Liquidia Technologies, Inc. (NASDAQ: LQDA), a late-stage clinical
biopharmaceutical company focused on the development and
commercialization of novel products using its proprietary
PRINT® technology, today reported financial results for the
third quarter ended September 30, 2020 and provided a corporate
update.
“Despite the ongoing COVID-19 pandemic, we
continue to make progress in defending our right to bring LIQ861
forward for patients, while also making significant strides to
advance our mission through an improved balance sheet, cash runway,
and intellectual property position with respect to dry powder
inhaled treprostinil. These are all important achievements as we
move closer to the potential approval and long-term
commercialization of LIQ861.” said Neal Fowler, Chief Executive
Officer of Liquidia. “Recent events, including the unsolicited
proposal to license LIQ861, have reinforced our resolve to bring
LIQ861 to the PAH community and renewed our belief that this
innovative treatment and the proposed RareGen merger will benefit
patients and bring value to our company and its stockholders.”
Corporate
Update:
- Raised $75 Million in Gross
Proceeds from Public Offering to
Strengthen Balance SheetClosed
underwritten public offering of 9,375,000 shares of common stock at
a public offering price of $8.00 on July 2, 2020, generating
net proceeds of approximately $70.3 million, which further augments
the Company’s balance sheet in advance of potential U.S. Food and
Drug Administration (FDA) approval of LIQ861.
- Completed Chief Financial
Officer Transition and Initiated
Optimization of Financial
OperationsCompleted a transition of Chief
Financial Officer responsibilities to Steven Bariahtaris as
interim Chief Financial Officer in August 2020. Following his
appointment, Mr. Bariahtaris and the finance team enhanced the
Company’s financial planning and budget controls and initiated a
process of implementing a more cost-efficient operating plan to
further improve the Company’s cashflow into 2022.
-
Bolstered LIQ861 Intellectual Property
Position Received a Notice of Allowance from
the U.S. Patent and Trademark Office (USPTO) for patent
application No. 16/099,135 (’135) in August 2020 related to LIQ861
covering methods of treating pulmonary hypertension (PH) with doses
between about 100 micrograms to about 300 micrograms of dry powder
treprostinil. The patent will substantially strengthen Liquidia’s
intellectual property position with respect to dry powder inhaled
treprostinil and represents an important milestone for LIQ861 on
its path to potential commercialization. Of note, greater than 70
percent of patients who have been enrolled in the INSPIRE and
extension studies titrated to LIQ861 doses of 100 micrograms or
more. For context, pharmacokinetic studies demonstrated that the
79.5 mcg dose of LIQ861 correlates with nine breaths of Tyvaso (54
mcg), the maximum recommended label dose of Tyvaso. The patent,
which is expected to be issued in the fourth quarter of 2020,
should have a term that expires no earlier than 2037.
-
Defended Right to Advance
LIQ861 as an
Innovation for PatientsContinued to vigorously
defend patent positions in order to bring the innovation of dry
powder treprostinil to patients.
Defended against assertion of infringement. In
July 2020, Liquidia filed its answer to the complaint filed by
United Therapeutics Corporation (UTC) in June 2020 against Liquidia
under the Hatch-Waxman Act in the U.S. District Court for the
District of Delaware (the “Delaware District Court”). The Company’s
answer included counterclaims of invalidity, non-infringement, and
Orange Book de-listing of two UTC patents related to the
manufacturing of treprostinil. As background, the complaint asserts
infringement of U.S. Patent(s) 9,593,066 (the “‘066 patent”) and
9,604,901 (the “‘901 patent”) allegedly relating to UTC’s Tyvaso®,
which triggered a statutory 30-month stay on the regulatory
approval of the LIQ861 new drug application (NDA) currently under
review by the FDA.
Also in July 2020, the Company responded to the
filing of an amended complaint by UTC asserting infringement of an
additional recently issued U.S. Patent No. 10,716,793
(the “‘793 patent”). The allegations of infringement of the ‘793
patent should have no effect on the FDA’s review of the LIQ861 NDA
and is not associated with the 30-month regulatory stay.
Importantly, Judge Andrews, presiding over the Hatch-Waxman
litigation, recently denied UTC’s motion to dismiss Liquidia’s
invalidity defenses and counterclaims concerning the ‘793
patent.
In July 2020, Judge Andrews set a claim
construction hearing in May 2021 and set the trial to begin in
March 2022. Liquidia remains confident that its arguments and
defenses to be made in Delaware District Court will result in a
favorable outcome and pave the way to bring LIQ861 forward for
patients in need. The 30-month stay expires on the earlier
of October 24, 2022 or resolution of the litigation in
Liquidia’s favor, whichever occurs first.
