Liquidia (LQDA) Q4 2025 Earnings Call Transcript
Liquidia (LQDA) Q4 2025 Earnings Call Transcript
Motley Fool Transcribing, The Motley FoolThu, March 5, 2026 at 11:03 PM UTC
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Date
Thursday, March 5, 2026, at 8:30 a.m. ET
Call Participants -
Chief Executive Officer — Roger Jeffs
Chief Financial Officer — Michael Kaseta
Senior Vice President, Commercial — Scott Moomaw
Chief Medical Officer — Rajeev Saggar
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Takeaways -
Net product sales -- $148.3 million generated by YUTREPIA for the full year, with $90.1 million in the fourth quarter.
Quarter-over-quarter revenue growth -- 74% increase in net product sales in the fourth quarter compared to the third quarter.
Profitability -- Second consecutive quarter of profitability, with non-GAAP adjusted EBITDA of $27.3 million and $14.6 million of net income in the fourth quarter.
Operational cash flow -- $33.0 million positive cash flow was generated in the fourth quarter.
Cash balance -- $190.7 million in cash and cash equivalents at year-end.
Patient referrals -- As of Feb. 28, more than 3,600 unique patient referrals were received; therapy shipped for more than 2,900 patients since launch.
Prescriber base -- Around 860 total prescribers, with 25% having referred five or more patients.
New patient mix -- 75% of patient starts are prostacyclin-naive; 25% are transitions from other prostacyclines.
Disease split -- New patient prescriptions are now roughly equal between pulmonary arterial hypertension (PAH) and pulmonary hypertension associated with interstitial lung disease (PHILD).
Market revenue share -- Company’s revenue share in inhaled treprostinil market increased from 10% in the third quarter to 17% in the fourth quarter, based on revenue analysis.
Market growth attribution -- Management stated, "We are accounting for more than 100% of market growth in Q4," reflecting outperformance relative to overall inhaled treprostinil market expansion.
Pull-through rate -- Management noted "we have maintained 85% plus of pull-through since the very early stages of the launch," referencing patient start conversion from prescription to therapy.
Sales force expansion -- The company will increase its sales force by one third, aiming to deepen penetration in the PHILD segment.
Clinical and label expansion plans -- New studies are planned in 2026, including transition and combination therapy trials, expansion into systemic sclerosis-associated Raynaud’s phenomenon and PHCOPD, and initiation of the pivotal L606 study.
Legal proceedings -- On legal matters, management confirmed that really nothing new has occurred since the oral hearing and post-trial briefings in 2025, but expressed continued confidence in their case, stating, "We remain confident in our position."
Summary
Liquidia (NASDAQ:LQDA) accelerated YUTREPIA commercial adoption, rapidly increasing its revenue share and achieving ongoing profitability within nine months of launch. Physician engagement deepened, as evidenced by both the expanding prescriber base and increasing frequency of multi-patient referrals. Strategic initiatives announced for 2026 include broadening clinical evidence, targeted salesforce expansion, and pursuit of new indications, all funded by operational cash flow. The company’s analysis indicated it captured all market revenue growth in the inhaled treprostinil segment for the fourth quarter, raising its share from 10% to 17% sequentially. Management reiterated a clear trajectory toward a $1.0 billion annual revenue target in 2027, anticipates sustained momentum, and indicated no material impact from emerging competitors or device innovations in the segment.
Management said there was no change to its strategy or anticipated growth path in response to seasonality, device innovation, or oral prostacyclin competition.
Clinical development targets include the Phase 2a systemic sclerosis Raynaud’s program launch by year-end and trials specifically designed to facilitate transitions from competing therapies.
Legal outcome timing remained uncertain, with leadership preparing for multiple scenarios but stating, "we remain confident in our position."
The planned L606 product is positioned to improve dosing convenience and durability compared to current therapies, with pivotal enrollment expected in coming quarters.
Expanded payer access and sustained high pull-through rates underpin expectations of continued revenue-per-patient stability as the prescriber network broadens.
Industry Glossary -
PHILD: Pulmonary hypertension associated with interstitial lung disease; a distinct segment targeted for inhaled prostacyclin therapy.
PAH: Pulmonary arterial hypertension; a primary disease indication for treprostinil-based therapeutics.
