Liquidia Corporation Q1 2023 Earnings Call

May 4, 2023

Pat.

Sometimes it's early as late this year or sometime in the first half of next year.

Second scenario.

Would be that in the hatch Waxman appeal, we prevail in both patents. So we prevail in both the <unk> six patent where the lower court decision is a firms and on the 703 patent where the lower court decision has reversed.

If that was to happen we would immediately be cleared to go seek final FDA approval.

So as I said before we anticipate that decision within the next one to three months.

Final scenario would be a scenario, where we ultimately do not prevail on either of the <unk> six patent or 703 patent.

And if that happens as we've guided previously we would have to wait for those patents to expire.

But again, one reiterate if all of the decisions of the lower courts are affirmed.

That would clears to come to market again, we think either late this year or first half of next year.

Thank you.

Got it thanks, that's helpful Great.

Great. Thanks. Thank you Richard Thanks for the question Greg Operator next question. Thank you for your question.

While we prepare for the next question.

And our next question will be coming from search Bang linger.

Your line is open.

Hi, good morning.

Just a couple of questions for me.

First one for Rusty.

I think you've been pretty consistent.

The most straightforward path to truly approval was affirming prior court decisions on appeal.

Just curious.

The oral arguments with yesterday, if your outlook has changed on the appeals of the D. C Court given that.

Most of the time was spent on the liquidity.

Yeah.

Sure. Thanks for the question so.

I think we want to be careful we don't.

We're not guiding as to what the judges are thinking or speculating as to what the what the decisions will be I think as you note.

Accounted approximately 40 questions from the court yesterday, only two of those related to the <unk> appeal.

Both sides had 15 minutes of oral arguments yesterday only a total of two minutes in 15 seconds with spend on on their own sex appeal. So.

I think certainly.

Actually we saw the same thing I think everyone else did and obviously those oral arguments are available on the <unk> website for anyone to listen to.

As I said, we don't want to speculate as to what the what the judges are thinking.

Okay.

And one for Roger.

I think in the past you've highlighted the differentiation of your trip to the other DPI product in terms of the dose ranges in the device.

I'm curious how much.

Pricing could be a differentiation here is that are important components of your.

Approach to competing in this market.

Yes, I appreciate the question Serge and good morning.

We're not going to comment on pricing I think obviously, we want to make them.

All communities, including the Payor community satisfied with our approach to the market.

And we will do what we feel is necessary to at least from a positioning standpoint.

Positioning <unk>.

<unk> product.

But let's wait till we get approval and then we'll comment on that when we go to market.

Thank you.

Thank you one moment, while we prepare for the next question.

The next question will be coming from Julian Harrison of <unk>. Your line is open.

Hi, Good morning, Thank you for taking my questions.

I guess first on the low versus high resistance debate just wondering if you could provide us your most recent read on patient prescriber preference.

And then regarding ongoing launch preparations are you able to talk about how much supply do you plan to manufacture at risk and has this changed at all with recent litigation updates.

Yeah, great great great questions, Julien Julian and good to hear from you. So maybe for the first question about the advantages of the low resistance device I'll ask Rajiv to answer that and then in terms of launch launch preparedness and supply and Mike If you could answer that Rajiv first on the low versus high.

Yes, Thank you Roger and Julian Good morning, Thank you for the opportunity to answer this question.

Listen we have repeatedly discussed.

Discuss the advantages of our innovative technology of print.

Once again just to highlight again.

Print allows for the drug particles did.

Did not require any deglomeration knee that you'd trip you can utilize the low resistance device and it doesn't have to be.

Barriers I remember because we use print technology the powder is already designed to work.

On its own with the particles are already sized deposit deepen alone.

Leading the low resistance devices, most suitable technology.

We believe that this enables a more ideal dry powder.

<unk> across a range of institute slow rates of range of lung disease types.

Including patients with ph and Audi. So this is why we are quite excited about about the market.

Thank you Rajeev.

Mike If you could comment on commercial stock and inventory build.

Absolutely.

Julien Roch with you.

Yeah.

Can you hear me, we can hear you now okay.

It's great to talk to you.

In terms of a question about inventory supply I think it is all it's about all overall launch preparation.

