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Good morning. And welcome everyone to Liquidia Corporation Full Year 2024 Financial Results and Corporate Update Conference Call. My name is Shannon, and I will be your conference operator today. Currently all participants are in a listen-only mode. Following the presentation, we will conduct the question-and-answer session. Instructions will be provided at that time for you to queue up for questions. I would like to remind everyone that this conference call is being recorded. I will now hand the call over to Jason Adair, Chief Business Officer.

Thank you, Shannon. It's my pleasure to welcome everybody today to the Liquidia Corporation full year 2024 financial results and corporate update call. Joining the call today are Chief Executive Officer, Dr. Roger Jeffs; Chief Operating Officer and CFO, Michael Kaseta; Chief Medical Officer, Dr. Rajeev Saggar; Chief Commercial Officer, Scott Moomaw; 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 Web site. I'd now like to turn the call over to Roger for our prepared remarks, after which he will open the call for your questions. Roger?

Thank you, Jason. Good morning, everyone. And thank you for joining us today. We believe that 2025 has the potential to be a transformational year for the company as we further build upon the success of 2024, which resulted in the broadening of the tentatively approved label for YUTREPIA to include both the treatment of patients with pulmonary arterial hypertension or PAH and pulmonary hypertension associated with interstitial lung disease or PH-ILD. 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 YUTREPIA in both PAH and PH-ILD as soon as possible after [indiscernible] [getting] clinical exclusivity on May 23rd or just 65 days from now. Secondly, we continue to advance the clinical profile of YUTREPIA to position that it's not only the best-in-class inhaled prostacyclin but also the first in choice prostacyclin for all patients in need to enroll or inhaled prostacyclin who remain underserved by current alternatives. Third, building upon our commercial and medical prowess to compete fiercely to capture 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 PAH space by continuing to leverage our development expertise to advance treatment options that have the potential to further improve the lives of patients like our Phase III ready next-gen sustained release prostacyclin therapy L606. I'd like to take a few minutes to expand on each of these strategic goals. With regard to the first imperative of seeking to launch YUTREPIA into the marketplace as soon as possible, I'm happy to say that based on the favorable legal decisions over the last few years, there are no legal barriers that currently impact the FDA's ability to issue final approval of YUTREPIA after May 23rd when the 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 barriers. In our case, the sole barrier identified by the FDA was the new clinical exclusivity granted to TYVASO DPI, which expires on May 23, 2025. As directed in the tentative approval label, we plan to submit the request for final approval in the coming weeks. With regard to the second imperative we're continuing to advance our studies to establish the clinical profile of YUTREPIA. The medical community's interest in YUTREPIA is increasing, with particular interest in the data being generated from our ASCENT trial, the open label safety study of YUTREPIA in PH-ILD patients. I'm happy to report that we are 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 to escalating doses of YUTREPIA. As a reminder, at the J.P. Morgan Healthcare Conference in January, we shared the dosing and tolerability profile for the first 20 patients that completed eight weeks of treatment. We noted that the PH-ILD patients on YUTREPIA were able to titrate to dose that are 3 times the comparable therapeutic target of nebulized TYVASO. 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 distance 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 III registrational study of nebulized TYVASO and PH-ILD patients, the INCREASE study, active group patients had an observed mean improvement of six minute walk distance of 16 meters at week eight and 22 meters at week 16. We are highly encouraged by this early efficacy data from ASCENT as it demonstrates that YUTREPIA posts key therapeutic attributes in PH-ILD 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 DPI and the like sample of treatment naive PH-ILD patients at the National Jewish Health Center that we have discussed previously where 69% of patients discontinued therapy after a median time of only 40 days with drug related AEs, especially cough and clinical worsening listed as the primary reasons for discontinuation of TYVASO DPI. We look forward to highlighting a more robust data set 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 prowess, 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 with our healthcare providers and our understanding of the unmet needs of PAH and PH-ILD patients throughout the country. We are prepared to provide a seamless service to patients and providers upon launch of YUTREPIA and look forward to educating the PAH and PH-ILD communities on the favorable and potentially game changing product attributes of [YUTREPIA]. Lastly, as we look at our fourth imperative to innovate and develop better therapeutic options, we continue to advance L606, our sustained release liposomal formulation of treprostinil that provides more consistent 24 hour drug exposure and two 12 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 non-invasive 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 YUTREPIA in the coming months that we decided to further strengthen our balance sheet as announced yesterday with an extension of our valued partnership with HealthCare Royalty Partners that Mike will speak about now along with an overview of our 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 million of financing in three tranches, including the $25 million tranche funded at closing. We are grateful for the trust, commitment and confidence that HealthCare Royalty Partners has demonstrated over the years and we are optimistic that these proceeds and a successful launch of YUTREPIA 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 million for the year ended December 31, 2024 compared with $17.5 million for the year ended December 31, 2023. Revenue related primarily to the promotion agreement. The decrease of $3.5 million 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 $5.9 million for the year ended December 31, 2024 compared with $2.9 million for the year ended December 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 2023. Research and development expenses were $47.8 million for the year ended December 31, 2024 compared with $43.2 million for the year ended December 31, 2023. The increase of $4.6 million or 11% was primarily due to: one, a $6.1 million increase in expenses related to our L606 program; two, a $5.3 million increase in expenses related to YUTREPIA research and development activities, including the ASCENT trial; three, a $5.1 million increase in personnel expenses, including stock based compensation related to increased headcount; and four, a $3.5 million upfront license fee due to Pharmosa for the exclusive license in Europe to develop and commercialize L606 recorded during the year ended December 31, 2024, offset by: one, $5.1 million in lower commercial manufacturing expenses reflecting the impact of expensing YUTREPIA inventory costs in the prior year; and two, a $10 million upfront license fee due to Pharmosa for the exclusive license in North America to develop and commercialize L606 during the year ended December 31, 2023. General and administrative expenses were $81.6 million for the year ended December 31, 2024 compared with $44.7 million for the year ended December 31, 2023. The increase of $36.9 million or 82% was primarily due to: one, a $19.7 million increase in personnel expenses, including stock based compensation, driven by higher headcount and expansion of our sales force in the fourth quarter of 2023; two, a $7.9 million increase in legal fees related to our ongoing YUTREPIA related litigation; and three, a $6.8 million increase in commercial expenses in preparation for the potential commercialization of YUTREPIA. In summary, we incurred a net loss for the 12 months ended December 31, 2024 of $130.4 million or $1.66 per basic and diluted share compared to a net loss of $78.5 million or $1.21 per basic and diluted share for the 12 months ended December 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. I would now like to open the call for questions. Operator, first question please.