Pull-through rate: Percentage of prescriptions that successfully convert to initiating therapy.
SMI: Soft Mist Inhaler; a platform for drug delivery which competitors are developing in this space.
Gross-to-net: A metric representing the difference between gross revenue and net revenue after accounting for rebates, discounts, and allowances, relevant to pharmaceutical product sales.
NRx/TRx: NRx refers to new prescriptions; TRx refers to total prescriptions, both used to gauge product adoption.
Parenteral: Refers to drug administration by injection rather than orally or by inhalation, relevant to legacy prostacyclin therapies.
ASCENT study: Company-specific pivotal trial delivering efficacy and safety data for YUTREPIA.
MMAD: Mass median aerodynamic diameter, used to characterize particle size in inhaled therapies.
Full Conference Call Transcript
Roger Jeffs: Thanks, Jason, and good morning, everyone. As we look back on 2025, and forward into 2026, what stands out is the rapid establishment of our preferred product profile paired with precise execution. Last year demonstrated that Liquidia Corporation could launch, scale, and reach profitability quickly within only 120 days of launch, in fact. Most importantly, we demonstrated that physicians were willing to rapidly change prescribing behavior when presented with a new differentiated option in utremia. The benefits of its product profile, deep lung delivery, low effort device, and wide dose range are taking hold in clinical practice and help place QTREPIA as one of the top specialty drug launches over the past five years across all therapeutic categories.
This did not happen by chance, but with purpose, as the category-defining ASCENT study data clearly set a new data-driven standard for therapeutic success. The momentum of 2025 has clearly carried into 2026. As of February 28, we have received more than 3,600 unique patient referrals and shipped therapy for more than 2,900 patients since launch, maintaining our robust trajectory. While others have observed stagnation from supposed seasonality, that has not been our initial experience as we continue on the same tour trajectory without decline, which would suggest that our percent market share is rising and that we are capturing a disproportionate number of new patient starts for inhaled prostacyclins as the best-in-class option.
This steady forward momentum is being achieved across PAH and PHILD, with new patient prescriptions roughly equal now between the two indications. Patient starts remain at 75% naive, 25% transitions from other prostacyclines. Importantly, breadth and depth are also improving in a measurable way. We have increased total prescribers to around 860, as centers gain confidence and usage expands in the community. A key indicator of that depth is that roughly 25% of physicians have already referred five or more patients, which is exactly the pattern you want to see when a therapy evolves into becoming the standard of choice rather than an initial trial.
If 2025 was the start of the full commercial phase, 2026 begins the full clinical exploration of what may be possible with Eutremia and L606. Our development strategy is built on principles we have understood for a long time with prostacyclin. Exposure drives efficacy, tolerability drives durability, and convenience drives compliance. Each of these elements is critical to the totality of therapeutic experience and speaks to the high bar that Utopia has quickly established around safety, efficacy, and convenience.
This year, we will look to further cement this best-in-class product profile via the initiation of multiple new studies, including studies that will transition patients from oral and inhaled prostacyclin therapies and a study with new combinations, like adjunctive studies with cetiracet, that we hope will further advance the changing standard of care. Further, we will work to initiate new studies to support expansion into additional disease areas, such as systemic sclerosis-associated Raynaud's phenomenon and PHCOPD, where high unmet addressable need remains. And, of course, we will look to move the therapeutic needle even further via the advancement of our next-generation L606 pivotal study with the study initiated in multiple territories and enrollment expected to begin in the following quarters.
Importantly, this disciplined expansion of clinical evidence will be funded by cash flow from operations and will help grow the value of the franchise and the company. With that, I will turn it over to Mike.
Michael Kaseta: Thank you, Roger, and good morning, everyone. Our financial results are a direct reflection of two things: sustained patient growth and retention, and disciplined execution. Over the last nine months, as the referral and start curves have moved higher, so have revenue, margin contribution, and cash generation. For the full year 2025, YUTRAPIYA generated $148,300,000 in net product sales, including $90,100,000 in the fourth quarter, representing 74% growth in net product sales over the third quarter 2025. The fourth quarter also marked our second consecutive quarter of increasing profitability, with not only non-GAAP adjusted EBITDA of $27,300,000 but also $14,600,000 of net income.
