United Therapeutics and Liquidia stocks move sharply in opposite directions.

United Therapeutics shares are up 7% to $295.12, while Liquidia shares are down 9% to $17.07. The two companies have been engaged in a legal battle over the '327 patent, which United is trying to use to keep Liquidia's Tyvaso competitor, Yutrepia, off the market.

United Therapeutics (UTHR) shares are up 7% to $295.12, while Liquidia Corp (LQDA) shares are down 9% to $17.07. The market reaction comes amidst ongoing legal battles between the two companies over the '327 patent, which UTHR is attempting to use to block LQDA's Tyvaso competitor, Yutrepia, from the market.

Yutrepia, launched in June, has shown swift inroads into new patient prescriptions and Tyvaso’s existing patient base. A July survey of 18 Tyvaso prescribers, including top prescribers, found that Yutrepia has captured an estimated 5% market share in less than two months. Physicians reported that Yutrepia is more tolerable and allows for higher doses without discontinuation, making it a preferred choice for many [1].

The legal cloud over LQDA appears to be clearing, with the FDA approval of Yutrepia finally received in May. UTHR's patent challenges to Yutrepia are seen as insubstantial, with other next-generation therapies, including one from LQDA, also targeting Tyvaso's market share. If Yutrepia's rollout continues at its current pace, UTHR's Tyvaso sales are estimated to decline by 11% by 2026, potentially driving a 22% drop in EPS [1].

LQDA's CEO is a former co-CEO of UTHR, and the company's PRINT technology for manufacturing treprostinil means Yutrepia particles are roughly half the size of Tyvaso particles, improving tolerability. Clinical trials and physician feedback indicate that Yutrepia is better tolerated and more efficacious than Tyvaso, particularly for patients with pulmonary hypertension associated with interstitial lung disease (PH-ILD) [1].

While UTHR's legal efforts have been extensive, with numerous lawsuits and patent infringement cases against Liquidia, the company's monopoly status appears to be under threat. UTHR's pipeline is considered too meager to reignite sales growth in the face of stiff competition, and the company's revenue erosion will be most pronounced in the fast-growing PH-ILD indication [1].

Investors should closely monitor the ongoing legal battle and the market adoption of Yutrepia, as these factors will significantly impact the financial performance of both companies.

References:
[1] https://www.bleeckerstreetresearch.com/research/uthr-lqda