Liquidia Corp.’s (NASDAQ:LQDA)

Analysts believe that Liquidia Corp.’s (NASDAQ:LQDA) 29% decline following a judge’s decision to grant a stay request on the ‘793 patent while an appeal of the PTAB’s judgment is underway is greatly exaggerated.

Despite the unfavorable headline, according to BofA analyst Greg Harrison, “we do not view the stay denial as a substantial setback for Liquidia given that the ‘793 patent has already been invalidated in the IPR procedure and that the H-W ruling is likely later this year.”

After a court found in the company’s favor in a patent dispute with United Therapeutics, Recall LQDA rose 45% on July 19. (NASDAQ:UTHR). One to eight of the ‘793 United Therapeutics patents have been determined to be unpatentable, according to the U.S. Patent Trial and Appeal Board.

Harrison, who has a buy rating and a $14 price target on LQDA, wrote in the note: “We would further argue that even in the case of a negative decision on ‘793, the stock appears inexpensive to us since IPR decisions are seldom overturned, which would still allow for a Yutrepia launch in 2024.”

Outlook

Julian Harrison, a BTIG analyst, also stated that the judge’s decision to grant a stay did not alter the Liquidia thesis (NASDAQ:LQDA). Harrison from BTIG rates the stock as a buy with a $17 price target.

Remember how the FDA gave Liquidia’s (NASDAQ:LQDA) Yutrepia inhalation powder preliminary approval in November to treat pulmonary arterial hypertension? The regulatory stay will expire on October 27 before the FDA can award Yutrepia its final approval. 

In two of the three potential outcomes, BofA’s Harrison expects a “substantial upside” for Liquidia (NASDAQ:LQDA) shares, which are now trading below $6. If LQDA wins on the ‘066 and ‘793 patents in the H-W case, a launch would probably occur late this year, and Liquidia would have an NPV of $16. This is the most positive scenario. The launch would probably take place after an IPR appeal for ‘793, which would be about 2024 and result in an $11 NPV if Liquidia wins on ‘066 and loses on ‘793. There would probably be a decline in valuation from current levels if LQDA lost on ‘066 and had to wait until 2028 to launch Yutrepia.

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