We ended the year with approximately $190,700,000 in cash and cash equivalents, having generated $33,000,000 of positive cash flow in the fourth quarter alone. Liquidia Corporation is now operating as a cash-generating growth engine. That is not aspirational. It is visible in the quarterly numbers and on the balance sheet. Roger, back to you.
Roger Jeffs: Thanks, Mike. We are confident in 2026 and the years ahead, as we focus on building the durable franchise with increasing patient preference and a clear path towards at least a billion-dollar franchise in 2027, with increasing growth in the years beyond. With that, operator, please open the line for questions.
Operator: Thank you. Press 11 on your telephone and wait for your name to be announced. To withdraw your question, please press 11 again. One moment for questions. Our first question comes from Ryan Deschner with Raymond James. You may proceed.
Ryan Deschner: Thanks for the question and congratulations on the impressive continued launch so far for Eutrebia. I am curious, given the greater than 2,900 patient starts you are reporting today, where do you think this puts you in terms of current market share? How are you thinking about continued growth in 2026? And then I have a follow-up.
Roger Jeffs: Yeah. Thanks, Ryan. I appreciate you joining the call this morning. It is hard to give an accurate percent market share from a patient number standpoint given the competitor does not disclose their numbers. So what we have done is talked about we have done an analysis based on revenue that maybe, Mike, if you do not mind going through that, speaks to this question.
Michael Kaseta: Yeah. Thanks, Roger, and thanks, Ryan, for the question. To give everyone an idea, inhaled treprostinil revenue for was approximately $550,000,000. As Roger said, despite what our competitors have talked about with seasonality in Q4 in their business and their corresponding decrease in revenue from Q3, that is still an increase of 5% revenue from 2025. The fact that we had an 80% increase revenue quarter over quarter means that we are accounting for more than 100% of market growth in Q4. And again, as Roger had said, that represents a disproportionate share of new patient starts, along with a fair share of switches from Tyvaso.
In terms of what that share is, in Q3, we had, from a revenue point of view, about 10% of market revenue. That increased to 17% in Q4. So we are seeing a significant increase quarter over quarter. As Roger mentioned, the 2,900 patient starts in just nine months since launch, that is through February 28. So we are seeing that continued momentum that we saw in Q4 in the first two thirds of 2026 and feel very excited and bullish on our ability to continue a successful launch.
Roger Jeffs: Thanks, Mike. And, Ryan, just to add, it has been very consistent in terms of trajectory, and we do not see any impediment going forward this year with regard to any change in that trajectory. As we mentioned in the prepared remarks, the depth of prescriptions is increasing. We are working on improving the duration and durability so that scripts stack upon scripts so that revenue growth remains. And I believe you had another question, Ryan?
Ryan Deschner: Yeah. Thanks for that. With the new outcome data from a competitor that came out recently, what is your take on the potential impact of a new addition to the oral prostacyclin receptor agonist mix on the Utopia launch?
Roger Jeffs: Yeah. I mean, it is a good question. First of all, congratulate Therapeutics on a successful trial with a PID1 selective agonist. I think for us, it really does not have any impact at all. If you look at it, it is more like Uptravi than not. They are both in the nanomolar range. I think potency-wise, they are generally similar.
Their target binding profile is highly selective, just the IP1 agonist, and I think the results are similar you are seeing: an effect long term over years in clinical worsening with a very muted effect on symptomatology, which primarily, if you look at the six-minute walk distance, which they did not disclose, they said it was significant, but my guess is it is muted. As you know, with Uptravi, they had no statistical significance or clinically significant change in six-minute walk distance. In these patients, when you are talking about a first edition of prostacyclin, the patients are symptomatic and looking for improvement. So I do not think the oral therapies are going to give that bang for the buck.
What they are going to bang is the GI. And if you look at the AE profile that was shown, you could see a high degree of GI side effects: diarrhea, emesis, and nausea. So I think it is more of the same. And all the results that Mike just talked about in terms of our launch trajectory and success are in the presence of Uptravi being in the market. So it is really, to me, an interchange between how Ralinepag will compete with Uptravi in the marketplace once it is launched. So not that concerning.