[Operator Instructions] Our first question comes from the line of Julian Harrison with BTIG.

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 YUTREPIA's tentative approvals in PAH and PH-ILD to full approvals?

So as we said in the opening, we plan 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 23rd, given we view this as a Class 1 resubmission because no new data will be required for approval. We have been in concert with the agency working to deliver that letter around the March 24th time frame so that we can be granted final approval around May 23rd. I don't know if that specifically addresses what you're seeking.

And then a follow-up, if I may, on L606. I'm 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 when specifically you plan to initiate the Phase III of INSPIRE trial?

We're fortunate to have Dr. Rajeev Saggar on the call today. So Rajeev, if you wouldn't mind?

So first of all, I think the current open label studies continues to gate very well. We have long term safety data that has accrued since the inception of the study. What -- clear feedback 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 finally, 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 both of those are going to be highly encouraging for -- as we advance forward with the INSPIRE study. In regards to initiating the INSPIRE study, we're working full steam ahead to prepare to initiate the study by year's end. We're -- it's around March right now and so we look forward to providing further information as we get closer to that time frame near the end of the year.

Our next question comes from the line of Jason Gerberry with Bank of America.

This is [Bhavan Patel] on for Jason. Two questions from us. The first is given the green space in PH-ILD, what's Liquidia's strategy to drive early market penetration for YUTREPIA? Can you share the marketing differentiation that you plan to promote to doctors? And then on -- given the 505(b)(2) pathway, should we expect any differences in the label for YUTREPIA versus TYVASO DPI? I know in the past you've mentioned demonstrating titration to 3 times higher doses compared to TYVASO DPI.

