Key Takeaways
- Liquidia shares are down 14% after BofA cut its price target to $40 from $92, and BTIG and Raymond James both downgraded the stock.
- The drop follows Wednesday’s roughly 57% crash, after a Delaware court ruled that Yutrepia infringes two claims of a United Therapeutics patent.
- The court hasn’t set a remedy yet: it could remove PH-ILD from Yutrepia’s label or grant United’s requested injunction restricting the drug’s availability, and both sides’ proposals are due within a week.
- Even the reduced targets of $40 and $53 are well above the current share price of about [$26.60].
Liquidia (LQDA) is down about 14% as Wall Street reacts to Wednesday’s patent loss.
That comes after a 50%+ crash on Wednesday, which TIKR broke down here.
The analysts weigh in
Three firms moved this morning:
- BTIG downgraded Liquidia to Neutral from Buy, with no price target
- BofA cut its target to $40 from $92 and kept a Neutral rating, citing more uncertainty around Yutrepia’s commercial prospects
- Raymond James downgraded it to Outperform from Strong Buy and cut its target to $53 from $106
United Therapeutics (UTHR), the rival that brought the suit, got the opposite treatment. BTIG upgraded it to Buy with a $728 target, and Cantor Fitzgerald’s Olivia Brayer Saunders wrote that its path to $1,000 “just got easier.”
It’s all about the remedy
On Wednesday, a Delaware court ruled that Yutrepia, Liquidia’s inhaled treprostinil powder, infringes two claims of a United Therapeutics patent. Those claims cover treating pulmonary hypertension with interstitial lung disease with inhaled treprostinil. (PH-ILD is high blood pressure in the lungs that comes with lung scarring.) The court found the other four claims United asserted invalid.
Next, the court decides what to do about the infringement. Both sides have a week to propose a remedy. Liquidia says the outcome could range from removing PH-ILD from Yutrepia’s label to a broader restriction on the drug’s availability. United has asked for an injunction that would restrict it.
Those two outcomes are very far apart. Yutrepia is also approved for pulmonary arterial hypertension (PAH), so a label change alone would still let Liquidia sell it for that.
CEO Roger Jeffs said the company is “fully prepared to pursue all available appellate options,” and he plans to ask the FDA to remove PH-ILD from the label.
What’s next
Even after the cuts, BofA’s $40 target is quite a bit higher than where shares are today, and Raymond James’ $53 is roughly double the current price. The market is pricing Liquidia well below what even the newly cautious analysts think it’s worth.
Here’s Liquidia’s revenue, and where consensus has it going…
Of course, I’m expecting these numbers to get adjusted down some in the coming weeks as new analyst models flow through.
Ultimately I think this is about fear – there’s a lot of uncertainty right now, because we don’t know what the court will do, and also because Liquidia says it can’t yet estimate its financial exposure. Any appeal will keep the question open well after the court picks a remedy.
So what is Liquidia stock actually worth?
TIKR lets you forecast the future price of any stock in less than a minute. Just enter a few assumptions into TIKR’s valuation model and see what Liquidia could be worth. Start from Wall Street consensus estimates, or adjust the inputs to reflect your own view of the business. It’s free to use.
Disclaimer:
Please note that the articles on TIKR are not intended to serve as investment or financial advice from TIKR or our content team, nor are they recommendations to buy or sell any stocks. We create our content based on TIKR Terminal’s investment data and analysts’ estimates. Our analysis might not include recent company news or important updates. TIKR has no position in any of the stocks mentioned. Thank you for reading, and happy investing!