I think also, if you look at their box-and-whisker plot, while they did have success across a lot of different subgroups, one thing that was not differentiated was dose. So it does not seem like there is an ability to dose to better outcome there. So what you see is what you get based on probability close to the initial start dose. So, again, more of the same, and I do not think it will be impactful in any way in terms of how we view our business. Thanks for the question.
Ryan Deschner: Got it. Thanks.
Operator: Our next question comes from Julian Harrison with BTIG. You may proceed.
Julian Harrison: Hi. Congrats on the progress, and thank you for taking the questions. Roger, I am sure you are very familiar with soft mist inhalers. Can you help us better understand the differentiation potentially of utremia, maybe L606 as well, relative to a soft mist inhaler that was recently announced by another company in the space? Then as a follow-up, regarding the PAH versus PHLD split of on your Tripeas, should we still be thinking about that on approximately a three-to-one basis? How do you see that evolving over time?
Roger Jeffs: Yes. I will answer the second question first and maybe ask Scott to help me with the second. We have moved to a pretty equal split now between PAH and PH ILD. There is clearly more white space opportunity in PHILD. And I think one of the things we are doing is we are going to grow our sales force significantly, by a third. We are going to have a larger share of voice, and the purpose of that larger share of voice is to get into the community, particularly into the PHILD space, to continue to penetrate that market, drive awareness, and either drive starts or drive referrals. Over time, that should become an increasing value proposition.
But in PAH, do not forget, we have not only the inhaled market opportunity, but we are also going after the oral and parenteral opportunity. So on aggregate revenue numbers, they may appear similar in terms of the business opportunity, but in pure patient numbers, I think PHLD has the opportunity to be more successful. Scott, do you have any other responses that you would like to add?
Scott Moomaw: Well, I think I would—excuse me—I would completely agree with everything Roger said. It has been interesting to see PAH get off to a fast start. But as we mentioned, PH ILD has come on strong and, you know, about half. Where it is going to go from here, I think PH ILD—we know PH ILD is definitely the bigger opportunity long term, as Roger called it, the white space. But there is still a load of opportunity in PAH. Where it will settle out eventually, I think PHILD definitely will be bigger, but there is a lot of growth in both buckets right now to continue in the near term.
Roger Jeffs: Yeah. Great. Thanks, Scott. So again, Julian, there are multibillion-dollar opportunities in each indication. We are excited about the opportunity that Eutrevion, and subsequently L606, will have in these markets. With regard to the SMI, I know it is a seminal question for everybody and front of mind because there were some pretty hyperbolic comments made about it. What I would say is I think their commentary in general sounded very much to me that it was validating because it sounds like they are trying to develop a product that has the product profile of eutrophia. And what is that? It is an easy-to-use, low-resistance device with high portability.
There is mitigation of cough, but for us, it is specifically done via the print formulation and engineered particles in the lower end of the respirable range. And then dosing flexibility due to that tolerance, which then parlays, as we have clearly shown in the ASCENT study, we can rapidly and aggressively dose patients to two or four times the past standard with absolutely no exacerbation in cough in a population of PHLP patients who have a baseline cough and a high predilection for exacerbation of cough when they take inhalation therapy. So is porting an ideal product profile.
What Mike described is we are clearly getting a lot, if not most, of the NRx share, and our TRx share is catching up over time. The SMI to me is just a repurposed opportunity. If you go back to the July patent that has a prior date of 2006 and look at example one in particular, it talks about a single-dose acute administration of treprostinil using an SMI. And in that same patent, there is a single acute dose with ultrasonic nebulizers that is Tyvaso nebulized, Tyvaso as we know it today.
What that showed is that in PAH patients, with a single low dose, cough was prevalent, and it described the MMAD, or the median diameter, of those to be in the 4 to 5 micron range. So nothing different. You are giving Tyvaso solution. You are not doing anything to improve its tolerability or penetration to the lower airway. You are just using a different way to present an aerosolized mist. It does not really matter if you use a soft mist inhaler. Yes, that is probably better from a portability standpoint, but that will be it. It will still present itself clinically in terms of how it behaves as Tyvaso nebulized. We do not really view it as competitive.