So I'll answer the second question first and then I'll ask Scott Moomaw, our Chief Commercial Officer, if he would address the launch dynamics around PH-ILD and differentiation that we intend to emphasize. So you're exactly correct, [Bhavan], I think the label -- it is a 505(b)(2), so we share obviously the indication claims and things like that. But where we defer from 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 3 times higher than 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 -- it's PRINT enabled using our proprietary PRINT technology to drive the particles to the lower airway preferentially and avoid the toxicities associated with upper airway deposition. It's going to help us drive a maximal outcome for these patients as they continue to progress 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 of prostacyclin 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 is also why other drugs like UPTRAVI, an oral formulation, which is dose limiting and dose ceiling 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. So Scott, if you could talk a little bit about kind of how we want to approach this market without giving away the shop too much?

So if you think about it, we have the usual designation between centers and communities and 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. There's an increasing number of patients flowing in as the awareness of PH-ILD increases and we will obviously only add fuel to that fire. So we're in the centers and we're going to make sure that we ensure that YUTREPIA 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 we're going to harvest those patients immediately [Technical Difficulty] 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 PAH. 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 a year going deeper and deeper into the community, educating on PH-ILD even before we get on the market, because we know that that's only going to behoove us once we do get on the market, because we do believe we have the superior product.

Our next question comes from the line of Serge Belanger with Needham.

A couple of commercially related YUTREPIA questions probably for Scott. Just can you remind us the breakdown between commercial and Medicare coverage for both PAH and PH-ILD? And then assuming we're going to get approval here in a couple of months. Can you talk about what you expect in terms of the ramp up in coverage across both commercial and Medicare, I guess, over the next 12 months or so?

So in terms of the breakdown, generally think of it as Medicare is the biggest, so 50% Medicare, probably 30% to 40% commercial and then the remaining is Medicare, other DoD, et cetera. In terms of the coverage over the first year, as you probably know, we're not commenting on our strategies. I will say that we 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 we maximize access so we share that desire, and I think you'll see when we launch that we're very sound on that front.

Our next question comes from the line of Ryan Deschner with Raymond James.

Can you remind us what key readouts we should be focusing on for the ASCENT study and what specifically we can expect in the data coming at ATS? And then I have a follow-up.

Rajeev, if you wouldn't mind answering that one.

So as Roger talked about in the prepared remarks today, one of the highlights that we spoke about was the walk effect that was observed in the first 20 patients treated within eight weeks, which was -- which showed an observed mean improvement of around 26.4 meters. And I think that first and foremost highlights a few key processes. First that we can get patients to what we believe is even a new therapeutic goal that surpasses the traditional nine to 12 breaths that have typically been sort of the ceiling effect of TYVASO since 2009. And 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 or equal to 15 breaths by this time. So we can get patients up to what we believe is a very effective 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 going to be quite encouraging. At ATS, we're going to showcase more regarding the datasets, regarding how we dose the patients. We're going to talk a little bit about our effects in terms of some quality of life questionnaires as well. And in the future, our plan is to -- as we've talked about, the ASCENT study will be fully enrolled within the next few weeks here. So we're really excited about that. And then we do plan to prepare and submit for the final data set later in the year and present that at a major respiratory conference in the future.

And will you be doing additional hiring for the commercial field team after potential approval in both indications is confirmed? And what is the status of the current field team with regards to both hiring and training?

So Scott, if you wouldn't mind?

I'll start with that one. The status of the current sales team is they're locked and loaded and ready. We've had the team on board for 14 months now and these were experienced mostly PAH, 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 actually just went through another exercise over the course of the last few months to take a look at our our sales force sizing strategy. We think we're well suited to launch, as I mentioned earlier. We will take another look at that once we get out and start to understand sort of the sensitivity factor for the number of reps and then we'll look at potentially expanding, if that makes sense, in the future.

Another thing I would add is, we are adequately sized for launch in both indications. And then as Scott said, obviously, as we continue to build and present the unique benefits of YUTREPIA, I think we want to articulate that even broader. So we could upsize our sales force probably in the '26 time frame if necessary.