We are as you know last year when there is a possibility of launching.

At the end of 2022, we have gone through the launch preparations which included building commercial supply.

So we were ready to launch last year. We've continued those efforts where we're currently building commercial supply. So whenever we are getting clearance to launch we will be ready to supply the market and are very confident in that I also just wanted to add to that we're also going on doing other ongoing launch preparations and thats, including Onboarding a sales force there.

Starting that process building out our medical affairs team so.

We will be ready for launch and we know how important this launches on when we when we are giving ultimately given the green light, we will be ready to go and all that.

Okay, great. Thanks, very much thanks, Mike one thing I would add to Mike's comments.

I want to recognize our manufacturing team in RTP.

Manufacturer.

Bulk drug substance in house, so it's a highly scalable process that we're in control of our ability to scale and meet market demand is quite Brazil.

Operator next question please.

Thank you one moment, while we prepare for the next question.

And our next question will be coming from.

Ken.

Z of Jefferies. Your line is open.

Good morning, guys.

What's the status of the open label.

<unk> ph ILD study.

Kind of what size are you thinking for that.

And then the second question.

What does the restructuring of the GSK agreement.

Allow you to do.

Okay.

Great. Thanks for the question as companies.

If you would talk about the status of the open label ILD and Jason I'd Love, If you could answer the GSK question.

So it really can be thank you and good morning, Q2 as well.

Just to give a little bit of understanding. This is an open label study.

Focused on <unk>.

Evaluating the utility Tolerability and looking at exploratory endpoints such as efficacy in patients specifically with palmar hypertension associated with interstitial lung disease.

We have we have we believe that we are.

We'll launch this study.

Near the end of the year and so we look forward to that in the meantime, we're actively.

Talking with Kols sites, and getting ready for this launch, which which once again I think as.

Is it.

Kols are very excited to participate in the study and as I said, we should be launching by the end of this year. Thank.

Thank you Roger.

Thank you Rajiv and Jason if you talked about the reversion of the GSK rates to us.

Sure. So it's a good question <unk> I think if you look at the actions that the company has taken over the last several years.

To address any potential hurdles to creating more value for shareholders.

And one of those areas is the application of our print technology.

We've had a great relationship with GSK.

We started that in 2012.

And as our respective strategies started to evolve it became clear that we could help each other so what this new agreement allows GSK have continued access to do what we have been doing for them in the past, which is a lot of work on kind of preclinical assets as they think about moving them forward.

But now we are not restricted from using that same technology as we see fit meaning we can go forward on any development program that we would like including in partnership with other companies.

That's especially important when you look at a very clear competitive advantage that we've established which is applying <unk> technology to inhaled formulations and I can say over the last few years, we have had inbound interest to figure out how to use our technology in that area. So we're very happy to be in this new part of our licensing.

Chip with GSK, where both parties can move forward in creating as much value as possible.

Yes.

Very nicely said Jason.

Thank you so much guys.

Thank you operator, thanks, clay and one moment, while we prepare for the next question.

And our next question will be coming from Matt Kaplan of.

Ladenburg Your line is open.

Hi, Thanks for taking my questions. Good morning, guys.

Just wanted to go back to manufacturing for a minute.

One of the things that it seems like United might be running into capacity constraints can you talk about a little about a little bit about your capacity potential.

At launch and what your plans are to address the market given the size of the ph ILD opportunity.

Yes. Thanks for the question, Matt Good to hear from you Mike maybe if you could expand on your earlier answer to ramp capacity and how we how are we looking to build out.

Yes macro you can talk to you.

We are very excited critical part of this market we have a very.

Efficient.

Sure.

Process in house, where we do our in house manufacturing, we have great downstream partners that we've been working with for several years to develop this capacity.

We meet constantly to discuss needs and demand and potential for demand and with the larger ILB opportunity like I said, we are fully prepared we will be prepared to launch this product and be prepared to get this product in every patient pan.

That ones that are desires it.

We do not have any concern about our ability to do that so.

Through an efficient manufacturing process, great downstream partners.

We are fully confident that when we are able to launch as early as it may be or whenever the court decision come we are we will be ready and we.

We do not have that beer and look forward to be honest their patient.

In the short term and into the future.

