Liquidia Corporation

Good morning and welcome to Liquidity Incorporation First Quarter 2026 Financial Results and Corporate Update Conference Call. My name is Jonathan and I will be your operator today. All participants are currently in a listen-only mode. Following the presentation, we will conduct a question and answer session. Instructions for joining the queue will be provided at that time. Please note that today's call is being recorded. And now I'd like to turn the call over to Jason Adair, the Quidius Chief Business Officer. You may proceed.

Thank you and good morning, everyone. It's my pleasure to welcome you to our first quarter 2026 Financial Results and Corporate Update call. Joining me today are Dr. Robert Jeffs, Chief Executive Officer, Michael Cassetta, Chief Operating Officer and Chief Financial Officer, Dr. Rajiv Sagar, Chief Medical Officer, Scott Mumal, Chief Commercial Officer, and Rusty Shundler, our General Counsel. Before we begin, please note that today's discussion will include forward-looking statements, including statements regarding future results, product performance, and ongoing clinical or commercial activities. These statements are subject to risks and uncertainties that may cause actual results to differ materially. For further information, please refer to our filings with the SEC, which are available on our website. Please also note that our earnings release and our commentary include non-GAAP financial measures. Reconciliations of these non-GAAP financial measures to the most comparable GAAP measures can be found in our earnings press release. With that, I'll turn the call over to Roger.

Thanks, Jason, and good morning, everyone. We're delighted to share our business results with you today. We'll keep our prepared remarks somewhat brief this morning as we'd like to allow as much time for questions as we can. Having said that, I'd like to share some bigger picture thoughts regarding the state of the business and allow the Q&A to serve as the time to delve into the specifics. Three full quarters into the commercial launch of Utopia, I would summarize the state of our business with three main points. The first is that in the third full quarter on the market, Utopia is now leading the growth of the inhaled prostacyclin category. eutrapia is well on its way to becoming the anchored inhaled therapy for patients with PAH and PHLD. As of April 30th, we have received approximately 4,500 unique patient prescriptions and started approximately 3,750 patients on therapy since launch. And approximately 980 physicians have prescribed eutrapia since launch. This breadth of prescriptions is also complemented by increasing depth of prescriptions. For example, Just since the end of February, the number of physicians who have prescribed eutrefia to five or more patients has grown 25% to approximately 270 physicians. What this clearly demonstrates is that physicians who try eutrefia are coming back to it for more and more of their patients. That is the pattern you see when a therapy is becoming foundational to a treatment paradigm, not when it is being trialed as an alternative, and strongly suggests that eutrefia is already establishing itself as the best in class and first in choice inhaled therapy. This increasing breadth and depth of prescriptions is driven by a product profile that is setting a new bar for others to match, one where targeted pulmonary delivery minimizes off-target effects with a formulation technology that preferentially lessens upper airway intolerance while enhancing local effects on the alveolar capillary membrane. This allows for higher dose attainment and, most importantly, better and more durable patient outcomes. The second main point is that we are purposefully and diligently broadening the opportunity in front of us by launching additional studies. We have started recruiting into cohort B of the ASCENT study to transition inadequate responders from Tyveso DPI to eutrophia in order to provide empiric evidence that higher doses of eutrophia are uniquely well tolerated and advantage versus competitive alternatives. Additionally, we are actively screening patients in our pivotal phase three respire study of L606 the most tolerable inhaled trypostenol study to date, as evidenced by our 48-week data from the open-label US study in PAH and PHLD patients. In addition, we are also advancing clinical programs to expand the role of inhaled prostacyclin into other serious pulmonary and vascular diseases, such as IPF, PPF, PHCOPD, and scleroderma-associated Raynaud's phenomenon. For all of these opportunities, mechanistic validation largely exist, yet unmet need and high opportunity value remain. We believe the differentiated tolerability and dosing profiles of both eTrophy and L606 is foundational to that opportunity, as it may support improved patient retention while also enabling higher therapeutic exposures over time. The through line of our clinical investment is that we have extraordinary and real potential to expand the franchise value of our portfolio by multiples in the years to come. with therapies that reimagine what a best-in-class profile must be. The third main point is that we have established a profitable, self-funded business in a remarkably short period of time. We have now delivered our third consecutive quarter of profitability, with top line growing, bottom line growing, and cash growing, which Mike will expand on shortly. What that gives us is the freedom to reinvest our own profits into the next phase of the company's growth. We are building new manufacturing capacity. We're advancing both eutrophia and L606 in a related array of clinical studies. And we are doing all of it from operating cash flow rather than via the capital markets. This is rare in our business, especially at this early stage of our commercial life cycle. To put it all in context, we could not be happier with where the business is today, and we are even more excited about where it is going. Utopia has already exceeded a half billion dollars in annualized net revenue run rate in less than one full year on the market. Our clinical programs are fully funded by operating cash flow, and we have a clear line of sight to at least a billion dollars in net revenue in 2027, with multiple growth opportunities to sustain further growth well into the future. And what gives us confidence in achieving our ambitions is that the engine that gets us there is already up and running flawlessly. With that, I'll turn it over to Mike to walk you through the financials.

