United Therapeutics Corporation (UTHR) shares jumped about 13% on Wednesday, September 30 (closing at $542), after a federal court ruled that rival Liquidia’s lung drug infringes its treprostinil patent.
Liquidia (LQDA) fell nearly 50% on the same ruling, wiping out about $3.2 billion of market value.
What the court decided
- The U.S. District Court for the District of Delaware found that Liquidia’s Yutrepia infringes claims 1 and 14 of United Therapeutics’ ‘327 patent, which covers inhaled treprostinil for pulmonary hypertension with interstitial lung disease (PH-ILD).
- The court rejected Liquidia’s bid to invalidate those two claims (the other asserted claims were found invalid).
- United Therapeutics plans to ask the court to direct the FDA to withdraw Yutrepia’s approval, which could pull the drug until its label drops PH-ILD.
- The company will also seek damages for past infringement, including a possible royalty on Yutrepia sales.
Why Tyvaso holders cheered
Yutrepia is the dry-powder challenger to Tyvaso, United Therapeutics’ blockbuster inhaled treatment. RBC Capital’s Lisa Walter said the ruling “significantly clouds the path” for Yutrepia to compete, and Leerink Partners called it a “‘win’, essentially” for United Therapeutics, according to Reuters. Liquidia plans to appeal.
The jump only gets United Therapeutics stock back to June
Wednesday’s $542 close is almost exactly the $541.83 close on June 30, and still below the $593 close on March 31. Before the ruling, the stock sat near $481, so the jump mostly erased the summer slide rather than setting a new high. The remedies (an FDA withdrawal order and royalties) are still requests, with a form of judgment due within about a week. The market is paying for the ruling, not yet for the remedy.
What the Street thinks
The Street’s mean price target for UTHR was $638 as of September 30, about 18% above the $542 close, with a median of $685 and a high of $725. The mean has eased from $665 at the end of June, and the low target dropped to $321 from $516 as a Sell rating appeared, against 8 Buys, 3 Outperforms, and 3 Holds.
Want to see the same target history for yourself? Pull up UTHR’s Street Analysts table on TIKR for free. Learn more here.
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