And one key points I'll add we have the capability to source API and it well in advance, which we've done so we have API on hand.

Yeah.

Our supply chain is robust with most of the key operations are based in the U S.

The product has a long shelf life of three years at room temperature. So again, we can whenever we make now will have usefulness in the commercial supply once launched.

And as Mike said, we were prepared to launch last fall. So we had a we have a sort of a bolus of inventory readily available and then from a device standpoint I think this is also important.

Thank you Matt.

Thank you at this time I'm not showing any further questions in the queue and I would like to turn the call over to Roger for closing remarks.

Well. Thank you everyone for joining us. This morning, we look forward to continuing to discuss.

<unk> and its broad potential going forward.

And hopefully talk about advancements in the legal case, thank you and have a good day.

Thank you everyone for joining today's conference call. This concludes today's conference you may all disconnect everyone have a great day.

Okay.

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Before we begin please note that today's conference call will contain forward looking statements, including those statements regarding future results unaudited and forward looking financial information as well as the Companys future performance <unk> achievements.

Finally, I want to briefly address the comment that was made by United Therapeutics and its earnings call yesterday.

Correct and reliably and precisely delivers doses to patients that are comparable to all of the current passing the sizes and the types of DBS tools as well as doses above and beyond those that are in the DPI label.

Patients.

Also care about the comfort and usability of the treatment and we believe that our low resistance device its ease of use and robustness will be strongly favored by patients and their providers.

With that I would now like to turn.

Call over for questions. Operator first question. Please.

Thank you if you would like to ask a question. Please press star one on your telephone one moment, while we compile the Q&A roster.

As well we ask that you. Please wait for your name to be announced before you proceed with your question.

The first question comes from Greg Harrison with Bank of America. Your line is open.

Hey, good morning, and thanks for taking the question.

If you could give any additional color just on the different scenarios with respect to.

To the appeals.

On the litigation and and how that would impact the timing.

The <unk> launch I know you said it could be later this year or first half of next year. So.

What should we be looking for.

As these proceedings continue to.

To get our best judgment of when that could happen.

Alright. Thank you for the question Greg rest, if you wouldn't mind answering it.

Sure sure. Thanks, Greg.

<unk>.

As I noted in my in my remarks, there are two ongoing appeals proceedings, either one of which if they were decided in our favor.

Would allow us to proceed to launch so first as we've said on prior calls.

We ultimately need to be successful through appeal in one proceeding or the other on both of the patents that are still an issue. So ultimately we need to prevail in both <unk> six and the hatch Waxman appeal and the 793 patent in either the hatch Waxman appeal or the <unk> appeal.

And so with that the scenarios there are really three.

Reed potential scenarios.

Yes, three potential scenarios.

The first would be that everything at the lower courts or lower tribunal sorts of firms that would mean that did hatch waxman, the asics decision in our favor as affirms.

783 decision against us as the firms and the <unk> decision on 79 three in our favor is the firms.

If all the decisions of our firms than we would be clear to seek final FDA approval.

Based on the current timeline, what that would mean is we'd be waiting for the $700 repeat have appeal, which as we've guided previously we think we will get to a resolution of that sometimes.

Sometimes it's early as late this year or sometime in the first half of next year.

Second scenario.

Be that in the hatch Waxman appeal, we prevail on both patents. So we prevail in both the <unk> six patent where the lower court decision is a firms and on the 703 patent where the lower court decision has reversed.

If that was to happen we would immediately be cleared to go seek final FDA approval.

So as I said before we anticipate that decision within the next one to three months.

Final scenario would be a scenario, where we ultimately do not prevail on either the <unk> six patent or 703 patent.

And if that happens as we've guided previously we would have to wait for those patents to expire.

But again I want to reiterate if all of the decisions of lower courts are affirmed.

That would clears to come to market again, we think either late this year or first half of next year.

Thank you.

Got it thanks, that's helpful Great.

Great. Thanks. Thank you Richard Thanks for the question Greg Operator next question. Thank you for your question.

While we prepare for the next question.

And our next question will be coming from search.

<unk>.

Adam Your line is open.

Hi, good morning.

Just a couple of questions for me.

First one for Rusty.

I think you've been pretty consistent.