Thank you, Roger, and good morning, everyone. As Roger has indicated, the first quarter is a continuation of the story that we discussed in March, sustained patient growth and disciplined execution. Net product sales of Utrepia were $129.9 million in the first quarter of 2026, up from $90.1 million in the fourth quarter of 2025, representing 44% sequential growth in net product sales. The first quarter also marked our third consecutive quarter of increasing profitability, and the growth from quarter to quarter is striking. Net income was approximately $52.9 million, up from $14.6 million in the fourth quarter of 2025. Non-GAAP adjusted EBITDA was approximately $71.2 million, up from $27.3 million. We almost tripled our EBITDA profitability from Q4 to Q1. We've achieved this increase in profitability while continuing to invest more heavily into the commercial organization through our Salesforce expansion and expanding our manufacturing capacity and footprint in North Carolina and in our clinical development programs. We ended the quarter with approximately $222.8 million in cash and cash equivalents, an increase of $32.1 million from year end. So, in addition to growing the top line, we continue to grow the balance sheet that funds our priorities and are confident in our ability to remain profitable in the future. Roger, back to you.

Thanks, Mike. As we close out our third quarter on the market, what stands out to me is how much we have built in such a short period of time. a product that is leading the growth of the inhaled process cycling category in PAH and PAHILD, a pipeline with multiple paths to extend the franchise well beyond where it stands today, and a self-funded business with the freedom to invest in its own future. We have never been more confident in where this company is headed based on the robust momentum we continue to see in this business. With that, operator, please open the line for questions.

Certainly. And ladies and gentlemen, if you do have a question at this time, please press star 1-1 on your telephone. If your question has been answered and you'd like to remove yourself from the queue, simply press star 1-1 again. Our first question comes from the line of Amy Lee from Jefferies. Your question, please.

Excellent. Congrats on the amazing progress, and thanks so much for taking your question. Based on our math, it looks like you're seeing a slight acceleration of unique scripts in patient ads. as well as an improvement in script to start in March and April. Can you give us a sense of what current growth is being driven by in terms of PAH versus PHLD, new patients or switches, academic or community, and any other relevant metrics? And then just a quick follow-up, do you see any read-across from the HCMA versus Ameren Supreme Court case to the 327 litigation? Thanks so much.

Good morning, Amy. Thanks for the question. So there has been a slight acceleration in referrals and patient starts, but I'd say largely things are sustained and consistent. We don't want to forecast accelerating growth here. I think if we sustain the growth that we've seen since the beginning of launch and you just take that as your average, I think everything we've predicted around 2027 being a billion dollar in net revenues still holds true for us. I think Where we're seeing robust growth is, as we sort of highlighted in the script, is in the depth of prescriptions. So we are gaining more prescribers, and we're just getting them to trial the drug. And certainly, as they get to two, three, four, and five starts, then you start to see sort of this almost trigger change where they just begin using eutrapia preferentially. And I think the product profile is speaking for itself. It is redefining kind of what is required for a prostacyclin therapy. You need one that's direct to the site of injury, so it has to be to the lung. It has to minimize lung intolerance as well as off-target effects, which the print formulation certainly does. And then because tolerability and dosing are inextricably linked, It allows for higher dosing, which allows for better outcomes. So, you know, when you have that type of product profile and sites have their own quote unquote critical mass of trialing the drug, it quickly then becomes the preferred therapy, you know, at centers. And that's what we're seeing. We're certainly driving all of the growth in the space currently. If you sort of aggregate our revenue and our competitor revenue over the quarter, the market grew about 5%, and we were responsible for all of that growth, which we're quite pleased about, and I think it speaks for itself about what the leading therapy is. We still see equal scripting opportunities. Between PH and PHILD, the pull-through still remains around 85%, which is extraordinarily good. And the naive and transitions are, again, about 75-25 as it has been before. So it's a bit more of the little engine that could, doing all that it has from day one and sustaining that trajectory. And then, Rusty, maybe you could talk to sort of thinking around HICMA and if there's any read-through from that case.

