Liquidia Corporation Common Stock 2026 Q2 Earnings Call

Thank you, and good morning, everyone. It's my pleasure to welcome you to our second quarter 2026 financial results and corporate update call. Joining me today are Dr. Roger Jeffs, Chief Executive Officer, Michael Kaseta, Chief Operating Officer and Chief Financial Officer, Dr. Rajeev Saggar, Chief Medical Officer, Scott Moomaw, Chief Commercial Officer, and Rusty Schundler, 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 and clinical progress with you today. One year ago, we launched YUTREPIA and believed the medical community would find value in our differentiated approach to inhaled treprostinil. One year later, we have the answer. Physicians are prescribing it, patients are starting to switch to it, and referrals and starts continue to accrue at a robust and sustained pace. As you saw in our numbers this morning, as of July 31, we have received approximately 5,900 unique patient prescriptions, started more than 5,000 patients on therapy, and had more than 1,100 physicians write for the product. 30% of those physicians have prescribed to five or more patients. What's especially notable is where that growth is coming from.

The overall inhaled prostacyclin market grew again this quarter from $573 million in Q1 to $607 million in Q2, or approximately 6%. YUTREPIA's growth alone was larger than the growth of the entire category, even as we saw flat to declining use of oral and fused and competing inhaled formulations. That tells us something important. Not only are the numbers of new starts for inhaled treprostinil growing, YUTREPIA has taken an ever-growing share of the total market for inhaled treprostinil. On a net revenue basis, YUTREPIA is approaching 30% of the entire inhaled market, a tremendous result just over a year into launch, especially as the market is growing in concert with YUTREPIA's growth. This implies the majority of new patient starts are coming to YUTREPIA. What matters more than the numbers is the impact we're seeing in patient lives.

I spent my career in this field, and I've watched the delivery of prostacyclins move from complex IV and subcutaneous infusion to cumbersome nebulized therapy to intolerable oral formulations, and now to inhaled dry powder delivery. Across that history, one simplistic but guiding principle has remained constant. Better tolerability enables higher dosing. Higher dosing can drive a greater efficacy, and greater efficacy can support durable clinical benefit. The linchpin in this therapeutic chain is solving first and foremost for tolerability, as the ability to drive dose and improve symptoms while minimizing both off and on-target adverse events is the Holy Grail. That's the lesson I've learned from my 30-plus years in the field, and to me, explains why YUTREPIA has had such broad adoption and early commercial success to date as it offers all of these attributes.

This critical link between tolerability, dose, and efficacy was beautifully demonstrated in our 24-week ASCEND study in PAH-LD patients. Specifically, progressively higher median doses of YUTREPIA at weeks 8, 16, and 24 was accompanied by progressive improvements in 6-Minute Walk distance of 21.5, 31.5, and 41 meters respectively, without worsening cough scores. The only caveat is that YUTREPIA requires a four-times-daily dose regimen, which is why we are going from strength to strength and aggressively building on these same principles with twice-daily L606, which we believe has the potential to raise the tolerability bar even further. As we've previously shown in our 48-week open-label study, L606 patients titrated across a broad range while incurring a low burden of adverse events.

Most notably, the lowest incidence of cough we are aware of in any study of an inhaled treprostinil formulation, and we were able to observe enduring clinical benefit as peak 6-Minute Walk improvements were preserved at trough, or said another way, throughout the dosing interval. These results are especially impressive when you consider that patients enrolled reflected a prevalent population in the U.S. and were on combinatory background standard of care. We are not aware of any other product in clinical development that has matched the dose range, tolerability, and durability that we have already seen with L606.

We believe YUTREPIA and L606 have significantly raised the bar that every current and future product in this space will be measured against. It is with this confidence that we have stood up a thoughtful R&D plan to best elucidate the current and future uses of inhaled treprostinil across a wide array of indications. In fact, between YUTREPIA and L606, we now have 10 clinical studies either underway or planned to begin over the next 12 months. As Mike will explain, we can confidently make these investments because of the cash flow that this business now generates. With that, I will turn it over to Mike.

Thank you, Roger, and good morning, everyone. I am pleased to say the second quarter financial performance continued to reflect the growth trajectory for YUTREPIA we have described to date.

Quarterly sales of YUTREPIA have more than tripled over the last three quarters, and we have gone from reporting a net loss in Q2 2025 to four consecutive quarters of increasing profitability. Looking specifically at the second quarter of 2026, net product sales of YUTREPIA were $170.4 million, up over $40 million or 31% quarter-over-quarter. Net income increased to approximately $74.7 million, and non-GAAP adjusted EBITDA increased to approximately $96.3 million. Turning to cash, we entered the quarter with approximately $284.2 million in cash and cash equivalents, up $61.4 million from the first quarter and nearly $93.5 million since the start of the year, a clear sign how we are seeing the operating leverage inherent in our business flow through to the balance sheet. I would also like to note a few other financial metrics.

As we had previously forecasted to you, R&D and SG&A expenses both increased this quarter to support continued investment in our pipeline and the ongoing commercialization of YUTREPIA, which includes the expanded sales team that hit the field in June and additional patient support services. Going forward, I would note these two lines will behave differently. SG&A will increase as we scale commercially, with certain components moving in proportion to revenue. We also expect R&D to increase in the coming quarters as enrollment ramps up in RESPIRE and we initiate multiple studies to inform the current and future use of YUTREPIA. More specifically, we expect R&D expense in the second half of 2026 to be double the expense in the first half of the year and to increase again in 2027 as we build the best inhaled treprostinil products for future and current patients.

In closing, we expect to continue to grow revenue consistent with quarterly growth we've observed to date, increase our investment in our pipeline, and even with that investment, continue to grow profitability at the same time. We have a commercial product that generates significant cash flow and a clear set of priorities for where we will invest it. With that, Roger, back to you.

Thanks, Mike, for that summary. These results give us confidence that we're well on our way to more than $1 billion in net revenue in 2027, and just as importantly, confidence that we're building the right foundation for the next decade of this franchise. We look forward to updating you on our progress in the quarters ahead. With that, operator, please open the line for questions.