Liquidia Corp

Liquidia continues to be the gift that keeps on giving. At our average cost, we bought LQDA at around 1.5x our estimates for 2027 earnings and ~1x 2028 earnings. We originally purchased LQDA at $5.00/share; our average cost is around $9.00, and today the shares trade at around $78. We have continually adjusted our delta-adjusted position size using options as a risk management tool, but LQDA has still been our largest contributor YTD, up over 100% so far this year. Despite the stock’s appreciation, we still feel there is 50%+ upside to what an acquirer would pay for the business today. We believe Andrews will rule in LQDA’s favor, and that an acquirer is likely to come in shortly after the ruling.

Liquidia has been our largest position over the past year when taking into account the underlying equity value of the call options. It was also our best performing holding. Liquidia’s stock increased in value fivefold over the past year. The commercial launch of Yutrepia turned out to be one of the most successful drug launches in recent history. I continue to believe that the first outcome is the most likely and the patent will be found to be invalid either because it is considered obvious or because United Therapeutics will be found to have failed to prove ownership. Each quarter of outstanding results from Yutrepia’s launch increases that revenue number and increases the value of the company.

Liquidia Corp. (LQDA) makes YUTREPIA, a drug that launched one year ago to treat Pulmonary Arterial Hypertension (PAH) and Pulmonary Hypertension Interstitial Lung Diseases (PH-ILD). The launch has been nothing short of fantastic, and the company plans to pursue additional indications, which will greatly increase the addressable market and revenue potential. Despite ongoing litigation with United Therapeutics, the worst-case outcome appears manageable, with potential earnings of $6 to $8 per share next year. Given the current forward P/E of 10-12x, there is significant upside for shareholders, especially following the expected favorable ruling from the judge.

Liquidia’s launch of Yutrepia continues to outpace investor expectations, a trend we expect will continue. The litigation overhang should be resolved in the near term; we expect a decision favoring the company, which could unlock further gains. This positive outlook is supported by the favorable market conditions and the company's strong revenue and profit growth, positioning it well for future success.

Liquidia (LQDA) represents a compelling investment opportunity as the company has successfully launched a drug, although it is currently embroiled in a patent dispute that will significantly impact its market potential. We acquired shares at a price below our anticipated settlement value, even factoring in a potential adverse trial outcome. The stock has already appreciated over 30% prior to a verdict, allowing us to realize a short-term gain. We plan to reassess our investment following the decision, indicating our confidence in the company's future prospects.

Liquidia Corporation has shown outstanding performance with the launch of their Yutrepia product. The company is positioned to generate $1.2 billion in revenue in 2027 with net margins of at least 60%. Even in a worst-case scenario regarding patent infringement, Liquidia shares would still be valued at $70 per share. The potential for significant revenue growth extends beyond 2027, as the company can capture a larger share of the treprostinil market and expand its total addressable market. I have never been this bullish on a position we have held in the fund.

Liquidia’s launch of Yutrepia continues to outpace investor expectations, a trend we expect will continue. This strong performance is indicative of the company's potential for growth in the health care sector. The Fund has recognized Liquidia as a significant contributor to our performance, reflecting our confidence in its future prospects.

Liquidia has benefited from strong sales of its respiratory drug, Yutrepia, in its first quarter following launch. The manager highlights the potential for increasing earnings and cash flow in the biopharma sector, suggesting that Liquidia is well-positioned within this context. The overall sentiment towards biopharma stocks is optimistic, with the manager believing they are poised for outperformance going forward, which bodes well for Liquidia's future prospects.

Liquidia Corporation's share price rose significantly following FDA approval for its flagship product, Yutrepia, which treats Pulmonary Arterial Hypertension. The launch has exceeded expectations, with over 900 unique patient prescriptions in just 11 weeks. The manager believes that Liquidia's shares are mispriced due to conservative adoption estimates and ongoing litigation uncertainties. The potential for a favorable ruling in the patent dispute could further enhance the company's market position and lead to M&A activity. The manager maintains a bullish outlook with a target of $100 per share.

Liquidia Therapeutics has successfully navigated a challenging landscape marked by patent disputes and FDA approval delays for its flagship drug, Yutrepia. With Yutrepia's recent FDA approval and strong initial prescription numbers, the company is poised to penetrate a previously monopolistic market. Despite a temporary stock price dip following the launch, the long-term outlook remains positive, supported by the unmet need Yutrepia addresses. The management's sales strategy and the potential resolution of ongoing legal challenges further bolster confidence in Liquidia's future performance.