You would have to ask the competitor to explain the comments they made around tolerability. They have said they still have to do bioequivalence. So whatever data they have, my guess is it is just single-dose acute studies in normal volunteers, which is a very bad proxy for what may happen in patients with a high predilection of cough. The truth to that statement is, remember, they launched Tyvaso DPI, they had no data in patients. It was done on bioequivalence in PHILD. You have seen the issues they have had through the National Jewish State in particular, with the DPI and PHILD.
Now it seems like they have capitulated, and I feel that DPIs are now not useful, at least their DPI, and they are trying to pivot to another methodology. But I do not see that methodology as providing any forward-looking benefit. That is my quick view on it. Rajeev, you have some broader statements around perspective because this has been tried before in other markets, and if I could, I would ask you to speak to those instances, if you will.
Rajeev Saggar: Yeah. Sure. Thanks, Roger. I think I just want to highlight some key points here. I think the signature of the SMI was primarily derived from the Spiriva Respimat, and that was done at a time when the CFC propellants were being removed. Also, there was a patent issue from that company, and they compared it to Spiriva HandiHaler, which is their dry powder formulation. At that time, the HandiHaler was the highest-resistance device ever to be developed in patients with asthma and COPD, which, as you know, is tens of millions of patients. The only device that has a higher resistance than the HandiHaler to date is actually the Tyvaso DPI device that is used in PH/PHLD.
What is really interesting is with all the studies done comparing the soft mist inhaler to a dry powder inhaler using the same formulation—in this regard it was tiotropium—the SMI has never been shown to change the clinical efficacy, the pharmacokinetics, and, most importantly, has never been shown to improve or modify safety and/or tolerability inclusive of the concerns for cough. I want to highlight, as Roger spoke to, that the SMI does not port any substantial benefit besides the portability itself.
Roger Jeffs: All right. Thank you, Rajeet. Operator, next question, please. Thank you.
Operator: Our next question comes from Amy Li with Jefferies. You may proceed.
Amy Li: Hey. Thanks so much for taking our question, and congrats on the momentum. When we look at your path to the $1,000,000,000 revenue target in 2027 that you laid out, our math suggests that implies sustained patient adds from here. Is that the right way to think about the trajectory? And more importantly, what gives you confidence in maintaining your current pace in the next couple of years? How much visibility do you have into the patient funnel and where are the patients coming from? And are you still confident in that number in light of the potential emerging competitive dynamics like SMI?
Roger Jeffs: I will ask Mike to speak to how we get there, at least from a revenue calculation standpoint. As we just said, Amy, we do not see any influence from the SMI. I think it is going to be Tyvaso in a perhaps more portable format from using jet nozzles to create aerosolized particles. As I said, they are going to be polydispersed, they are going to cause cough, and they are going to have titration issues. I do not see that impacting us in any other way. As you are noting in the competitor’s revenue, the nebulized business is decreasing mostly because we are beginning to take that share away. I think more of that will continue to happen.
Mike, do you want to talk about how we see ourselves continuing to climb the mountain towards at least $1,000,000,000 in revenue in 2027?
Michael Kaseta: Yeah. Amy, thanks for the question. If you just look at—start with what I talked about earlier—the market in the quarter was over $500,000,000, which means the inhaled treprostinil market is already a $2,000,000,000 market. Then talk about our share of that revenue, which has increased considerably quarter over quarter. We believe that will continue as well. Then you look at the opportunity that we talked about in PAH with the $2,000,000,000 oral opportunity, where we believe there will be significant opportunity for us to gain significant share. So that is another $2,000,000,000 opportunity just within PAH that we see. And then, as Scott and Roger said earlier, we are just scratching the surface in PH ILD.
We are enhancing our sales force. We are getting more penetration, getting further into the community. When you look at the overall opportunity—a current $2,000,000,000 market opportunity in inhaled treprostinil plus the oral opportunity plus the enhanced white space in PH ILD—we feel very bullish in our ability to continue on this trajectory and continue on this path to get us to, as Roger said at JPM, Utrechtia being a billion-dollar product in 2027.
Roger Jeffs: Yeah. I think the other thing, Amy—great response, Mike—is, look, we are doing directed studies that are going to transition patients from the competitive agents, either oral or inhaled, and show the benefits of moving those patients to the drug for tolerability and efficacy. All of these things will continue to build a portfolio and a suite of evidence and data-driven proof that UTRAPI is the best-in-class and first-in-choice product. Operator, next question, please.
