despite that heterogeneity, think what the data is showing, despite, you know, these small numbers, but even though, as you know, the study continues to enroll in continue to highlight a few things. Number one, clearly, the low resistance inhaler combined with our print formulation is absolutely allowing these patients to titrate [indiscernible] to what I believe are actually new therapeutic levels And that's very important because it's well known that prostinoid therapies are titratable It is dose related, so it tends to effects tend to improve as dose is escalated. The problem with current therapies on the market, including oral and systemic parenteral therapies, is that they're just significantly limited by terrible systemic side effects, especially in the oral therapies with the GI side effects that of course, the parenterals with indwelling lines or subcutaneous complications. I think with the current inhaled therapies on the market today, we know that at least in the INCREASE study, what was very interesting relative to the SENSE study is by eight weeks, only fifty percent of the patients in the 10 to 12 breath levels versus in the SENSE study despite the heterogeneity in the patient population, we're able to get patients the overwhelming majority patients, up to more than or equal to 15 breath equivalents.

So again, I think that what the ASCENT data is gonna show at ATS what KOLs are gonna see is that this that eutropia is very well tolerated and titratable, and that they can customize to whatever needs their patients have with both PAH and PHLD in the very near future.

And, Corey, that's a great answer, Rajeev. Thank you. I think one way we're gonna take on this dose issue directly is we're gonna do a directed transition study from patients on Tyvaso and Tyvaso DPI. That are underserved by those therapies, probably because of dose limitations. We'll transition them to utremia. Improve their dose, and then if we show, therefore, an improved outcome, we've shown not only is dose related to outcome, but we've also differentiated the products even in a in a different way and a helpful way for Atrebia. So look for that study to start up in the near future as well. So, operator, next question, please.

Thank you. And I'm currently showing no further questions at this time. I'd like to hand the call back over to Roger Jeff for closing remarks.

Thank you very much. So we really appreciate everyone joining us joining us today, and we we forward to speaking to you again. Again soon. Bye bye.

This concludes today's conference call. Thank you for your participation. You may now disconnect.