Good morning, and welcome everyone to the Liquidia Corporation Full- Year 2021 Financial Results and Corporate Update Conference Call. My name is Josh, and I will be your conference operator today. Currently, all participants are in a listen-only mode. Following the presentation, we will conduct a question-and-answer session. Instructions will be provided at that time for you to queue up for questions. If anyone has any difficulties hearing the conference, please press star zero for operator assistance at any time. I would like to remind everyone that this conference call is being recorded. I will now hand the call over to Jason Adair, Senior Vice President, Corporate Development and Strategy.
Thank you, Josh. It's my pleasure to welcome everyone to today's call to discuss our full- year results for 2021 and provide a business update. Before we begin, I'd like to remind everyone that today's call will contain forward-looking statements based on current expectations. Such statements may involve risks and uncertainties that may cause actual results to differ materially from these stated expectations. For further information on the company's risk factors, please see Liquidia's filings with the Securities and Exchange Commission at www.sec.gov or on Liquidia's website at liquidia.com. Joining the call today are Chief Executive Officer Roger Jeffs, Chief Financial Officer Michael Kaseta, Senior Vice President and General Counsel Rusty Schundler, and other members of Liquidia Management. I would 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, and good morning, everyone. It's a pleasure to be speaking with you today. 2021 was a banner year for Liquidia, a year that focused on optimizing the company's core initiatives as we begin to focus our full efforts towards launch of YUTREPIA at the end of this year. 2021 included multiple major accomplishments. Some highlights are, firstly, in November, we received tentative approval of YUTREPIA with labeling. We view the labeling as highly favorable as it includes description of use in both patients switching from Tyvaso as well as prostacyclin-naive patients with no new safety issues identified. We are excited to bring this portable, titratable, and durable therapy to patients, some of whom have been using YUTREPIA for more than three years at doses approximately three times that of Tyvaso's therapeutic dose.
This therapeutic profile represents a potential game changer for PAH patients and positions YUTREPIA to become the prostacyclin of first choice. Secondly, in April, we expanded the use of Treprostinil Injection into the subcutaneous market. As a result, we more than doubled the number of patients on Treprostinil Injection, with approximately 500 patients on therapy today based on specialty pharmacy reporting. Approximately 400 unique prescribers have switched patients from brand to generic, including approximately 150 unique prescribers since our subQ launch in April of 2021. We expect to see continued demand growth as new generic mandates from payers are increasingly being issued from large payers that cover tens of millions of lives.
Thirdly, we also have significantly advanced our ongoing litigation with United Therapeutics, including a final written decision in the IPR for the '901 patent that found seven of the nine claims unpatentable. In addition, based on United Therapeutics' stipulation of Liquidia's non-infringement of the remaining two claims of the '901 patent, that patent will no longer be part of the Hatch-Waxman trial, which is scheduled for the end of this month. An IPR was also instituted for the '793 patent, with the PTAB stating that Liquidia demonstrated a reasonable likelihood of prevailing in its assertion that all of the claims of the '793 patent are unpatentable as obvious over the combination of certain prior art.
While last Friday's summary judgment decision did not go as we hoped, it is important to note that the issue before the court in summary judgment was not the same issue that will be before the court at trial. Judge Hall specifically noted that she was not commenting on the validity of the asserted claims in the '901 and '066 patents or the likelihood that the Delaware Court may find the claims invalid based on the same reasoning that led the PTAB previously to invalidate United Therapeutics' '393 patent.
In fact, given that Judge Hall's recommendation was based solely on technicalities that applied only to our collateral estoppel arguments and not on the substance of arguments regarding the scope of the '066 and '901 patents, we are, if anything, more confident than before in our positions of invalidity and non-infringement that will be presented at trial. Finally, we strengthened our balance sheet through business optimization initiatives and the refinancing of our credit facility with SVB, providing funding through key legal milestones in the early launch phase of YUTREPIA, as Mike Kaseta will now describe in more detail for you. Mike, over to you.
Thank you, Roger, and good morning, everyone. Our full- year 2021 financial results can be found in the press release issued earlier today and on our Form 10-K to be filed with the SEC after market closes today. In those documents, you will see that first, revenue was $12.9 million for the full year of 2021, compared with $700,000 for the full year of 2020. The increase is driven by recording a full year of revenue related to the promotion of Treprostinil Injection following the acquisition of RareGen in November of 2020.
Revenue recognized under the promotion agreement in 2021 is net of $2.7 million of amortization of the contract acquisition costs associated with the promotion agreement. Cost of revenue was $3 million for the full year of 2021, compared with $200,000 for the prior year. 2021 included a full year of sales force-related costs, as well as amortization of the intangible asset associated with the promotion agreement.