The most straightforward path to trickier approval was affirming prior court decisions on appeal.

Just curious.

The oral arguments from yesterday, if your outlook has changed on the appeals of the D. C Court given that.

Most of the time was spent on the liquidity.

Sure. Thanks for the question so.

I think we want to be careful we don't.

We're not guiding as to what the judges are thinking or speculating as to what the what the decisions will be I think as you note.

Accounted approximately 40 questions from the court yesterday only.

Two of those relates to the <unk> appeal.

Both sides had 15 minutes of oral arguments yesterday only a total of two minutes in 15 seconds with spend on <unk> appeal. So.

I think certainly.

Factually, we saw the same thing I think everyone else did and obviously, there's oral arguments are available on the <unk> website for anyone to listen to.

But as I said, we don't want to speculate as to what the what the judges are thinking.

Okay and one for Roger.

I think in the past you've highlighted the differentiation of your trip to the other DPI product in terms of the dose ranges in the device.

Sure how much pricing could be differentiation here is that are important components of your.

Approach to competing in this market.

Yes, I appreciate the question Serge and good morning.

We're not going to comment on pricing I think obviously, we want to make.

All communities, including the Payor community satisfied with our approach to the market.

And we will do what we feel is necessary at least from a positioning standpoint.

Positioning <unk>.

Third product.

But once we get approval and then we'll comment on that is when we go to market.

Thank you.

Thank you one moment, while we prepare for the next question.

The next question will be coming from Julian Harrison of <unk>. Your line is open.

Hi, Good morning, Thank you for taking my questions.

I guess first on the low versus high resistance debate just wondering if you could provide.

The most recent read on patient prescriber preference.

And then regarding ongoing launch preparations are you able to talk about how much supply you plan to manufacture at risk and has this changed at all with recent litigation update.

Great Great great questions, Julien Julian and good to hear from you. So maybe for the first question about the advantages of low resistance device I'll ask Rajiv to answer that and then in terms of launches launch preparedness and supply Mike If you could answer that Rajiv first on the low versus high.

Yes, Thank you Roger and Julian Good morning, Thanks for the opportunity to answer this question.

Listen we have repeatedly discussed.

Discuss the advantages of our innovative technology of print.

And once again just to highlight again.

Print allows for the drug particles did.

Not with any deglomeration knee that you can utilize the low resistance device.

No barriers I remember because we use print technology the powder is already designed to work.

On its own with the particles are already sized deposit deepen the lung.

Leaving the low resistance devices, most suitable technology.

We believe that this enables a more ideal dry powder.

<unk> across a range of institutes slow rates of range of lung disease types.

Including patients with ph analogy. So this is why we are quite excited about about the market.

Thank you Rajeev.

Might be if you could comment on commercial stock and inventory build.

Sure.

Julien Roch with you.

Mike can you learned we can hear you now okay.

Great to talk to you.

In terms of the question about inventory supply I think it's all it's about all overall launch preparation.

We are as you know last year when there is a possibility of launching.

At the end of 2022, we had gone through launch preparations, which included building commercial supply.

We're also going on doing other ongoing launch preparations and thats, including Onboarding of Salesforce, we're starting that process building out our medical affairs team. So.

We will be ready for launch and we know how important this launches when we are when we are giving ultimately given the green light we will be ready to go in all aspects.

Okay, great. Thanks, very much thanks, Mike one thing I would add to mikes comment it.

I want to recognize our manufacturing team in RTP.

Manufacturer.

Bulk drug substance in house, so it's a highly scalable process that we're in control of our ability to scale in the market demand is quite Brasil.

Operator next question please.

Thank you while we prepare for the next question.

And our next question will be coming from.

Ken.

Z of Jefferies. Your line is open.

Good morning, guys.

What's the status of the open label Ph ILD study.

Kind of what size are you thinking for that.

And then the second question.

What does the restructuring of the GSK agreement.

Allow you to do.

Okay.

Great. Thanks for the questions don't lease.

Rajiv if you would talk about the status of the open label ILD and Jason I'd Love, If you could answer the GSK question.

Okay.

Can be thank you and good morning, Q2 as well.

Just to just to give a little bit of understanding. This is an open label study.

