LQ LQDA Liquidia Corporation Loading... : Investor Sentiment and Bull/Bear Views

Calls LQDA cheap at 33 given the news, an own bullish valuation view. No position disclosed.

The author argues LQDA fell ~60% on an unfavorable ruling that Yutrepia infringes a UTHR patent covering the PH-ILD segment, but the most probable outcome is only losing the PH-ILD label while keeping PAH marketing and legal off-label prescribing. Because PH-ILD is roughly 60% of current revenue, the author believes the $26.5 price is ~30% below the most probable outcome and expects $35-40 once the appeal and FDA situation settle in the next few months. Main stated risk is the appeal outcome and UTHR's push for FDA revocation of Yutrepia's approval.

The author argues LQDA fell ~60% on an unfavorable patent ruling covering only Yutrepia's PH-ILD segment, while the drug remains approved and doctors can still legally prescribe it off-label, so the market has over-punished the stock. They expect that once the appeal and label issues settle over the next few months, shares will recover to $35-40 from $26.5. The main risk is that Yutrepia must drop the PH-ILD label, which represents about 60% of current revenue, and UTHR is pushing the FDA to revoke approval.