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Operator: Thank you. Our next question comes from Serge Belanger with Needham. You may proceed.
Serge Belanger: Hi. Good morning. First question on the legal front. Any new updates or developments that you can share with us? And then secondly, regarding payer access, I think you reported another 85% patient start conversion. I am curious how that number varies across the Medicare and commercial segment, and what additional coverage work is required. I know you had coverage from three major commercial payers, but what additional payers need to come online over the remainder of 2026? Thank you.
Roger Jeffs: Sure. Hey. Good morning, Serge. Thanks for the question. I will take the legal, and then I will pass it to Mike for payer. Really nothing new from what we said at JP Morgan, Serge. Just a reminder for those who may be newer to the story that the oral hearing was in June. Post-trial briefings were completed in August, so we are now approaching nine months from trial and seven months from the post-trial briefing. We think we are in the sweet spot for when an opinion should and could be rendered, but, obviously, it has been taking longer than we all expected, so I cannot really probabilize on when it actually will come down.
What I would say is we remain very confident in the arguments that we made, and we strongly believe that we should win and the case should read out favorably to us. We acknowledge there are a lot of potential options here or outcomes. But regardless of what happens, we are prepared for any and all outcomes. Really nothing new to state today other than we remain confident in our position and look forward to hearing from the judge in due time. Mike, if you will talk about payer access, please.
Michael Kaseta: Yeah. Serge, great to hear from you. Where we are with payer and pull-through is just another example of how we have executed on this launch. Scott and his team have done a masterful job. The fact that we have maintained 85% plus of pull-through since the very early stages of the launch is simply staggering, and we continue on that pace. We have also said from the beginning of launch that our goal is to make sure that patients have a choice if they want to use utrapia.
What we can say is we have achieved that, and we continue to work through our pull-through, making sure that we provide a suite of services to patients to make that, if they want utrebia, they can get it. I think that is evident in that pull-through percentage, and we do not see any change in that coming. Our goal will always be to improve that as we move forward, but I really think we are already in a best-in-class state being at 85% plus pull-through percentage.
Roger Jeffs: Great. Thanks, Mike. Operator, next question.
Operator: Thank you. Next question comes from Benjamin Burnett with Wells Fargo. You may proceed.
Benjamin Burnett: Hey. Thanks very much, and congrats on all the progress. I just wanted to see if I could get a little bit of color on some of the launch dynamics into the first quarter. Anything you can say around inventory stocking trends or the refill rate that you are seeing?
Roger Jeffs: Yeah, Mike, if you would not mind commenting on that.
Michael Kaseta: Yeah, Ben. Thanks for the question. As we said in our release, and as Roger reiterated already, we already had a strong January and February when it comes to both new patient starts and referrals. We are staying on the exact same trajectory we were on in Q4. We have often gotten questions from analysts and from comments from our competitors about seasonality. We have seen nothing but increases across the board, and as we show today, we continue to see those increases. As Roger said, we are still very confident as we move through the rest of Q1 into Q2 and are on our path to be a billion-dollar product in 2027.
As it relates to inventory and stocking, I think we are now at the point of the launch, nine months in, where we have really normalized, and I do not expect there to be any significant swings now. Especially distributors can make decisions at the ends of quarters that we do not have influence over, but at the end of the day, we are tracking well. Our demand is extremely strong, and as a result, we feel very confident in the revenue as we move forward.
Benjamin Burnett: Okay. Extremely helpful. Thank you. And I guess just also regarding the systemic sclerosis RP program, I thought that was interesting. Could you maybe walk us through the evidence in support of treprostinil and what your path forward is there?
Roger Jeffs: Yeah. I would love to. Rajeev, if you would not mind talking about the Raynaud’s program?
Rajeev Saggar: Yeah. Sure. Thanks for the question. Systemic sclerosis is a rare condition overall, and by the nature of the topic of “systemic,” they have multiple disorders affecting multiple organ dysfunctions, inclusive of the most deadly, which is PAH and PHLD. Despite that, their single most complaint of what drives their quality of life is the problem that occurs with Raynaud’s phenomenon, which occurs in at least, and it is debatable, somewhere between 90% to 95% of all patients with systemic sclerosis or scleroderma.
