This Healthcare Conference, and the next company presenting here today is Liquidia. Really, really excited to have Michael Kaseta, who is the Chief Operating Officer and Chief Financial Officer, and Jason Adair, who is the Chief Business Officer. Thanks, guys, for joining.
Appreciate it.
Exciting times with the story. Yeah, I just wanted to kind of give you the floor, give a quick sort of background about the story, where you are, like 3Q update, and then we can take it from there.
No, Ash, first of all, really appreciate you and UBS for having us. It's been a great time at Liquidia. We're really excited for where we are. We just did our Q3 earnings last week, and you talked about how the launch is going. We launched our product in May of this year, and in our first full quarter of launch, we have reported that we've had over 2,000 prescriptions, over 1,500 unique patient starts. That translated to over $51 million of revenue, and we actually were profitable as a company in our first full quarter of launch and generated positive cash flow in September and October. It is a great time to be at Liquidia. It's been a long time.
We've been committed to this patient population and these physicians, and I think we're finally able to deliver on that promise to give patients a choice, a choice that they've been waiting for for several years for a product that we feel is differentiated and ultimately can make patients' lives better for a long time.
Great. Yeah, pretty exciting times. I mean, just like with the early launch, I think a lot of excitement. I think you've blown past all of the expectations that people had in terms of the launch. Congratulations to you for that. I think obviously, I'm sure you're getting this in every single meeting, like where are the patients coming from? Just to kind of address that, yeah, PH, PH-ILD, like naive, like what line of therapy?
Absolutely. When you look at what we're most excited about is that we've seen patients coming from every aspect. We've seen PH patients, PH-ILD patients. We've seen naive patients in both diseases. We've seen transition patients from Tyvaso, Tyvaso DPI, and also in PH, we've actually seen oral transitions as well. What we're most excited about is, and what we've always thought is the flexibility, our product profile of being able to dose to higher doses using an easy-to-use device really gives patients flexibility regardless of where they are in their disease journey to utilize YUTREPIA and ultimately benefit from this great product.
Yeah. Has your expectation sort of been different versus like when you before launching the product, what you were expecting the source of revenue to be versus now that you have seen the first quarter essentially, right? Has that come along pretty much the same that you thought that this would be the patient mix, or is it different in any way?
Yeah. We've had the launch has gone extremely well. We had high expectations. It's obviously outperformed those expectations. I think what has happened is if you just look at the product profile and what we've done over the last couple of years, and one of those things is our open label phase four Ascent trial, which took naive PH-ILD patients in the first prospective study using a DPI in PH-ILD. What we've seen, and we've shown these results over the last several months, we feel really proves that hypothesis, and that hypothesis is we've been saying for a long time that more treprostinil is better for patients. Our unique formulation technology, which allows us to manufacture particles of uniform size and shape, allows us to achieve deep lung deposition, avoids buildup in the back of the throat or in the upper airways.
What we have seen in our Ascent data is very interesting, and what we have reported on over the last several quarters is eight-week data, 16-week data, and 24-week data for the 54 patients that we enrolled. What that showed was at eight weeks, these patients were on an average dose of 132.5 micrograms, which is the equivalent of 15 breaths of nebulized Tyvaso, and they showed a walk improvement of 21 meters. As they have navigated to 16 weeks and 24 weeks, they incrementally increased their dose. At 16 weeks, we got up to 159 micrograms, which is the equivalent of 18 breaths, and we showed a walk improvement of 31 meters. When we just reported last week the 24-week data, the average dose was 185.5 micrograms, which is the equivalent of 21 breaths of Tyvaso neb, and showed a walk improvement of 41 meters.
When you put that all together, granted it was a phase four open label study, but when you look at our product profile, we're very excited about what we've done. What we've also seen as part of our launch data is a significant amount of in PH of oral transitions. One of the things that we talked about last week in earnings is that we're going to do a similar phase four open label study in oral transitions, and we're very excited about that. If you look at the PH market, that oral market is over 10,000 patients and over $2 billion. Oral treprostinil, those products are not easy on patients, difficult to titrate to a therapeutic dose, and our ability to, again, have such dose flexibility, we feel this is a product that ultimately can service those patients as well.
