Liquidia Reports Third Quarter 2020 Financial Results and Provides Corporate Update

11/9/20

RESEARCH TRIANGLE PARK, N.C., Nov. 09, 2020 (GLOBE NEWSWIRE) -- Liquidia Technologies, Inc. (NASDAQ: LQDA), a late-stage clinical biopharmaceutical company focused on the development and commercialization of novel products using its proprietary PRINT® technology, today reported financial results for the third quarter ended September 30, 2020 and provided a corporate update.

“Despite the ongoing COVID-19 pandemic, we continue to make progress in defending our right to bring LIQ861 forward for patients, while also making significant strides to advance our mission through an improved balance sheet, cash runway, and intellectual property position with respect to dry powder inhaled treprostinil. These are all important achievements as we move closer to the potential approval and long-term commercialization of LIQ861.” said Neal Fowler, Chief Executive Officer of Liquidia. “Recent events, including the unsolicited proposal to license LIQ861, have reinforced our resolve to bring LIQ861 to the PAH community and renewed our belief that this innovative treatment and the proposed RareGen merger will benefit patients and bring value to our company and its stockholders.”

Corporate Update:

  • Raised $75 Million in Gross Proceeds from Public Offering to Strengthen Balance Sheet
    Closed underwritten public offering of 9,375,000 shares of common stock at a public offering price of $8.00 on July 2, 2020, generating net proceeds of approximately $70.3 million, which further augments the Company’s balance sheet in advance of potential U.S. Food and Drug Administration (FDA) approval of LIQ861.
  • Completed Chief Financial Officer Transition and Initiated Optimization of Financial OperationsCompleted a transition of Chief Financial Officer responsibilities to Steven Bariahtaris as interim Chief Financial Officer in August 2020. Following his appointment, Mr. Bariahtaris and the finance team enhanced the Company’s financial planning and budget controls and initiated a process of implementing a more cost-efficient operating plan to further improve the Company’s cashflow into 2022.
  • Bolstered LIQ861 Intellectual Property Position Received a Notice of Allowance from the U.S. Patent and Trademark Office (USPTO) for patent application No. 16/099,135 (’135) in August 2020 related to LIQ861 covering methods of treating pulmonary hypertension (PH) with doses between about 100 micrograms to about 300 micrograms of dry powder treprostinil. The patent will substantially strengthen Liquidia’s intellectual property position with respect to dry powder inhaled treprostinil and represents an important milestone for LIQ861 on its path to potential commercialization. Of note, greater than 70 percent of patients who have been enrolled in the INSPIRE and extension studies titrated to LIQ861 doses of 100 micrograms or more. For context, pharmacokinetic studies demonstrated that the 79.5 mcg dose of LIQ861 correlates with nine breaths of Tyvaso (54 mcg), the maximum recommended label dose of Tyvaso. The patent, which is expected to be issued in the fourth quarter of 2020, should have a term that expires no earlier than 2037.
  • Defended Right to Advance LIQ861 as an Innovation for PatientsContinued to vigorously defend patent positions in order to bring the innovation of dry powder treprostinil to patients.

Defended against assertion of infringement. In July 2020, Liquidia filed its answer to the complaint filed by United Therapeutics Corporation (UTC) in June 2020 against Liquidia under the Hatch-Waxman Act in the U.S. District Court for the District of Delaware (the “Delaware District Court”). The Company’s answer included counterclaims of invalidity, non-infringement, and Orange Book de-listing of two UTC patents related to the manufacturing of treprostinil. As background, the complaint asserts infringement of U.S. Patent(s) 9,593,066 (the “‘066 patent”) and 9,604,901 (the “‘901 patent”) allegedly relating to UTC’s Tyvaso®, which triggered a statutory 30-month stay on the regulatory approval of the LIQ861 new drug application (NDA) currently under review by the FDA.

Also in July 2020, the Company responded to the filing of an amended complaint by UTC asserting infringement of an additional recently issued U.S. Patent No. 10,716,793 (the “‘793 patent”). The allegations of infringement of the ‘793 patent should have no effect on the FDA’s review of the LIQ861 NDA and is not associated with the 30-month regulatory stay. Importantly, Judge Andrews, presiding over the Hatch-Waxman litigation, recently denied UTC’s motion to dismiss Liquidia’s invalidity defenses and counterclaims concerning the ‘793 patent.

