Liquidia Crashes 57% After Delaware Judge Rules Yutrepia Infringes United Therapeutics Patents

A federal judge's ruling that Liquidia's lung drug Yutrepia infringes two valid patent claims held by rival United Therapeutics gave the company the worst day in its history on Wednesday, putting roughly $3.2 billion of its market value at risk and threatening to restrict the drug's availability in the United States.

The ruling: two claims valid and infringed, the rest invalid

The Delaware federal court held that Yutrepia, Liquidia's dry-powder inhalation drug, infringes two foundational claims of United Therapeutics' '327 patent.

The '327 patent covers methods of treating PH-ILD, pulmonary hypertension associated with interstitial lung disease, with inhaled treprostinil and certain dry-powder delivery features.

In its own statement, Liquidia said the court ruled claims 1 and 14 of U.S. Patent No. 11,826,327 were valid and infringed, while the remaining claims asserted against it were found invalid. The two claims generally cover treatment of PH-ILD patients with inhaled treprostinil, including dry-powder formulations.

The court also denied Liquidia's motion to strike evidence about United Therapeutics' patent ownership, finding the company had adequate notice before trial and failed to object in time. "This is a key element of the case for Liquidia, and denial of the motion to strike has negative readthrough to the final decision on the case," said Raymond James analyst Ryan Deschner.

The market verdict: worst day ever against best session in a year

Liquidia shares plunged nearly 50% on Wednesday, Reuters reported midday, hitting their lowest level in nearly four months. By the close, the damage was worse: IBD reported the stock tumbled 57.2% to $30.26, its worst day ever. The plunge put the company on track to lose about $3.18 billion from its market value, if losses hold, according to Reuters.

United Therapeutics shares jumped 12.3% to $540.54 on the ruling, Reuters reported. By the close, IBD had the gain at 12.6% to $541.89. MannKind, which is partnered with United Therapeutics on Tyvaso, saw its shares pop 16.8% to $3.90. Stocktwits noted United Therapeutics was on track for its best session in a year.

Leerink Partners analysts said the ruling gives United Therapeutics what looks like a "'win,' essentially" by confirming that Yutrepia infringes a "valid UTHR patent." RBC Capital Markets analyst Lisa Walter said it "significantly clouds the path" for Yutrepia to compete.

Liquidia's response: appeal and a label retreat

"We respectfully disagree with the court's decision ... and are fully prepared to pursue all available appellate options," Liquidia CEO Roger Jeffs said in a statement. Jeffs said Liquidia plans to ask the FDA to remove the PH-ILD indication from Yutrepia's label.

In its statement, Liquidia warned that given the number of variables, including potential appeals and further proceedings, it is not possible at this time to reasonably estimate the range of potential outcomes or financial exposure. Potential remedies, the company said, could range from removing the PH-ILD indication from Yutrepia's label to a broader restriction on product availability. In post-trial briefs, United Therapeutics has asked the court for injunctive relief that would restrict Yutrepia's availability on the market.

Why the surprise mattered: the base case was a UTHR loss

The scale of the market reaction reflected how wrong the consensus had been. "We note that heading into this, the investor base case was that UTHR would likely lose the lawsuit, which had been long and drawn out," Leerink analyst Roanna Ruiz said in a note to clients. Ruiz noted Yutrepia has been gaining share on Tyvaso each quarter, and that any positive outcome for United Therapeutics and Tyvaso could drive more upside from here, a scenario not previously reflected in Street estimates.

What comes next: a judgment in a week, then the injunction fight

A final judgment is expected in about a week, with the parties directed to submit a proposed form of judgment specifying their requested remedies. United Therapeutics is seeking an injunction that could restrict Yutrepia sales; Liquidia is preparing its appeal and its FDA label supplement. Yutrepia, a dry-powder formulation of treprostinil delivered through a palm-sized device, was FDA-approved in 2025 for PAH and PH-ILD to improve exercise ability.