Sure. Thanks, Roger. Thanks for the question, Amy. So, you know, I think if you look at the HICMA case and look at the briefing and the oral argument, that case really is a case about what's necessary to show induced infringement. You know, obviously that's, you know, what's at issue in our case with at least four of the six claims where the parties are contesting, you know, the therapeutics patents. I think also if you look at some of the conducts, that's at issue in the Hikma case, I think there are some clear parallels to the conduct that United Therapeutics has cited in our case. So, you know, I think there are certainly some similarities now, you know, whether how Hikma is going to be decided, whether it's going to affect Judge Andrews' decision, whether it affects the timing of Judge Andrews' decision, you know, I think that would be speculation on speculation and not an area we're going to get into. But I think, you know, at least based on what we know today, certainly there are some parallels between the cases, but it's really hard to comment beyond that.

Yeah, and I think I would add, look, we remain very confident in the arguments that we made in the case and are bullish on the outcome of the opinion when it's rendered. And I think if there's any read-through from HICMA, we also feel that potentially would go in our favor as well. Operator, next question, please.

Certainly, and our next question comes from the line of Brian Deschner from Raymond James. Your question, please.

Thanks for the question, and congrats on another really strong quarter. By my math, the Utrepia launch has now eclipsed the early launch trajectory for your competitor. In terms of net sales, what does the current split between prescribers in major centers and smaller community prescribers look like, and how is this going thus far for the launch? I'm going to have a follow-up. Thanks.

Yeah, we're fortunate to have Scott Mumma, our Chief Commercial Officer, on. So, Scott, if you wouldn't mind responding to that question.

Yeah, thanks. So, you know, as you would expect, as we mentioned on earlier calls, the centers were jumping in early, you know, as they had those patients there prevalent and ready to go. And they continue to be a mainstay, although I will say we have centers that are coming on even still now, whether they would be, you know, late adopters or they're starting to see those patients back after six months and starting to see the results of eutropia Having said that, we are having more success in the community, whether that be physicians who have used a pH drug before, or even some physicians who are ILD prescribers with the antifibrotics, but who are ready to try a prostacyclin. So the balance is definitely changing a bit more towards what we call the community, but the centers are still the largest cohort. And of course, they actually are still growing as well.

Great. Thanks, Scott. I would just maybe add, again, it's a bit anecdotal, but one of the favorite feedback stories that we continue to get is, again, the competitor product had been on the market for years ahead of us, and it counter-detailed us quite strongly. So when we went to centers, some of the physicians would say they felt that these drugs were more alike than not. But then when we go back to them and they begin prescribing Utrepia, they come back with their own anecdote around that they're seeing a night and day difference, particularly around the cough and the ability to hydrate and drive outcomes. So, you know, it's those types of stories that resonate with me. And I think, you know, again, it's very hard to beat a better product profile. And I think that's what Utrepia supports. Operator, next question, please.

Certainly. And our next question comes from the line of Serge Bellinger from Needham. Your question, please.

Hi, good morning. Thanks for taking my questions. Roger, we're coming up on the one-year anniversary of FDA approval of Utopia. So you've been on the market for close to a year now. How large do you think the PhD ILB opportunity currently stands at, and how large do you think it could be? And then one question for Mike. I notice you're now an income taxpayer at a company. I'm just curious if this is a one-off where you expect to continue paying income taxes going forward and at what rate? Thanks.