Roger Jeffs, our CEO, has been saying for a long time he wants to be the prostacyclin and a first choice. We feel that as time goes by, we develop our product profile by generating clinical data, which we think is very important to our commitment to these patients and these physicians, that we can slowly but surely do that and continue the momentum that we've seen in the early launch and deliver this product to as many patients as we can.
Yeah. Is there like a specific metric around PH versus PH-ILD, the way the split of the patient mix came out to be, or is it like too early to start to comment on that?
Yeah. I mean, I think from a PH and PH-ILD, what we've said last week at earnings is that the majority of patients are in PH, but the PH-ILD patients are growing rapidly. We've long said that the PH-ILD opportunity is a large opportunity. We believe the addressable market is about 60,000 patients or more. UT has said on multiple occasions that they've penetrated less than 20% of that market. We look at that as a long-term investment. It's a long-term investment. This is a relatively new disease state. The first product was approved less than five years ago. We are in the process of building relationships with doctors, helping them go through disease education, identifying patients, diagnosing patients, and ultimately treating those patients.
I think with us and United Therapeutics having boots on the ground, sales forces, medical affairs team, it's going to help everyone, and ultimately we feel that will be critical as we build that market and increase our share as we move forward. We're excited for where we are. Like I said, the opportunities in both PH and PH-ILD are massive, and we want to do what we can to get that message out, to continue to show the benefits of YUTREPIA and hopefully treat as many patients as we can.
Yeah. Yeah, that's great. Yeah. I mean, it's a pretty exciting launch with two different end markets that you're going after, right? I mean, from your commercial efforts standpoint, is there more or less of a focus on one versus the other? I know for PH-ILD, like right-heart cath can sometimes be a little bit of a stumbling block in terms of identifying these patients. Just like has your experience been any different in that regard?
Yeah. When we built the sales force, we built that sales force with in mind of having a national-based sales force focused on both large centers, but also local community. Our sales force targets over 6,000 doctors. We've had over 6,000, I'm sorry, over 600 unique prescribers to date. There is still a lot of work and a lot of opportunity there. We are building those relationships every day. I think one of the keys for us, our sales force has been in place since really the end of 2023. Up until launch, they were building relationships with doctors, talking about our PRINT technology, which we feel is the bedrock of our product profile and the differentiation from our competitor. That was very helpful when we launched to be able to hit the ground running, but that focus remains unchanged.
Talking to cardiologists, pulmonologists, doctors who treat PH, PH-ILD, treat both patients, it's always been our focus. It'll continue to be our focus, and we look forward to that continued growth.
Great. Great. And then on the PH side, you said like oral transitions, right? Are these like the PDE5, 81, generic combo drugs, or also like Opsumit transitions?
Yeah. So what we're really focused on is the oral prostacyclin market. So it's really Orenitram and Opsumit, which again, we believe is over 10,000 patients. So that opportunity is very large, both from a switch point of view, but also looking at YUTREPIA, having the product profile that ultimately could be the first line prostacyclin therapy for these PH patients. Again, everything we do is going to be based in clinical studies. That's why we're going to kick off this open label phase four study to study this and see what we find out. I think it's important for doctors to have data, and like we've done with our Ascent trial and PH-ILD, we'll look to do the same with the oral transition study.
Great. I know there are a few different dynamics playing out in the market overall. Maybe if you talk about this kind of oral transition market, relative to that, like United Therapeutics is studying. Yeah, if this is where the focus is for you for PH, like if Relentec shows successful data and is able to enter the market, then how could that change where you are chasing the patients?
I mean, we believe that YUTREPIA has a product profile that is very favorable from an adverse event perspective. The oral agents that are out there, it's difficult on patients. The off-target GI side effects are pretty significant. Having seen the data in Relentec, our focus is helping patients through their patient journey, and we'll continue that focus. Like I said, it comes from a lot of places, and whether you're a PH patient on oral, currently on inhaled, if you're on parenteral treatment, we feel that we have a product that can help anyone. Obviously, when new product and new data comes out, we'll evaluate that, but our focus is very clear, and we feel very confident in our ability to grow a market share, both grow the market share and grow the market in both PH and PH-ILD.
Great. Awesome. Yeah, just maybe from like an access standpoint, the commercial versus Medicare dynamic, where are you seeing the access right now, and yeah, what's the plan to sort of build it out?