Our next question comes from the line of Greg Harrison with Scotiabank.

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

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

As it relates to runway, as we said, with this $100 million of additional financing from HealthCare Royalty's $25 million we received at closing, $50 million will be received upon the first commercial sale of YUTREPIA and the final $25 million will be at mutual option once we reach a cumulative $100 million in net sales of YUTREPIA. I think it's pretty simple. We have -- we're very excited about the launch of YUTREPIA. As Roger said and Scott has said, we are 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 assuming, as Roger said, we file for full approval here coming up, we get full approval on or near the expiration of the exclusivity date. And we feel confident if we we hit our goals and hit our targets that we can be profitable on this current balance sheet and, like I said, fully support the L606 program, all of our Phase 4 studies we're doing on YUTREPIA while also the ongoing commercial readiness. So we're very excited. We're very confident. We're very happy to have a great partner like HealthCare Royalty on this journey and we look forward to launch. As to the second question, we're not going to talk about pricing strategy. I think what I would say is as we've demonstrated or continue to demonstrate and what we feel our ASCENT -- early results on ASCENT only reinforce that, that we feel that we have a superior product profile. And based on that we want to make sure that we are always balancing patient access while also fulfilling the value proposition that YUTREPIA can bring. So we're not going to talk specifically about 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.

Our next question comes from the line of Cory Jubinville with LifeSci Capital.

Congrats on this new efficacy data with ASCENT, it's really exciting. Just kind of following the theme of more drug is better, I recognize that the sample size here is still relatively small. But have you had any type of dose response among patients? Are those -- who are reaching two to three fold the TYVASO equivalent dose achieving better outcomes than those in the study who might be kind of in the lower range equivalent to the existing standard of care? 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 the six minute walk to prescribers post approval?

I'll take the second question and then Rajeev can say what he can about the dose versus effect curve. So it's not -- the data 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 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 then include in the clinical pharmacology section of the label. So I'll reserve sort of commitment on that and we'll do the best we can to get it in there. But I think certainly we will abstract and then publish the data. And I think as we're seeing, there's tremendous inbound interest based on what we're describing. And there's over 20 doctors doing this current ASCENT study, many of them are the seminal thought leaders. And I think the fact that they're doing the study and we're seeing the results that we're seeing is going to help highlight the data when they lead panel sessions, et cetera, because now they're seeing the true value of PRINT as it relates to YUTREPIA. And then I will just comment on dose response before 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 the dose. So we're not sort of pre-defining what dose level patients should titrate to and then measuring that versus effect. So it's a continuum. So that's a difficult paradigm to show dose response in. But Rajeev, I don't know if you have additional comment there.

I think just -- I think a few things to highlight. First of all, the patients that we're rolling in ASCENT are quite heterogeneous. We purposely designed the study to showcase safety and tolerability of YUTREPIA. So we not only include patients with mild hemodynamic limitations with their palmar hypertension but also patients with severe hemodynamic impairments with various levels of complexity with the interstitial lung disease and the respiratory physiological impairments. But I think despite that heterogeneity, I think what the data is showing, despite these small numbers but even though the study continues to enroll and 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 YUTREPIA to again to what I believe are actually new therapeutic levels. And that's very important, because it's well known that prostanoid 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 and, 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 ASCENT study is, by eight weeks, only 50% of the patients in the TYVASO nebulized study for increase with PH-ILD were able to reach the 10 to 12 breath levels versus in the ASCENT study despite the heterogeneity in the patient population we're able to get patients the overwhelming majority of patients up to more than or equal to 15 breath equivalents. So again, I think that what the ASCENT data is going to show at ATS and what KOLs are going to see is that this -- that YUTREPIA is very well tolerated and titratable and that they can customize to whatever needs their patients have with both PAH and PH-ILD in the very near future.

I think one way we're going to take on this dose issue directly, we're going to do a directed transition study from patients on TYVASO and TYVASO DPI that are underserved by those therapies and probably because of those limitations, we'll transition them to YUTREPIA, improve their dose and then -- and 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 different way and a helpful way for YUTREPIA. 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 Jeffs for closing remarks.

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