Research and development costs decreased in 2021 to $20.5 million for the full year, compared with $32.2 million the prior year. The 36% decrease primarily related to lower expenses from our YUTREPIA clinical program, which was substantially completed prior to filing the NDA in 2020 and lower employee and consulting expenses. General and administrative expenses were $23.1 million for the full year 2021, compared to $27.4 million for the prior year.
The decrease of $4.3 million or approximately 16% was due to $9.1 million decrease in consulting personnel and commercial expenses, and offset by a $5.1 million increase in legal fees relating to our ongoing YUTREPIA-related litigation, and a $2 million increase in stock-based compensation upon the tentative approval of YUTREPIA last November. In summary, we've incurred a net loss of $34.6 million or $0.70 per basic and diluted share, compared to a net loss of $59.8 million or $1.76 per basic and diluted share for the year ended December 31, 2020. Turning to our balance sheet, we ended the year in a strong position. We ended 2021 with $57.5 million of cash on hand.
In early 2022, we also increased our debt facility with Silicon Valley Bank to provide immediate access to an additional $15 million of cash in 2022, with additional capital available pending certain milestones. When combined with the continued revenue from the Treprostinil Injection, the company will be well-positioned to launch YUTREPIA pending its final FDA approval. With that, I'd now like to turn the call back over to Roger.
Thank you, Mike. Moving forward, we are extremely excited about the growth prospects for the company. As Jason mentioned, Mike and I are joined by other key members of our leadership team, and we will now open it up for questions. Operator, first question please.
Thank you. As a reminder, to ask a question, you'll need to press star one on your telephone. To withdraw your question, press the pound key. Our first question comes from Kambiz Yazdi with Jefferies. You may proceed with your question.
Good morning, everyone. Hey, Roger and team. Kambiz Yazdi on for Chris here. Three questions for me. First of all, why do you think YUTREPIA can expand the inhaled PAH market to $1 billion from where it currently stands today? Second question, how have payers responded to the availability of generic sub-Q treprostinil? And then, thirdly, was there any United strategy revealed during the summary judgment proceedings? Thank you.
Thank you, Kambiz, for the questions. I'll answer the first one about the market opportunity for YUTREPIA and why we think it's a growing opportunity. I'll have Mike answer the generic question, unless he can opine on legal strategy, at least what he's able to do so. In terms of the market opportunity for YUTREPIA, there's multiple near-term value accelerators, and they're really driven by four key levers. One lever is portability, one lever is tolerability, the other lever is titratability, and the final lever is durability. Let me speak to that a little bit. If you look at just the WHO Group 1 PAH market, it's estimated to be around $500 million market. Again, just a rough estimate.
We think the value of a dry powder formulation like YUTREPIA is that the portability of the product will greatly transition that market and rapidly from nebulized formulations to dry powder formulations. I think that's quite simply done 'cause you're taking a nine to 12 breaths per session, four times a day, to a two breath per session with a small pocket-sized device with blister packed capsules for delivery. Highly portable, small, tried and true. You know, the devices that we use, for example, have been used in asthma and COPD breath drugs for years. These devices are also active in trials in PAH. Gossamer and Aerovate are two examples of companies using the same device. There's six to seven million of these device or more, and obviously we only need a small number of those.
Portability will change the paradigm. More importantly, though, it's not simply portability. I think we've also changed the therapeutic profile of inhaled treprostinil using uniquely our PRINT formulation of treprostinil. As you know, PRINT provides uniform size and shape, monodispersed particles in the 1.3 µ range. What that does is allow for better aerodynamic performance so that the particles fly to the lower lung, less deposition in the upper airway. What we have seen is that there is the potential for lower adverse events related to deposition in the throat. Less throat irritation and pain, less cough. This has borne out to be true in our early studies when we looked at the dosing. We have had patients now in open long-term extension studies for up to three years.
We have patients in excess of three times the therapeutic dose of Tyvaso. You're talking about what would be an equivalent of 27 breaths four times a day, which we're delivering in two to four breaths per session. Massively different there. Really starting to change the profile so that inhaled treprostinil is now behaving more in its capabilities like oral or parenteral treprostinil that can be dosed to effect. What that will then lead to is a better durability. Physicians will be able to hold their patients longer on inhaled treprostinil. I think you're gonna see expansion of the market two ways. One is durability. It's gonna delay the time to more onerous therapies, including oral and parenteral, which both have tolerability issues.
