Liquidia stock shot higher Tuesday after its new drug, Yutrepia, widely beat prescription and patient start expectations in its first quarter on the market.
Yutrepia treats pulmonary arterial hypertension and pulmonary hypertension associated with interstitial lung disease. The former is a form of high blood pressure in the arteries of the lungs. The latter refers to disorders that cause inflammation and scarring of the lung tissue.
Liquidia's drug launched in early June. As of Aug. 8, specialty pharmacies have reported more than 900 prescriptions for Yutrepia have led to north of 550 patient starts. That suggests there's been an early bolus of patients to start Yutrepia, according to Oppenheimer analyst Andreas Argyrides.
On today's stock market, Liquidia stock jumped 13.7% to 24.10. Shares broke out of a double-bottom base with a buy point at 18.60 on July 24. The stock later fell as much as 9.6% on Aug. 1, triggering a sell rule. Savvy investors are encouraged to cut their losses when a stock falls 7% to 8% below its entry.
Liquidia Stock Surges
Liquidia expects 75% of patients to start treatment with Yutrepia after receiving their prescription.
Argyrides says it will be key to watch the rate of patients that discontinue treatment. In Liquidia's study called Ascent, 18.5% of patients dropped out after 16 weeks. These were patients who previously didn't first receive treatment with a rival drug called Tyvaso from United Therapeutics.
But Liquidia Chief Executive Roger Jeffs noted on the earnings conference call with analysts Tuesday morning that none of the patients discontinued treatment due to serious of drug-related side effects, including cough.
In contrast, he called out a 69% discontinuation rate over 40 days for United's Tyvaso at the National Jewish Health Center, a leading pulmonary care center. The primary reasons for discontinuing were cough and clinical worsening, Jeffs said.
In an email to Investor's Business Daily, the company noted interim analysis of the ongoing open-label extension study "reinforced YUTREPIA's tolerability profile at higher doses" between weeks eight and 16. Patients also showed improvements in six-minute walking distance at those same time periods.
Importantly, patients who titrated up to a median dose of Yutrepia at weeks eight and 16 showed no change in their average cough scores.
Liquidia's Battle With United
It's important to note that Liquidia and United are involved in a patent battle. United alleges Liquidia infringed on its patents. Both Tyvaso and Yutrepia use an inhaled version of treprostinil to treat PAH and PH-ILD. Oppenheimer's Argyrides sees Yutrepia's launch as being at risk. If United wins at trial, Liquidia could lose its ability to market Yutrepia to ILD patients until 2042, he said in a report.
But Liquidia remained upbeat. On the call, an executive — not identified by the transcript — said he doesn't see Liquidia as being at a disadvantage.
Argyrides has an underperform rating on Liquidia stock. But the other eight analysts who follow Liquidia stock, according to FactSet, have buy ratings. Following the earnings release early Tuesday, LifeSci Capital analyst Cory Jubinville raised his price target on Liquidia shares to 54.
Needham analyst Serge Belanger also upped his price target to 36 from 32. He rates Liquidia stock a buy.
"The initial pace of adoption and updated ASCENT trial results reflect Yutrepia's differentiated profile (improved tolerability and higher dose levels) that support best-in-class potential for PAH/PH-ILD," he said in a report to clients.
Mixed Second-Quarter Report
The second-quarter was ultimately mixed. Liquidia came in with $8.8 million in sales, beating calls for $4 million, according to FactSet. Liquidia lost 49 cents per share, deepening from a year-earlier loss of 38 cents a share. That missed calls for a lighter 42-cent loss per share.
Liquidia stock has a strong IBD Digital Relative Strength Rating of 94, putting it in the leading 6% of all stocks when it comes to 12-month performance.
Follow Allison Gatlin on X/Twitter at @AGatlin_IBD.