Yeah. Our goal from the beginning was to make sure that patients had an opportunity to choose. Patients have been longing for choice for years. They were denied that choice for a long time. They finally have that choice. In order for them to fully realize that choice, there can be no hurdles placed in front of them around access. That has been our goal since the beginning. As we had stated at launch, we have signed contracts with the three major commercial payers. Again, as we had previously stated, we had new-to-market blocks against those three payers for the early part of the launch. I'm happy to say that two of those new-to-market blocks have already been removed. The third is in the process of being removed.
Once that's complete, I think we will have been successful in removing those barriers and making sure that we are not negatively impacted by payers in Part D, in commercial, and in government-mandated channels.
Got it. What do you expect to be like the rough split between the commercial versus Medicare in the new year maybe?
Yeah. I think as we remove those blocks, what we have previously talked about is that the market is what we've seen is about 50% Part D, 35% commercial, and 15% in the government-mandated channels like VA, DoD, Medicaid, 340B. We've been a bit skewed more towards the Part D in the early part of our launch for the reasons that make sense around the new-to-market blocks. As we move into 2026, I would expect that we would move back towards those percentages. Again, they're rough estimates, but there's nothing that we've learned that would change what those expectations would be.
Great. Great. Is there this type of a dynamic right now that because like the $2,000 out-of-pocket maximum that these patients might have hit already by this time, then you have more of like uptake coming because of that factor, but like when you start the new year, you won't have that tailwind to begin with?
Yeah. I'll be honest, with the passage of the IRA and maximum out-of-pocket reducing, these are sick patients who tend to have comorbidities and are probably on several products. The idea that that maximum out-of-pocket for Part D patients would be a barrier for us, I think is not likely, and I don't think that that would have much of an impact as we move forward.
Yeah. Yeah. That makes sense. Yeah. Just maybe from a competitive standpoint, I want to ask a few questions. I mean, there was a lot of focus just trying to look at every time there's a new therapy in this market, right? Like people are looking at how is the other company being impacted. We saw this dynamic with VinRevere, and then now seeing with you guys that, I mean, the United Therapeutics quarter was decent and didn't really see any kind of an impact. From the commentary that you're making, like oral treprostinil products, it doesn't necessarily make me believe that it is taking patients from Tyvaso DPI or Nebulizer. Is that fair to assume at this early?
Yeah. I mean, we've publicly stated that 25% of our patient starts have come through transitions. Being that there's only one product approved in PH-ILD, I think it's safe to assume that that transition, more likely than not, is from the competitive inhaled treprostinil products. In PH, we said 40% of those transitions have come from oral, and the rest presumably would have come from Tyvaso and Tyvaso DPI.
Got it. Okay. It's just not starting to be felt right now in the numbers, but as you get bigger, then we might start to see more of that dynamic.
I mean, I'll be honest, we're focused on Liquidia. We're focused on patients. I mean, they can focus on YUTREPIA and Liquidia all they want. We're going to focus on Liquidia also. That's what our whole goal here is, to service patients, offer patients choice that they've been denied for years, and we will continue to do whatever we can to offer that choice.
Yeah. I mean, the value proposition just in terms of getting more dry powder, better deposited in the lungs, right? I mean, maybe just give a brief sort of artifact of how is YUTREPIA able to do that? Because I saw like, I mean, United Therapeutics also kind of announced like higher doses for Tyvaso DPI. I am trying to understand, is that effectively trying to catch up to the product profile that you have, or where does it shake out?
Again, I'll focus on YUTREPIA. The foundation of what we believe is our differentiated product profile rests in our formulation technology. Our PRINT technology allows us to manufacture particles of uniform size and shape that were specifically designed to achieve deep lung deposition. In effect, our belief is that we will be able to reduce side effects and ultimately be able to dose to those higher doses. What I think is very encouraging, if again, if I can go back to the Ascent data, we've titrated patients at 24 weeks, as I said, up to the 185.5 micrograms, which is the equivalent of 21 breaths of Tyvaso neb. When you think about that, as part of the readout of that trial, we also have applied what we call a modified COP score. When patients enrolled, they had a baseline COP score.