In July 2020, Judge Andrews set a claim construction hearing in May 2021 and set the trial to begin in March 2022. Liquidia remains confident that its arguments and defenses to be made in Delaware District Court will result in a favorable outcome and pave the way to bring LIQ861 forward for patients in need. The 30-month stay expires on the earlier of October 24, 2022 or resolution of the litigation in Liquidia’s favor, whichever occurs first.

Petition for Inter Partes Review. At the end of March 2020, Liquidia filed two petitions with the Patent Trial and Appeal Board (PTAB), of the USPTO for inter partes review (IPR) of the ‘901 patent and ‘066 patent seeking a determination that the claims in both patents are invalid. In October 2020, the PTAB instituted an IPR against the ’901 patent and concurrently denied institution on the ‘066 patent. The Company expects a final decision by the PTAB on the ‘901 patent by October 2021. A favorable decision invalidating the ‘901 patent may be considered by the court in concurrent patent litigation under the 30 month stay.

  • Advanced Efforts in Support of the Proposed RareGen, LLC Merger and IntegrationThe proposed acquisition of RareGen, LLC (“RareGen”) reinforces Liquidia’s commitment to the PAH community and Liquidia’s continued pursuit to address the unmet needs of patients and the healthcare professionals who treat them. The potential introduction of LIQ861 as a more convenient inhaled treprostinil over the currently available inhaled option, combined with RareGen’s parenteral treprostinil option, emphasize Liquidia’s commitment to addressing the patient continuum of treatment. In addition, these combined entities further enhance the organization’s knowledge base, customer reach and commercial planning in preparation for the potential launch of LIQ861, if approved. The special meeting of Liquidia stockholders to consider the RareGen merger and related matters is scheduled for November 13, 2020.

Third Quarter 2020 Financial Results

As of September 30, 2020, cash totaled $79.6 million. On July 2, 2020, the Company completed an underwritten public offering of 9.375 million shares at a price of $8.00 per share, resulting in gross proceeds of $75.0 million and net proceeds of approximately $70.3 million. The company has begun to implement a more cost-efficient operating plan and estimates that its cash will be sufficient to fund its operating plan into 2022. In addition, a successful close of the RareGen acquisition has the potential to improve the Company’s cash runway going forward.

  • Research and Development (R&D): R&D expenses were $7.7 million for the third quarter of 2020 compared with $10.9 million for the same period of 2019. The decrease of $3.3 million was primarily driven by a decrease in clinical trial related expenses.
  • General and Administrative (G&A): G&A expenses were $7.2 million for the third quarter of 2020, compared with $2.4 million for the same period of 2019. The increase of $4.8 million was primarily due to an increase of $2.8 million expenses related to the RareGen acquisition and other legal expenses, $1.1 million in compensation and consulting expenses, and $0.9 million of reclassified spending from R&D to G&A.
  • Interest Income: Interest income was $35,000 for the third quarter of 2020, compared with $162,000 for the same period of 2019.
  • Interest Expense: Interest expense was $191,000 for the third quarter of 2020, compared with $265,000 for the same period of 2019.
  • Net Loss: Net loss was $15.0 million for the third quarter of 2020, compared with $13.4 million for the third quarter of 2019. The increase of $1.5 million was primarily due to an increase in G&A expenses, partially offset by a decrease in R&D expenses.

About Liquidia

Liquidia is a late-stage clinical biopharmaceutical company focused on the development and commercialization of novel products using its proprietary PRINT® technology to transform the lives of patients. PRINT is a particle engineering platform that enables precise production of uniform drug particles designed to improve the safety, efficacy and performance of a wide range of therapies. Currently, Liquidia is focused on the development of two product candidates for which it holds worldwide commercial rights: LIQ861 for the treatment of pulmonary arterial hypertension (PAH) and LIQ865 for the treatment of local post-operative pain. Liquidia is headquartered in Research Triangle Park, NC. For more information, please visit www.liquidia.com.

About RareGen
RareGen is a portfolio company of PBM Capital Group, a healthcare investment firm. RareGen provides strategy, investment, and commercialization for rare disease pharmaceutical products. RareGen has a national sales force focused on cardiology and pulmonology specialties.

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