Focused on.

Evaluating the utility Tolerability.

And looking at exploratory endpoints, such as efficacy in patients specifically with palmar hypertension associated with interstitial lung disease.

We have we have we believe that we will launch this study.

At the end of the year and so we look forward to that in the meantime, we're actively.

Talking with Kols sites, and getting ready for this launch, which which once again I think as.

Is it.

Yes.

Okay, well I'm very excited to participate in the study and as I said, we should be launching by the end of this year. Thank.

Thank you Roger.

Thank you Rajiv and Jason if you're talking about the reversion of the GSK rates to us.

Sure. So it's a good question <unk> I think if you look at the actions that the company has taken over the last several years.

<unk> been to address any potential hurdle to creating more value for shareholders.

And one of those areas is the application of our print technology.

We've had a great relationship with GSK.

We started that in 2012.

Now we are not restricted from using that same technology as we see fit meaning we can go forward on any development program that we would like including in partnership with other companies.

That's especially important when you look at our very clear competitive advantage that we've established which is applying <unk> technology to inhaled formulations and I can tell you over the last few years, we have had inbound interest to figure out how to use our technology in that area. So we're very happy to be in this new part of our licensing.

Chip with GSK, where both parties can move forward in creating as much value as possible.

Very nicely said Jason.

Thank you so much guys.

Thank you Companys operator, thanks, Clay and one moment, while we prepare for the next question.

And our next question will be coming from Matt Kaplan.

Ladenburg Your line is open.

Hi, Thanks for taking my questions. Good morning, guys.

Just wanted to go back to manufacturing for a minute.

One of the things that it seems like United might be running into capacity constraints can you talk about a little about a little bit about your capacity potential.

At launch and what your plans are to address the market given the size of the ph ILD opportunity.

Yes. Thanks for the question, Matt that's going to hear from you Mike maybe if you could expand on your earlier answer to ramp capacity.

We're looking to build out.

Yes, Matt Great to talk to you.

We are very excited with regard to this market we have a very.

Efficient.

Process in house, where we do our in house manufacturing, we have great downstream partners that we've been working with for several years to develop this capacity.

That ones that are desires it.

We do not have any concern about our ability to do that so.

Through an efficient manufacturing process, great downstream partners.

We are fully confident that when we are able to launch as early as it may be or whatever the court decision comes we are we will be ready and do we.

We do not have that beer and look forward to being on the third patient.

In the short term and into the future.

One two points I'll add we have the capability to source API and it well in advance, which we've done so we have API on hand.

Our supply chain is robust with most of the key operations are based in the U S.

The product has a long shelf life.

Three years at room temperature. So again, we can whenever we think now we will have the usefulness in the commercial supply once launched.

And as Mike said, we will prepare to launch last fall and so we had a we have a sort of a bolus of inventory.

We are available and then from a device standpoint I think this is also important.

Plus the IP device that we use through a resistance devices produced in the millions of units for global demand of which we only order traction, but that will not ever be a gating or limiting factor.

We feel very comfortable that we've scaled already and we can scale further with east. So I think we are.

Positioning in a very we're in a position of strength.

That's very helpful. And then just one second question I guess following the completion of the <unk> or the <unk> process, assuming you're successful.

What would be the timing for full approval and then launch after that.

Yes, it's a little bit of a moving target net but our estimate is it will be anywhere from two weeks to two months.

And we're certainly going to communicate with the FDA about the process.

We will ask for a quick return on.

Turning the tentative approval into a full approval.

And things that we may need to do to get that done including safety updates if required.

Again.

Fairly simple process historically, when we look at precedents, it's anywhere from two weeks to two months it can be even quicker than that but I think thats a good way to look at it.

Okay.

Thanks for taking the questions yes.

Thank you Matt.

Thank you at this time im not showing any further questions in the queue and I would like to turn the call over to Roger for closing remarks.

Well. Thank you everyone for joining us. This morning, we look forward to continuing to discuss.

<unk> and its broad potential going forward.

And hopefully talk about advancements.

Thank you and have a good day.

Thank you everyone for joining today's conference call. This concludes today's conference you may all disconnect everyone have a great day.

Liquidia Corporation Q1 2023 Earnings Call

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