Liquidia is Downgraded by Wedbush Following the Court’s Decision On the Principal Asset


Update on the Hatch-Waxman litigation via Liquidia

Liquidia Corporation (NASDAQ:LQDA)

Liquidia Corporation (NASDAQ:LQDA), a commercial-stage biopharmaceutical company, recorded a 12% decline in pre-market trading on Thursday after Wedbush downgraded its stock from Neutral to Underperform, citing a delay in the commercial launch of Yutrepia, its key asset, as a result of a recent court ruling.

Yutrepia, a generic version of United Therapeutics’ pulmonary arterial hypertension (PAH) treatment Tyvaso, received provisional FDA approval in November 2021. (UTHR). The outcome of LQDA’s ongoing Hatch-Waxman Litigation with UTHR about the patent rights for Tyvaso will determine the eventual approval and commercial launch of Yutrepia.

According to Wedbush analysts Liana Moussatos and Andreas Argyrides, a U.S. District Court Judge ruled against LQDA on the ‘793 patent and in favor of it on the ‘066 patent on Wednesday. Both businesses are likely to appeal this split ruling.

“United has requested a rehearing of the ‘793 IPR judgment and is likely to appeal if the PTAB decision is not reversed,” the team continued. They extended the anticipated deadline for full approval and the U.S. launch of Yutrepia from November 2022 to mid-2024.

Wedbush lowered the LQDA 12-month price objective from $4 per share to $3 per share, noting that the delay would let UTHR get a jump on the competition by bringing on more patients under Tyvaso DPI and allow other PAH candidates like Merck’s (MRK) sotatercept to disrupt the market.

Despite the court’s judgment in favor of the ‘793 patent, Bank of America retained its underperforming rating on UTHR, pointing out that in a prior IPR in July, the Patent Trial and Appeal Board (PTAB) had determined that the patent was invalid.

After the PTAB effectively rejected United’s ‘901 patent last October, the analysts under the direction of Geoff Meacham claimed that the patent “066 had been the major obstacle to stopping Yutrepia from entering the market.”

Sotatercept, a Phase 3 PAH candidate, was held by Merck (MRK) after its $11.5 billion acquisition of Acceleron Pharma in 2021.

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