Thanks, Serge. I'll take the first question around PHID. So if you aggregate just the inhaled troposadol market today in real dollars, it's about $2 billion, and that seems to be split somewhat evenly between PH and PHID, at least for us. So clearly the PHID market is massively underpenetrated, I think, we're driving awareness. I think our competitors drive in awareness. So I think there's going to be a rising tide phenomenon for that. Our belief is that's well in excess of $2 to $3 billion on its own in PHILD. And then don't forget with the oral prostacyclins, if you assign $1 billion in today revenue value, the oral market there is $2 billion in value. So there's another $3 billion. So just across PH and PHILD, there's a potential increase you know, again, with clear line of sight without a lot of exaggeration or hyperbole to, you know, $6 billion in revenue. So a lot more runway here for us to continue to grow this franchise significantly. And certainly as we begin to develop L606, which we're actively recruiting, we've had patients in screening already, that, you know, that's the next gen molecule that can further open up access to these markets. So Again, very pleased with where we are today, but excited about where we're going to go tomorrow as well. And maybe, Mike, I'll turn it over to you, the tax question.

Yeah, thanks, Roger, and thanks for the question, Serge. You know, as you saw, we did record income tax expense in Q1. As Roger has said in the prepared remarks, we're growing profitability. We're growing at a quick pace. We would expect to continue to, you know, show income tax expense as we move forward as we As we've been saying since launch, and we'll continue to say, our goal is to obviously grow sales, but also grow profitability and reinvest some of that profitability into the business. So the expectation is that we will have increasing net income and adjusted EBIT as we move forward, and correspondingly, we'll have additional income tax expense.

Thank you. And our next question comes to the line of Julian Harrison from BTIG. Your question, please.

Hi, let me add my congratulations on all the recent progress and thank you for taking the questions. Two for me. First, are you seeing any emerging trends among patients switching to eutropia from other therapies? Has there been acceleration on that front at all? And what is the most common product you're seeing switching from at this point? And then second, thinking a little bit more about your $1 billion revenue by 2027 guidance that you announced earlier this year, is there a chance you could achieve that on a run rate basis before 2027? Any thoughts there? Thanks.

So in terms of trends and switching, maybe I'll ask Rajiv to talk about that from his observations when he's been out in the field talking to docs. And then also maybe, Rajiv, if you could speak to the studies that we're doing to direct patients from other prostate cyclones to Eutrapia as well. And then, Mike, if you'll not answer the question on the run, right, I'm going to take your best answer for Julian that you can when you get there. So, Rajiv?

Thanks, Roger. Thanks, Julian, for the question. So I think what is clear is that, and you asked this before, I think the community and the centers alike, I think we're experiencing an inhaled renaissance, and I think this is clearly being led by Eutrapia's product profile, I think that Roger continues to highlight in this call, and that's really that the tolerability of our print formulation has led to the ability to dose higher. And we showed in our SENT cohort, especially in PHLD, that as we go up every higher every eight weeks, that has resulted in notable changes in exercise capacity for these patients to to distances and changes that we've not seen in the past. And where this has gone is that practitioners, in our opinion, when we speak to them, has realized that, especially with this vast armamentarium that's now available in both Group 1 and now also in Group 3, that we're moving more towards making the patient not only clearly wanting to feel better, walk further, live longer, But we need to do that in a way that is extremely tolerable. The construct of using pumps and even oral prostacyclines, especially given their significant GI intolerability, has allowed the market to take a look at eutropia in a different perspective. In particular, what we're realizing is that the oral prostacyclin market has, in those practitioners, we've seen a large switchover to eutropia. And although the pharmacokinetics are different, I think, again, the fact that we can dose eutropia, you know, 1.5 to threefold what has traditionally been used with inhaled truproxenol has really opened their eyes to this fact. And the argument can be made, well, it's four times a day. And that's correct. But the advantage of inhaled is that it's directly being administered to the lungs. We can negate all the off, you know, significantly negate many of the off-target systemic side effects that are notable in with oral prostacyclines, regardless of the dosing frequency of that prostacyclin. And finally, with the use of cetatocept coming abroad, I think we're seeing a huge number of practitioners starting to say, why are we putting patients on parenteral therapy and a pump, which obviously had its advantages historically, but now we can wean that pump down, transition that also to eutropia, and I think we'll see some abstracts being presented at ATS highlighting the utility of eutropia in combinatory treatment with cetatricept. I think from a company's perspective, we realize this is where we need to continue to create the data and show physicians how to also do it from a trial perspective. We've now started recruiting into Ascent cohort B, which is patients that are inadequately responsive to either tibiasa nebulizer or tibiasa DPI and transitioning that to eutropia. We're also planning in the very near future to initiate transitioning from oral Celexapeg to open label eutropia. I think that one, of course, We initiated doing that because of, again, what is happening in the community. And finally, just to re-highlight, we need to provide, you know, how to actually transition from parenteral therapy on patients on cetariceps and how to transition off the pump directly to eutropia. And that study we hope to be initiating sometime in 2026, 2027. So, Hopefully that provides a detailed response to your question, Julian. And, Mike, if you'll talk about the run rate.