It's gonna expand into earlier use. As well as probably infringe greatly on the oral use as prostacyclin, our first choice. Our campaign is driven to drive YUTREPIA to be the prostacyclin of first choice, and we think we can take a $500 million market today and greatly expand it, again, based on these pharmacologic attributes that I've just described. Mike, if you could talk about the generic question.
Absolutely. Thanks, Roger, and thanks, Kambiz. You know, I think for us, you know, sub-Q approval was critical from a payer perspective. It took off the administrative burden of payers where before they had to differentiate between injectable and sub-Q. You know, as Roger said, we have approximately 500 patients on therapy, which is more than double what we had in April 2021, which was the last month before sub-Q approval. In addition, several payers have already mandated generic fill, and that has contributed to that doubling of patients.
Just, you know, looking forward for 2022, we're not going to give revenue guidance, but, you know, just to give you an idea, you know, two large national payers covering, you know, approximately 50 million lives will require the use of generic treprostinil injection, and we expect to see, you know, an uptake, you know, coming, you know, as we move into Q2 and beyond of 2022.
Great. Thank you, Mike. Rusty, once we can, if you could speak to what we learned about legal strategy.
Sure. Thanks, Roger, and thanks for the question. You know, to answer your question, the summary judgment based on collateral estoppel, which is really its own sort of separate discrete issue, that's differentiated from the general non-infringement and invalidity arguments that'll be made at trial. It's hard to read too much into that as to UT's strategy. You know, I think what is notable is the core arguments we made in support of summary judgment address the scope of United Therapeutics' '066 and '901 patents, and a comparison of the products claimed by the '066 and '901 patents to the product claimed by United Therapeutics and their '393 patent that was previously invalidated or deemed to be unpatentable over the prior art.
We think it's notable that in issuing her recommendation, the judge didn't reject or disagree with our arguments on those. That's certainly not determinative of what the outcome will be at trial, but we think that is notable. You know, I think that's informative for us as we move forward to trial. It's again, because the issue is discrete from the issues that'll be presented at trial, it's hard to read too much into what UT's strategy will be.
All right. Thank you so much for your answers.
Great. Thank you, Rusty. Operator, next question, please.
Thank you. Our next question comes from Serge Belanger with Needham & Company. You may proceed with your question.
Hi, good morning. Couple questions for me. I guess the first one for Roger. Can you just outline some of the key decisions on the patent trial front as well as the IPR process that we should expect, and how these will guide or determine your pre-launch commercial activities for YUTREPIA? The second question, I guess, for Mike. Can you just talk about the cash runway and the potential ramp-up in OpEx for 2022? It looks like SG&A went up pretty significantly in the fourth quarter. Were those mostly just one-time items or legal stuff? Just trying to get some clarification. Thanks.
Thanks for the questions, Serge. Just in terms of kinda how the legal case will drive our pre-launch preparation, I'll just start by saying obviously we're taking all legal measures we can to ensure that we can remove any unwarranted barriers. As soon as we're free and clear to market, we will pull forward our marketing and launch. We're preparing now to launch. Rusty, maybe you could talk since Rusty is our General Counsel. You could talk about key decisions in the IPR process that will happen over the course of this year.
Just to give a preview of some key dates, obviously, the trial is the end of this month, so it's scheduled for the 20th to 30th in a district court in Wilmington, Delaware. Closing arguments will be on March 31st. We're expecting a hearing in the '793 IPR sometime in mid-May. We should then get a final written decision from the IPR in the '793 IPR sometime mid-August. Then as far as the decision from the Hatch-Waxman trial, you know, we are anticipating that we'll likely receive a decision prior to the end of the 30-month stay. You know, beyond that, it's hard to give much guidance, 'cause you know, we know the courts are busy, and really it'll be in the judge's hands as to how quickly the decision comes out.
Great. Thank you, Rusty. Mike, maybe you could answer the questions around cash.
Absolutely. Thanks for the question, Serge. From a cash perspective, you know, we feel really good with where we are from a cash position. As Roger said, with the expansion of the SVB facility, which gives us immediate access to $15 million of additional capital, along with additional tranches upon certain milestones, we feel really good with where we are. We are, you know, moving forward with pre-commercialization activities. You know, we're playing to win here.
We are in the process of ramping up, and we feel very comfortable with our capital position that it can get us through the launch of YUTREPIA in Q4 of 2022 and really into Q1 of 2023. You know, related to your question on Q4, it's really driven by a couple of factors. One, SG&A did increase in Q4. There were some one-time costs related to stock compensation for you know, us getting kind of approval. We did have increase in legal costs as we ramp up and get ready for the trial in the next couple of weeks. Those are really the explanations of why SG&A were increased. You know, most of the increase was a one-time cost related to stock compensation.
