U.S. District Judge Richard G. Andrews of the District of Delaware found on Wednesday that Liquidia induces infringement of claims 1 and 14 of United Therapeutics’ U.S. Patent No. 11,826,327.
- UTHR is now on track for its best week in a year, if gains hold, while LQDA is on track for its worst week ever.
- RBC Capital called the outcome a meaningful positive for United Therapeutics that significantly clouds Yutrepia’s ability to compete freely in the inhaled treprostinil market.
- Cantor Fitzgerald said United Therapeutics’ path toward $1,000 a share just got easier.
Liquidia (LQDA) shares tumbled again on Thursday after closing down 57% on Wednesday, following a Delaware court ruling that its inhaled drug Yutrepia infringes two claims of a United Therapeutics (UTHR) patent.
Both companies sell inhaled treprostinil for two rare lung conditions: pulmonary arterial hypertension (PAH) and pulmonary hypertension associated with interstitial lung disease (PH-ILD). Wall Street termed the ruling a win for UTHR and a concern for LQDA.
LQDA stock was trading near $26 by midday on Thursday, extending a selloff that has erased more than half its value in two sessions. United Therapeutics rose roughly 7% on Thursday and about 13% on Wednesday on the decision.
UTHR is now on track for its best week in a year, if gains hold, while LQDA is on track for its worst week ever.
The Wednesday Ruling
U.S. District Judge Richard G. Andrews of the District of Delaware found that Liquidia induces infringement of claims 1 and 14 of United Therapeutics’ U.S. Patent No. 11,826,327, which cover methods of treating PH-ILD with inhaled treprostinil, including dry-powder forms.
The court held those claims valid; the other claims United Therapeutics asserted were found invalid. The parties have one week to propose a final judgment and remedies. United Therapeutics has said it believes it is entitled to an order directing the FDA to withdraw approval of Yutrepia’s application, which could pull the product from the market until a label omitting PH-ILD is cleared. Roger Jeffs, Liquidia’s chief executive, said the company disagrees with the finding on claims 1 and 14, will pursue “all available appellate options,” and plans to ask the FDA to remove the PH-ILD indication. Liquidia said possible remedies range from dropping that indication to a broader curb on availability, and that it cannot yet estimate financial exposure.
LQDA, UTHR Analyst Reactions
RBC Capital called the outcome a meaningful positive for United Therapeutics that significantly clouds Yutrepia’s ability to compete freely in the inhaled treprostinil market. The firm said the case is not fully settled until the judgment is entered in about a week, when the financial consequences will be clearer, and it still sees the risk-reward tilted in United’s favor, keeping an Outperform rating.
BTIG upgraded United Therapeutics to Buy from Neutral with a $728 price target, arguing the win clears a path for growth to resume through 2027 and places Yutrepia’s freedom to operate in high jeopardy. The same firm cut Liquidia to Neutral from Buy with no target, warning that the remedy could include an immediate halt on Yutrepia across indications until the PH-ILD claim is stripped from the label.
Bank of America lowered its Liquidia target to $40 from $92 and kept a Neutral rating, citing greater uncertainty around Yutrepia’s commercial outlook. It noted that PH-ILD accounts for about half of current Yutrepia sales and roughly half of its longer-term revenue forecasts.
Cantor Fitzgerald said United Therapeutics’ path toward $1,000 a share just got easier. Analyst Olivia Brayer Saunders wrote that the infringement finding materially strengthens the Tyvaso franchise and raises the risk to Liquidia’s PH-ILD opportunity. Cantor kept an Overweight rating and a $700 target.
Raymond James downgraded Liquidia to Outperform from Strong Buy and cut its target to $53 from $106. The firm removed PH-ILD from its Yutrepia model and flagged added uncertainty over labeling, damages, and possible market limits. It said management is pursuing a PAH-only label, modestly raised its PAH estimates, and still sees a positive case for the product given a peak-sales opportunity of about $1.01 billion.
How Did LQDA, UTHR Retail Traders React?
On Stocktwits, retail sentiment around UTHR stock improved from ‘neutral’ to ‘extremely bullish’ over the past 24 hours, while message volume rose from ‘normal’ to ‘extremely high’ levels.
Meanwhile, sentiment around LQDA stayed ‘extremely bullish,’ coupled with ‘extremely high’ retail chatter.
While LQDA stock is down 24% year-to-date, UTHR has gained 32%.
For updates and corrections, email newsroom[at]stocktwits[dot]com.