Yeah, so just to take a step back, and thanks for the question, Julian, you know, just looking back from Q3 to Q4 and Q4 to Q1, you know, we showed from a revenue share in inhaled processed cyclins, we've gone from Q3 of a 10% market share to Q4 at about a little over 16%. And in Q1 of 26, we've grown that to almost 23%. all while the market grew in Q4 and Q1 each by 5%. And this is in spite of the supposed terrible weather in the winter months here in Q4 and Q1. So I think what we've shown is nothing short of amazing in terms of that growth. We see continued growth as we move forward. As Roger talked about, the opportunities in both PAH and PHILD we think are massive. We have a tremendous amount of momentum. We have a best-in-class product. We have a best-in-class commercial organization and medical affairs organization. And we have nothing but confidence as we move forward here. You know, we're not going to talk about run rate as we get towards the back end of the year. You know, Rogers talked about at least a billion dollars in 2027. But we feel that we have a tremendous amount of momentum that we will continue to build on as we move through the rest of 2026.

Thank you. And our next question comes from the line of Ben Burnett from Wells Fargo. Your question, please.

Hey, good morning. I wanted to actually ask about L606 and sort of expectations for the phase three. Based off the phase two or the open label, I think patients were able to get up to kind of 229 micrograms. I guess that's the median. But what are your expectations for kind of the dose that's achievable in phase three?

Yeah, good morning, Ben. So thanks for the question. Again, over to Rajiv for that.

Yeah, Ben, thanks for the question. I think just to reacclimate to the audience, L606 is our true proximal epsilon inhalation suspension that is delivered twice a day. And I think one of the things Eutropia cannot solve is the four times a day, and L606 we are confident is going to be able to achieve a result that will be robust. We're obviously studying this in the setting of PHLD, and we anticipate the first patient to imminently come through in a short time period. In the open-label study, I think what we highlighted was really our construct that if you can deliver this twice a day, you can also sustain pharmacokinetics of tryprosinol, not only during the day, but an equivalent amount at nighttime. So that when you do a six-minute walk test, we anticipate that we will not see a notable difference between trough and peak. And I think that's very important because when the patient wakes up, they should feel as good as they did as the day before when they're walking around. In terms of dosing, I think what we have learned with eutropia is that we need to continue to provide customization to dosing to the patients. And to do that, we should be able to dose to maximum effect in those that can tolerate and clinically need it. And there'll also be patients that also need maybe less amounts based on their own clinical response. So I think the jury's still out. I think what is clear is that the way that we've created our dose levels do allow for significant dose titratability to levels that we also have been achieved with Utrepia-free sorter to use comparable dose level effects.

Great. Thank you, Rajiv. Thank you. And our next question comes from the line of Jason Gerberry from Bank of America. Your question, please.

Hi. This is Melanie on for Jason. Thanks for taking your question. Going back to the PHLD market opportunity, assuming no change to the market indication statement, can you talk about the challenges and opportunities with opening up that market opportunity? I know you talked about market penetration already, but how penetrated is that market currently with inhaled trapezoid melan? Is there a hurdle market? Is the hurdle market education improved diagnosis?

Thanks. Great. So, Scott, maybe you could take the answer on kind of what our expectations are in PHLD and where we are today.