The reason why we think we have good rationale is that many of the drugs that have been approved for pulmonary hypertension have been studied specifically on the end complication of Raynaud’s phenomenon, which is known as digital ulcers, inclusive of prostacyclines. In fact, in the European and U.S. guidelines for the management of Raynaud’s phenomenon, Iloprost and/or Flolan is used as salvage therapy in the event that patients are recalcitrant to treatments such as calcium channel blockers and even PDE5 inhibitors, which are used off-label.
That shows that the prostacyclin class in and of itself is able to prevent worsening of ischemic episodes, therefore potentially leading to avoiding issues of gangrene and/or amputation of the digits that are affecting these patients. One of the challenges: oral treprostinil was studied in this condition again to try to modify the digital ulcers. The problem with that was the trial was fraught with tolerability issues and patients coming off because of the intolerability of oral treprostinil, again highlighting that if we can provide utrebia for these patients, we know that the tolerability profile of the inhaled treprostinil is significantly improved.
We also know from our data that we can dose to a significantly high level, ensuring that we obtain an appropriate pharmacokinetic profile to modify the disease. We look forward to initiating our Phase 2a program in systemic sclerosis RP near the end of the year.
Roger Jeffs: Great. Thank you, Rishi. Next question, operator.
Operator: Thank you. Our next question comes from Jason Gerberry with Bank of America. You may proceed.
Jason Gerberry: Hey, guys. Thanks for taking my question. Two for me. First on PAH, I wanted to get your view on the role for an inhaled treprostinil in the PAH setting. It is a bit confusing. On the one hand, your competitor flagged that maybe inhalation approaches are going to see a diminished role in PAH. When we talk to KOLs, what they are saying is they are not putting new starts on Uptravi. But when we look at IQVIA data, the NRx looks pretty stable. So a lot of conflicting data points in this, and it is a dynamic space. Wind River is now getting used more in newly diagnosed PAH.
How do you see this dynamic where the role of oral versus an inhaled prostacyclin in PAH? And then my second question for Mike: when I look at fourth quarter numbers, it looks like really good revenue per patient to take the average, the 3Q number versus the 4Q number, over sales or under sales, I should say. When we look ahead to 2026, it does not seem like there is going to be a huge gross-to-net adjustment in the numbers relative to the patients and the revenue capture, but I wanted to get your perspective there. Thanks.
Roger Jeffs: Yeah. Thanks for the question, Jason. I will speak to the PAH issue in terms of oral versus inhaled. I think the field is moving. The paradigm is shifting to where patients are not going to be willing to accept off-target effects any longer because the burden of those off-target effects can be as bad as the burden of the disease in terms of impact on daily living. The orals, clearly, if you look at the frequency of AEs related to the GI toxicities, they are significant. They occur daily; they occur over hours in the day. If you then pair that with minimal symptomatic benefit to the disease, that benefit-to-risk exchange is not a good negotiation for the patient.
Going forward, particularly as we continue to evolve data around the ability of utrepia to dose titrate, drive effect, and really eradicate off-target effects to the GI, or from parenteral issues related to septicemia and site pain and irritation, nobody would be willing to make a trade-off because now you can get the symptomatic benefit without sacrificing your daily living through these off-target effects. I do think, and our competitor said it when they spoke about their SMIs, people are tired now of off-target effects, and people want to see a better benefit-to-risk profile, which Utopia provides. It is a four-times-a-day therapy, so that would be the only negative there. We are going to negate that negative with L606.
The importance of that study is it will achieve, in a different way through liposomal encapsulation, all the benefits of utremia, but now in a twice-a-day format. It will also minimize peak-to-trough excursions so that trough benefit is steady to the peak benefit. What we are trying to do as a company is really improve patient outcomes, have patients feel better, remove these off-target effects, and then get them to a point in time where they can take an easy portable therapy without risk. I think we are well on our way to doing that. Clearly, Treppi has become the preferred inhaled, and as we continue to cannibalize share from orals, you will see more and more of that.
Again, very excited across the board. Mike, if you will talk about the fourth quarter dynamics.
