Liquidia settles patent suit with United Therapeutics

Liquidia (LQDA) resolved its legal dispute with United Therapeutics on October 13, confirming that the inhaled lung drug Yutrepia will remain available to patients with pulmonary arterial hypertension without disruption. This settlement followed a federal judge's ruling on September 30 that Yutrepia infringes a United Therapeutics patent, a decision that triggered a nearly 50% drop in the stock that day. Since then, Liquidia shares have lost 59% over the past month, a period during which the S&P 500 gained 2.5%.

The company's historical performance shows a pattern of severe drawdowns followed by recovery. Since 2018, Liquidia has experienced seven market shocks, with the stock falling an average of 28.7% compared to a 17.1% decline for the S&P 500. The steepest recent drop occurred during the late-2018 Federal Reserve policy scare, where Liquidia lost 52.0% from October 2018 to January 2019, while the S&P 500 lost 19.0%. A more recent 27.0% retreat happened during the 2025 tariff shock, against a 19.0% index decline. The deepest overall decline in the company's trading history was 94%, stretching from a 2018 peak to a 2021 low.

Liquidia eventually recovered to its pre-shock high after all seven of these falls. A typical recovery from the low took 2.7 months, but the late-2018 fall required 83.9 months to resolve, making it the only one of the seven recoveries that took more than a year.

Financially, the company has shifted from heavy losses to profitability. Over the last twelve months, Liquidia posted an operating margin of 37.4%, compared to 18.5% for the S&P 500. A year prior, the firm’s operations ran at a deficit of approximately seven dollars for every dollar in sales. Yutrepia generated $170.4 million in net product sales in the second quarter of 2026, marking a 31% rise from the first quarter. The company closed that quarter holding roughly $284.2 million in cash, which was $61.4 million higher than in the prior quarter. Liquidia’s debt equals just 5.4% of its market value, compared to 20.1% for the S&P 500.

Management expects costs to climb going forward. On an August 12 call held before the court ruling, executives projected that research spending in the second half of 2026 would double from the first half. They anticipated further spending increases in 2027, alongside growing sales and administrative costs as the company scales, noting that some costs would grow in proportion to revenue. While management expected revenue to keep growing in line with previous quarterly trends, they did not state that the larger sales team, in the field since June, would speed up new patient starts.