LQDA

Liquidia Corporation has entered into a sixth amendment to its agreement with HealthCare Royalty to provide for up to an additional $100M of financing in three tranches, subject to certain closing conditions including the funding conditions discussed below. Liquidia intends to use the proceeds to fund ongoing commercial development of YUTREPIA inhalation powder for the potential treatment of pulmonary arterial hypertension and pulmonary hypertension associated with interstitial lung disease, continued development of YUTREPIA in other clinical trials, including but not limited to trials for pediatric patients and trials further evaluating the use of YUTREPIA in WHO Group 1 and WHO Group 3 patients, clinical development of L606 and for general corporate purposes. Under the terms of the Sixth Amendment, Liquidia will receive $25.0 million at closing with the potential to receive two additional tranches of funding: $50.0 million upon the first commercial sale of YUTREPIA following receipt of final FDA approval for the treatment of PAH and PH-ILD, so long as no injunction has been issued prohibiting Liquidia from commercializing YUTREPIA for either or both of PAH and PH-ILD, and $25M upon the mutual agreement of the parties after achieving aggregate net sales of YUTREPIA in excess of $100M at any time on or prior to June 30, 2026. As consideration for the additional $25M funded at closing, Liquidia has agreed to a fixed payment schedule that terminates in 2032. Payments on the last two tranches, when funded, would also follow a fixed payment schedule. The aggregate payments to HCRx are capped at 175% of the total amounts advanced by HCRx, but also include a potential true-up payment to be made by Liquidia if HCRx's internal rate of return is less than a minimum rate of return on the date the cap is reached. The minimum rates of return for the three new tranches are 16%, 13% and 12%, respectively.

Scotiabank analyst Greg Harrison raised the firm's price target on Liquidia to $34 from $30 and keeps an Outperform rating on the shares. Liquidia's Q4 call reinforced the company's commercial readiness ahead of Yutrepia's approval in pulmonary arterial hypertension and pulmonary hypertension associated with interstitial lung disease, with the drug expected to be granted full approval in late Q2, the analyst tells investors.

Needham analyst Serge Belanger named Liquidia a top pick for 2025 with a Buy rating and $19 price target. The stock was also the analyst's top pick for 2024, and "disappointed" with a negative 2% performance mostly due to the mid-August setback when the FDA delayed approval by retroactively granting Tyvaso DPI a three year exclusivity dating to 2022, Needham points out. The firm says its "investment thesis is stronger now than a year ago." It has a "clear line of sight" for FDA approval of Yutrepia in both pulmonary arterial hypertension and pulmonary hypertension associated with interstitial lung disease by May 23. Yutrepia will launch into an opportunity that will have grown into a $2B market by mid-2025, on its way to over $3B-$4B by 2030, contends the firm.