Yeah, sure. Thanks. So, I think we've said that we started with PHLD being a smaller percentage of the patients as we, you know, that they are just a little bit of a slower burn in that market. But we're now to the point where it's pretty balanced in terms of 50-50. So, you can see already that PHLD has increased. I think, you know, with that said, the market is still 60,000 patients, and there is a lot of headroom here for this to continue to grow. I think, as Roger alluded to earlier, two companies in this space, educating, working on awareness, diagnosis, and treatment is going to rise the tides for sure. One of the reasons we're doing the Salesforce expansion here over the next couple of months is because we want to penetrate further out into the community market where these are physicians, community pulmonologists who prescribe, who see ILD patients, but they don't spend a lot of time thinking about, if any time, thinking about whether those patients have pH. You know, they'll give them antifibrotics and then they'll do the best that they can. But Having said that, I think that there's an opportunity to get out there to talk to these physicians because many of these patients are out there in the community and they haven't made it to a center yet. So you go to that doctor, you make them aware, you get them thinking about PHILD, you explain to them what a terrible disease this is and what the mortality looks like for it, and then ask them to look for it. And if they're either treated or diagnosis, I should say, diagnose it, and then either treat it or send it into a center. But I think that's where the opportunity lies is those patients that are out there are kind of in the jungle. And that's why, as I mentioned earlier, we're expanding the Salesforce. So we think there's a great deal of opportunity left there.

Yeah, another thing I would add, there's recent registry type data that's coming out that's showing that 50 to 75% of these patients actually have a pH component to their ILD So really, as Scott said, it's driving awareness and getting them to refer to a cath lab to do a definitive right heart cath so that they can then have the authorization to get scripted for a drug that can help them. So a lot of it is driving the disease awareness, driving the pH incidence within the ILD population. So there's sort of an expectation that it's actually there rather than not there. And then finally, either they're going to learn to treat or they're going to learn to refer and what the best referral network is for them. So that's what we're doing. And that's, as Scott said, one of the reasons we scaled the Salesforce significantly.

Thank you. And our next question comes from the line of Gaurav Mani from LifeSci Capital. Your question, please.

Yeah, good morning. Philip Eckert dropping in for Gaurav today. Thanks for taking the question. I guess any more color you can give on the potential expansion opportunity for Utopia in PHCOPD? Of course, this is a pretty wide open indication, but any color here on how the team is thinking about this will be helpful.

Yes, I'll start. So we think there's a clear opportunity here. And I think part of what will drive the value of sort of capturing that opportunity is doing a study that is enriched, if you will, for success. So we're at ATS, for example, we're going to have steering committee meetings with the luminaries in the space to talk about kind of if we're going to study this disease, what is the best sample of patients to study? And I think if we get that right, we all know that tryprosinol will improve the pH component of disease, and that obviously would benefit the outcome of patients with PH COPD. I think that's where we're going to focus our time and attention on is making sure we get the inclusion-exclusion criteria right. We then, you know, we'll do a protocol that's with all our experience that we think will be enriched for success, and then we'll take it to goal. So that's kind of where we are with that program. So it won't get going until 27 at best. So I think, you know, more to come on that, but appreciate the question. It's a massive opportunity, you know, in excess of $4 billion or more on its own.

Thank you. This does conclude the question and answer session of today's program. I'd like to hand the program back to Dr. Roger Jeffs for any further remarks.

Yeah, thank you, Operator, and thank you, everybody, for joining us. I think I'll just leave you with what we're really excited about, where the business is headed. I think we're going to focus on four key areas. One is the continued success and the launch of EUTREPIA and its growth, doing market support studies to cement our position for EUTREPIA as the anchor to anchoring press of cycling in the market, both for transitions from inhaled and oral, looking at synergies with Sirtatacept. We're also going to focus on L606 advancement and get that to goal as soon as we can. And then as we just answered a question around evolving broader indications, such as IPF, PPF, PHCOPD, and Raynaud's, so that we can expand this business by multiples and not percents. So again, thank you everyone for your time and attention today. We look forward to speaking to you at conferences in the coming future.

Thank you, ladies and gentlemen, for your participation in today's conference. This does conclude the program. You may now disconnect. Good day.