What I'll say is that baseline COP score from the time of initiation to 24 weeks has remained unchanged. From a tolerability point of view, again, it's a phase four open-label study. Full disclosure on that. I think it's very telling that we've been able to go to significantly higher doses. COP has remained the same. As we've said, more is better, and we've achieved 41 meters of walk improvement. I wish I could state clinical trial in DPI and PH-ILD. Unfortunately, there is none. We have the data that has been published, and they showed a 70% discontinuation rate at 42 days in National Jewish real-world data. I don't want to speak for them, but I don't know how giving more of that powder is going to improve that side effect profile. Again, we're going to focus on YUTREPIA.
We're going to focus on YUTREPIA's product profile, and we're going to continue to serve these patients.
Yeah. I think this is just the potential of this molecule, and the drug can be pretty whole encompassing. As you've seen, let's say some of these developments play out for IPF, just, yeah, I'm just curious, like, how are you thinking about that? Is that a potential pathway for you to come explore that market?
Sure. I can take that, Ash. I think what starts to make Liquidia unique is that we are solely focused on inhaled treprostinil right now, and that's both with YUTREPIA and L606. What we're committed to do is to create the most value from those two programs. We believe our dry powder formulation is the best today, and we believe our sustained release formulation will be the best in the future. What does that mean for the recent data that we've seen? We'll see another registration study, I think, data coming out next year. I think people are encouraged. What it's told us is that we probably should start to understand how our products would perform in that patient group. Specifically around tolerability and titratability, two areas where we've already demonstrated in prospective studies that we may have an attractive profile to physicians.
What we do not know yet about, we will call it more broadly pulmonary fibrosis, is how does dose affect the response? What we have shown in our studies is that we can titrate to higher doses, and there is a correlation with improved response. We do not know personally with our own product what that looks like in pulmonary fibrosis. We are committed to understanding that with YUTREPIA. Depending on what we see, we will make decisions on what that means for YUTREPIA and how that informs a strategy with L606.
Got it. Do you think that it is possible that some physician KOLs might start to try YUTREPIA in IPF, and that can be a sign for you to?
I don't know what's possible, but I would say we would want to be prepared. What we've demonstrated is that we're always willing to do the right study first. The company was the first company to put a dry powder formulation of treprostinil in the clinic, the first company to do a prospective trial in PH-ILD with a dry powder. We want to be, again, the first company that's studying maybe higher doses in this pulmonary fibrosis market to see if there's a dose effect.
Right. Got it. Okay. Maybe just like switching over to L606. So yeah, if you can talk about like what's the differentiation versus YUTREPIA.
Yeah. We're very excited about L606. Again, focusing on inhaled treprostinil, we saw that going to a dry powder formulation improves overall exposure if we go into higher doses through a more tolerable profile. We couldn't change the dose frequency, the PK. Tyvaso, Tyvaso DPI, and YUTREPIA are all dosed four times a day. We went looking for the next best product profile, and that was L606 that we licensed in. It's a twice-daily liposomal formulation that's delivered with a rapid next-generation nebulizer. The reason why we like this profile is, again, the right order in our opinion is exposure drives efficacy. How high can we dose it? Tolerability drives durability, meaning how tolerable and then ultimately convenience.
What we just presented at R&D Day was the fact that we can dose to very high levels at the 48-week time point in this open-label U.S. study. Really surprising, I think, to most people, it's the most tolerated inhaled treprostinil developed yet. Now, it's an open-label U.S. study on standard background therapy, but there were only four patients in 48 weeks that reported a mild cough. It was 14%. That really now starts to open up, wow, if we can get to high levels with really no impact on the tolerability, where does the compliance component come in with convenience? It's the twice daily that gives us more continuous exposure over 24 hours. As we know from 30 years ago, continuous infusion demonstrated the most efficacy in iloprost, treprostinil, and epoprostenol. How can we do that in the inhaled route?
We think that's through twice daily because a patient will sleep comfortably knowing that they have therapeutic levels on board at night. Again, we're really focused on that exposure piece first, and that's why we like L606.
Great. And then like how receptive do you think that patients will be to handheld nebulized device for L606? And like do you think ultimately that may start to compete with what is out there?