Got it. Great.
Thank you.
Thanks. Thank you, Serge. Operator, next question, please.
Thank you. Our next question comes from Andreas Argyrides with Wedbush. You may proceed with your question.
Good morning, and thanks for taking our questions. A couple of them from us here. Well, let's start with, can you provide some details, some more details around the launch preparations? How many reps do you plan to hire, and at what point in time would that happen? Also, if the litigation isn't resolved by the expiry of the 30-month stay, are you planning to launch at risk? Just kind of thinking about the print technology more broadly, how are you thinking about expanding the pipeline going forward and any timing around that? Thanks.
Thanks for the questions. Andreas, maybe we'll take them in reverse order. I'll answer the question about PRINT, have Mike answer about launch prep, and Rusty can talk about litigation and launching at risk things. With PRINT, obviously now with YUTREPIA having tentative approval, we validated the platform. Very proud of the GMP manufacturing facility for the API that we have in-house in Mooresville, North Carolina, RTP. We are looking to expand opportunities of PRINT. In particular, we're trying to leverage the expertise that we're building for the launch of YUTREPIA, so we're looking at next generation longer acting forms of YUTREPIA. These are early.
We won't really talk about those until we have data that we feel would be of interest to you, but we hope to get that through the first half of this year, potentially. Excited about what we're doing there. Also having broader business discussions about what other things we could would PRINT avail itself to, whether it's a market opportunity, niche, orphan areas that we could penetrate potentially complementary to the what we're doing already in pulmonary hypertension. That's broadly kind of the way we're looking at things. I think there's enough on our plate and enough growth and success opportunity ahead.
If we successfully launch YUTREPIA, if we then prepare ourselves for the data exclusivity in WHO Group 3 patients to expire in March of 2024, which is only two years away, you know, there's another huge market opportunity that we can grow into. Then obviously, United Therapeutics is successful in their additional studies of Tyvaso in broader populations in COPD and ILD. Obviously, when we have the chance to penetrate those markets, we certainly will. Lots ahead just with what we have, but certainly more opportunity to further improve the delivery of this important therapy to patients. With that, maybe Mike, if you could talk about launch prep.
Absolutely. Thanks, Roger, and thanks for the question. You know, launch prep, I think I just wanna point out that you know, the RareGen acquisition you know, aside from providing positive cash flow to the company, the strategic part of that transaction of bringing in an existing commercial infrastructure with a wonderful Head of Commercial, Scott Moomaw, who came as part of that transaction. That really springboards us to prepare for a launch of YUTREPIA. You know, just to give you an idea of timing, we are in full scale-up mode. We've recently hired a Head of S ales. We're building out our medical affairs team.
You know, we are preparing for success and preparing to launch YUTREPIA here in 2022. Now, we're not gonna get into the specifics on the size of the sales force, but we feel confident that, you know, we will have a nimble and professional sales force that will be able to compete and win share for YUTREPIA and for Liquidia. We are excited for what comes in 2022, and we're prepared to ramp up appropriately as we head towards launch.
Thank you. Great answer, Mike. Rusty, maybe you can address the litigation question and launch.
Sure. Thanks for the question. You know, as to whether we would launch at risk, if we haven't gotten a decision by the end of the 30-month stay, that's a decision that we won't be able to make until that time. It'll be informed by, you know, a number of data points that we just don't have right now. It'll be informed by the trial. It'll be informed by the '793 IPR. You know, certainly at that time, we'll take into account all those different factors, make a decision, but we can't provide guidance at this point because we just don't have that information in hand.
Great. With that, Andreas, thank you for your questions. Operator, next question, please.
Thank you. As a reminder, to ask a question, you will need to press star one on your telephone. Our next question comes from Julian Harrison with BTIG. You may proceed with your question.
Hi. Good morning. Thank you for taking my question. Just wondering if you can confirm that the FDA has not requested that a risk evaluation mitigation strategy be implemented, for YUTREPIA, assuming you gain freedom to operate later this year?
That's an easy one. The answer is no, they have not. Again, we have draft labeling in hand. The product's obviously there, therefore been declared safe and effective, and we don't have anything related to the API formulation that would cause any concern.
Excellent. Thanks very much.
Thank you. I'm not showing any further questions at this time. I would now like to turn the call back over to Roger Jeffs for any further remarks.
Great. Thank you, operator. We wanna thank everyone for joining us on the call today. We greatly appreciate your continued interest in Liquidia and look forward to updating you about our progress throughout the year. Have a great day. Bye-bye.
Thank you. This concludes today's conference call. Thank you for participating. You may now disconnect.