Liquidia agrees to pay $380.7 million to end its legal fight with United Therapeutics

Liquidia Corp. agreed to pay a net $380.7 million to settle every lawsuit between it and United Therapeutics Corp., a deal that keeps its inhaled drug Yutrepia on sale for pulmonary arterial hypertension but ends its bid to overturn a Sept. 30 patent loss. Liquidia shares rose about 42% in after-hours trading Tuesday.

What Liquidia agreed to pay

Liquidia Corp. said Tuesday it has reached a global settlement with United Therapeutics Corp. that resolves all six lawsuits between the two drugmakers, according to a company release issued at 5:44 p.m. ET. The total bill comes to a net $380.7 million, spread across 2026 and 2027.

Most of that goes to United Therapeutics. Liquidia will make a net payment of $175 million within 30 business days, a figure that already nets out money United Therapeutics is paying Liquidia to resolve antitrust litigation tied to Treprostinil Injection. It will then pay $145.4 million in two equal installments of $72.7 million, due on or before Jan. 31, 2027, and April 30, 2027.

The remaining $60.3 million goes elsewhere. Liquidia said it will pay that sum this month to the parties with interests in the Treprostinil Injection antitrust case, in full satisfaction of their claims; the release names Sandoz Inc., Henderson SPV, LLC and PBM RG Holdings, LLC. Liquidia also ended its promotional agreement tied to Treprostinil Injection and will stop commercially supporting that product. Put together, about $235.3 million is due this year and $145.4 million next year.

What Liquidia gave up

The settlement follows the Sept. 30 ruling by the U.S. District Court for the District of Delaware that claims 1 and 14 of United Therapeutics' '327 patent are valid and infringed by Liquidia. Those claims generally cover treating pulmonary hypertension associated with interstitial lung disease, or PH-ILD, with inhaled treprostinil, including dry-powder versions such as Yutrepia.

As part of the settlement, Liquidia agreed not to appeal that ruling. It has also filed a supplement asking the Food and Drug Administration to remove the PH-ILD indication from Yutrepia's label, and it no longer promotes the drug for that use. In exchange, Yutrepia stays on sale for pulmonary arterial hypertension, or PAH, without disruption, Liquidia said.

The deal includes mutual releases and is not an admission of liability by either side. After Liquidia's first payment, the companies will file to dismiss with prejudice the Delaware '327 case, a second infringement case in North Carolina federal court, Liquidia's own patent suit against United Therapeutics, two North Carolina state-court cases over alleged trade-secret misappropriation and breach of contract, and the Sandoz and RareGen antitrust case in New Jersey along with its appeals.

The peace has limits. In its forward-looking statements, Liquidia said the agreement does not extend to indications other than PAH or to new treprostinil-containing products, and that United Therapeutics may assert patents against its development programs or future products. That matters for L606, an extended-release treprostinil that Liquidia plans to take into pivotal studies for both PAH and PH-ILD.

Can Liquidia cover the bill

Liquidia paired the settlement with preliminary, unaudited third-quarter figures: Yutrepia net product sales of $222.7 million and cash and cash equivalents of $396.1 million as of Sept. 30. The $380.7 million in total payments is close to that cash balance, though $145.4 million of it is not due until 2027.

"We expect to fund the outlined payments from the ongoing sales of YUTREPIA and cash on hand," Chief Operating Officer and Chief Financial Officer Michael Kaseta said. He said Liquidia expects to rebuild its cash position and fund planned clinical studies without additional financing.

Liquidia did not say how much of Yutrepia's sales came from PH-ILD patients, and it listed the effect of ceasing PH-ILD promotion and sales on Yutrepia revenue among its forward-looking risks. The company said it will give a broader update on Yutrepia, its finances and its pipeline on its third-quarter earnings call in November.

How the shares traded

Liquidia shares closed Tuesday's regular session at $26.81, down 3.11%, then jumped after the announcement. By 7:59 p.m. ET they were at $38.20 in after-hours trading, up $11.39, or 42.48%, according to CNBC quote data, on after-hours volume of about 4.8 million shares, well above the roughly 2.8 million traded during the regular session. Investing.com reported a gain of around 40% shortly after the release. Even at the after-hours price, the stock sat far below its 52-week high of $93.61, set on Aug. 11.

United Therapeutics closed at $543.40, down 1.22%, and was little changed after hours at $545.10 as of 7:29 p.m. ET. Its investor-relations site had not posted a release about the settlement when this story was prepared, so the terms here come from Liquidia's announcement.