Absolutely. Again, we've been running a study in the United States for over three years using a small, portable, palm-sized device, and the patients haven't really reported any challenges using that. I think what's interesting is that we haven't yet seen in our market the wave of innovation that's coming with nebulizers. When we think of nebulizers today, we think of things like Tyvaso, right? It's been around for a while. Many pieces have some limitations. Or you think of the nebulizer, the part eFlow, which might be in two different components. What we're talking about is a battery-powered palm-sized device where a patient can deliver their dose in about a minute. It has more DPI-like characteristics than it does the older nebulization technology. We are very excited to bring that into a pivotal study soon.
Great. Awesome. There are three different stratification factors in the Respire trial. Maybe if you can talk about that, what's the rationale for that?
Sure. Respire is the pivotal study that we described recently. It is a global study. It will be in over 20 countries, about 350 patients, and it is placebo-controlled. We were asked to do that so that we could confirm for the agency that we did not lose any efficacy by changing the PK profile. We believe we may have the opportunity to improve the clinical utility because I mentioned the more continuous exposure. We are excited to start that study, but do it in a real-world way. You asked about stratification. Why would we do that? We want to represent the types of patients that physicians might be doing. We had three different levels in there. We are going to do that because it is a standard way of stratifying a study, but we do not want to bias either the placebo or the treatment arm.
We're going to do so that when we come out with the data, we hope that it would be relevant to the physician community.
Would it be like a system on the same level of efficacy, let's say, compared to YUTREPIA? Is that your ultimate goal or higher or lower than that?
Yeah. We have not published the study in full. We are going to initiate it later, so I do not want to preempt any statements there. Again, we have met with the agency, the FDA and the EMA. What they have confirmed is they are not looking for us to make it better. It is just make sure that we do not lose what they already know with inhaled treprostinil. I think we want to be smart about setting that threshold. Again, I think we have the potential to show an improved efficacy. Even if it is the same, it is still a very attractive profile based on the tolerability and the twice-daily dosing.
Does that have better potential in IPF given that you're able to kind of dose on a higher?
You know, I think there's a lot to learn.
I'm surprised you're very like you're effectively like not as excited about IPF as a lot of investors or the general community seems to be about this.
I've been at Liquidia for a while, almost 10 years. I think what we've learned is we got to work our plan. If you work the plan in the right sequence, you can build a sustainable business. That's what we're doing right now, right? We were profitable in the first full quarter. We have an exciting next-generation product in L606. We're kicking off additional studies to create value with what we have today. The IPF opportunity will always be there in the future. It doesn't necessarily mean that we have to go capture it today because there's a lot we can do in the near term.
Yeah. I have a couple of other questions, but yeah, for the audience, like if you have any questions, feel free to send them through the QR code and we can take them on. Yeah, I mean, look, I think there is a potentially like a big update on the legal case side. To the extent that you can comment on, like, what are you expecting from that for this 327 patent and I have a few follow-ups.
Yeah. I mean, as you know, a patent was asserted against us, the 327 patent. The trial was in June. Briefing was done. Post-trial briefing was done about two months ago. We are now waiting. I think everyone's waiting. Judge Andrews in Delaware will issue his opinion when he's ready. We're not going to speculate as to when that's going to happen. We're just prepared for it to come at any time.
Right. I mean, it's kind of an unusual situation in the sense that we have not seen that type of an action by a district judge that they would go after basically taking off a product that is already being used by patients. Is there any close precedent for that that you have seen? Yeah, effectively, if it does come down to it and you're only, I think you said most of the use is coming from PH, right? How does that factor into the repercussions of what might eventually be asked to do here?
It sounds like you think we're going to lose is what you're saying.
Just playing out either scenario, yeah, win or lose.
Listen. We think the 327 is an invalid patent. We think we don't, you know, they've asserted certain claims against us. We think it's either invalid or we do not infringe. Now, is there a scenario where the judge can rule against us? Yes. You know, could there be a variety of range of outcomes? Yes. Like I said, our commitment is to this patient population. We're going to do everything we can to provide product to patients who want and need our product. We're going to do that until someone tells us otherwise. We're prepared. Ultimately, we feel confident in our case. We're going to wait like everybody else. What I'll say is we're going to be prepared in any situation. I think any good company is going to be prepared for many outcomes.
Like I said, we believe we should win, but we're going to be prepared regardless because again, our main focus is patients and we want to make sure that they are taken care of.
Great. Awesome. With that, we can wrap it up. Thank you so much for your time.
No, Sam, we really appreciate it.
Thank you, Ash.
Thanks. Thank you.