Michael Kaseta: Yeah. Jason, thanks for the questions. As we look at our gross-to-net from 2025 to 2026, as we said in previous quarters, working on access in the back half of the year, we had some new-to-market blocks that had existed on the commercial front. Those were slowly removed. The result of that is going to be twofold. One, we will pay more rebates on more of our business as we move forward in 2026, but that will be offset by having more patients having access. What I would say is, as we have kept saying, we are extremely confident in our trajectory as we move into 2026 and into 2027.
Maybe there will be a very small incremental increase in our gross-to-net, but that goes to our goal of making sure patients have choice and patients have access. We will have achieved that goal, and I think we will sit at a place where we are very comfortable and can still achieve our goals in 2026 and, as we have said, being a billion-dollar product in 2027.
Roger Jeffs: Thanks, Mike. Great. Operator, I think we have time for one more question.
Operator: Thank you. Our next question comes from Gaurav Maini with LifeSci Capital. You may proceed.
Gaurav Maini: Hey. Good morning, everyone. Congrats on the great print and continued strong launch of Eutropia. Just two for me, if that is okay. Could the team give some color on that one-in-four prostacyclin transition patients and what bucket of prostacyclin therapy, i.e., oral versus inhaled, these patients are coming from? And then secondly, on the new exploratory utremia trials, can you describe how these are expected, or if they are, to be label-enhancing?
Roger Jeffs: Yep. Maybe I will ask Scott to talk about how the transition market—the demographics of that—and then Rajeev will speak to the benefits of the trials that we are doing. Scott?
Scott Moomaw: Sure. As you alluded to, we said that 75% of the patients are new to prostacyclin and then 25% are switch. Obviously, in PHID, there are not other options, so those switches are coming from inhaled. In PAH, what we said is that about 30% of the 25% in PAH are coming from the orals, and then the bulk of those are coming from inhaled. We are starting to see more patients transition off of parenterals onto utrepsia. I do not think that is going to necessarily become material in terms of the switches, but it is interesting and shows that in the future we will probably encroach on the parenteral space.
When I am out there in the market, I can tell you that the enthusiasm around using utrebia instead of the oral prostacyclins, for all the reasons Roger elucidated earlier, is only growing. We think that whether they are switching the patient off of an oral prostacyclin or they are using UTRPA—utopia—instead of an oral prostacyclin, there is a big opportunity for that force.
Roger Jeffs: Great. Thank you, Scott. Rajeev, if you will speak to the trials, please.
Rajeev Saggar: Yeah. Thanks for the question. I firmly believe we are entering into a decade and beyond of an inhaled renaissance in PAH and PHLD. I think Utopia is leading the charge today, and L606 is going to definitely be there tomorrow. The trials that we are purposely conducting are defining how to switch. It is very clear that practitioners across the board, from the role of prostanoid to utopia—I think we highlighted a few things on this call. Number one, they are very interested in delivering the most tolerable drug. I think this has been highlighted by the addition of sotatercept to the armamentarium, which has completely negated and limited the utility of parenteral therapies at this time.
We have several large anecdotal cases of utremia being used acutely in the hospital and to combine that also with sotatercept to maximize the benefit of that combination. In regards to oral prostanoid, we plan switch studies from select sites to utrebia. It would detail to the practitioners how to do that effectively and safely. Also, the advantage of Eutropia is that we can dose two to four times what is typically used traditionally by Tyvaso. In those studies, we will also highlight some of the hemodynamics of utropia, which I think would be very exciting.
In regards to label-enhancing, I think we reserve the right to always present our data to the Agency for consideration for label discussions in that regard. Finally, the sotatercept study: the purpose of this study is to transition patients that are on sotatercept in combination with either forms of prostanoid inclusive of parenteral and/or oral and transition those off those therapies safely and effectively to utremia. Those are the studies that we are keenly working across to initiate this year.
Roger Jeffs: Thank you, Rajeev. Very well said, both from you and Scott. I will close by saying, as you can hear, Liquidia Corporation is all in for our patients and trying to provide better and better opportunities both now and in the future. We look forward to speaking with everyone again in May when we update you on our Q1 outcome. Thank you, everyone.
Operator: Thank you. This concludes the conference. Thank you for your participation. You may now disconnect.
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