TLDR
- Liquidia (LQDA) stock jumped 29% to $34.80 on Wednesday after a $380.7 million settlement with United Therapeutics.
- The deal ends all six lawsuits covering patent, trade secret and antitrust claims.
- Liquidia must stop selling Yutrepia to patients with pulmonary hypertension associated with interstitial lung disease.
- BTIG upgraded the stock to Buy with a $70 target, while Wells Fargo raised its target to $33 from $30.
- Needham cut its target to $58 from $72 but kept a Buy rating.
Liquidia (LQDA) stock jumped 29% to $34.80 on Wednesday after the company settled its legal fights with United Therapeutics. The stock had fallen 22% this year as of Tuesdayās close, according to Dow Jones Market Data.
The deal totals $380.7 million. It resolves all six pending lawsuits covering patent, trade secret and antitrust claims.
The news came two weeks after Liquidia lost a patent trial against United Therapeutics. The rival has sued Liquidia over patents since 2020.
What the Settlement Covers
United Therapeutics alleged Yutrepia infringed patents covering dosing methods, formulas and treatment indications. Those claims are now off the table.
Patients with pulmonary arterial hypertension will keep uninterrupted access to Yutrepia. That removes the risk of an immediate stop to sales and the expected appeal.
There is a catch. Liquidia must stop selling Yutrepia to patients with pulmonary hypertension associated with interstitial lung disease.
Management said it does not expect to lose future profits from patients in that group who already take Yutrepia. Liquidia plans to file the full settlement details in an 8-K.
Investing.com also reported that Liquidia will end its injected treprostinil operations. The company will pay the $380.7 million in damages to United Therapeutics.
Analysts React
BTIG upgraded Liquidia to Buy from Neutral with a $70 price target. Analyst Julian Harrison said the outcome was ābetter than the best-case scenarioā the firm had pictured.
The target is based on 20 times BTIGās 2027 estimated fully diluted non-GAAP earnings per share. With the stock at $26.81 early Wednesday, that implied 161% upside.
Wells Fargo called the settlement āpositiveā and raised its target to $33 from $30. It kept an Equal Weight rating.
The firm pointed to preliminary fiscal third-quarter Yutrepia sales of $222.7 million, up 31% from the prior quarter. It projects peak sales of $971 million in 2029.
Wells Fargo does expect it to be harder to add new interstitial lung disease patients. Revenue should still grow as current patients stay on treatment.
Needham took a more careful view. It cut its target to $58 from $72 but kept a Buy rating, saying the lower figure reflects lost sales in the interstitial lung disease group.
Liquidia did not respond to a Barronās request for comment. United Therapeutics (UTHR) traded at $542.18, down 0.2%, on Investing.com at 10:29 a.m. EDT, though Barronās reported a 0.2% gain for that stock.
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