Petition for Inter Partes Review. At the end of
March 2020, Liquidia filed two petitions with the Patent Trial and
Appeal Board (PTAB), of the USPTO for inter partes review (IPR) of
the ‘901 patent and ‘066 patent seeking a determination that the
claims in both patents are invalid. In October 2020, the PTAB
instituted an IPR against the ’901 patent and concurrently denied
institution on the ‘066 patent. The Company expects a final
decision by the PTAB on the ‘901 patent by October 2021. A
favorable decision invalidating the ‘901 patent may be considered
by the court in concurrent patent litigation under the 30 month
stay.
- Advanced Efforts in Support of
the Proposed RareGen, LLC Merger
and IntegrationThe proposed acquisition of RareGen, LLC
(“RareGen”) reinforces Liquidia’s commitment to the PAH community
and Liquidia’s continued pursuit to address the unmet needs of
patients and the healthcare professionals who treat them. The
potential introduction of LIQ861 as a more convenient inhaled
treprostinil over the currently available inhaled option, combined
with RareGen’s parenteral treprostinil option, emphasize Liquidia’s
commitment to addressing the patient continuum of treatment. In
addition, these combined entities further enhance the
organization’s knowledge base, customer reach and commercial
planning in preparation for the potential launch of LIQ861, if
approved. The special meeting of Liquidia stockholders to consider
the RareGen merger and related matters is scheduled for November
13, 2020.
Third Quarter 2020
Financial Results
As of September 30, 2020, cash
totaled $79.6 million. On July 2, 2020, the Company
completed an underwritten public offering of 9.375 million shares
at a price of $8.00 per share, resulting in gross
proceeds of $75.0 million and net proceeds of
approximately $70.3 million. The company has begun to implement a
more cost-efficient operating plan and estimates that its cash will
be sufficient to fund its operating plan into 2022. In
addition, a successful close of the RareGen acquisition has the
potential to improve the Company’s cash runway going
forward.
- Research and Development
(R&D): R&D expenses were $7.7
million for the third quarter of 2020 compared with $10.9
million for the same period of 2019. The decrease of $3.3
million was primarily driven by a decrease in clinical trial
related expenses.
- General and Administrative
(G&A): G&A expenses were $7.2
million for the third quarter of 2020, compared with $2.4
million for the same period of 2019. The increase of $4.8
million was primarily due to an increase of $2.8
million expenses related to the RareGen acquisition and other
legal expenses, $1.1 million in compensation and consulting
expenses, and $0.9 million of reclassified spending from R&D to
G&A.
- Interest Income:
Interest income was $35,000 for the third quarter of 2020, compared
with $162,000 for the same period of 2019.
- Interest Expense:
Interest expense was $191,000 for the third quarter of 2020,
compared with $265,000 for the same period of 2019.
- Net Loss: Net loss
was $15.0 million for the third quarter of 2020, compared
with $13.4 million for the third quarter of 2019. The
increase of $1.5 million was primarily due to an increase
in G&A expenses, partially offset by a decrease in R&D
expenses.
Webcast and Conference CallThe
Company will host a webcast and conference call Monday, November 9,
2020 at 8:00 a.m. ET to discuss financial results and provide a
corporate update. The live call may be accessed by dialing
1-877-707-8711 (domestic) or 1-857-270-6219 (international) and
entering the conference code: 7617005. A live and archived webcast
of the call will also be available on the Events &
Presentations page of the Liquidia website.
About LiquidiaLiquidia is a late-stage
clinical biopharmaceutical company focused on the development and
commercialization of novel products using its proprietary PRINT®
technology to transform the lives of patients. PRINT is a particle
engineering platform that enables precise production of uniform
drug particles designed to improve the safety, efficacy and
performance of a wide range of therapies.
Currently, Liquidia is focused on the development of two
product candidates for which it holds worldwide commercial rights:
LIQ861 for the treatment of pulmonary arterial hypertension (PAH)
and LIQ865 for the treatment of local post-operative
pain. Liquidia is headquartered in Research Triangle
Park, NC. For more information, please
visit www.liquidia.com.
About
RareGenRareGen is a portfolio company of PBM
Capital Group, a healthcare investment firm. RareGen provides
strategy, investment, and commercialization for rare disease
pharmaceutical products. RareGen has a national sales force focused
on cardiology and pulmonology specialties.
Important Information About the
Transaction and Where to Find ItIn connection with the
proposed RareGen merger transaction, the Company and
Liquidia Corporation have filed documents with the SEC,
including the filing by Liquidia Corporation of a
registration statement on Form S-4, which was declared
effective on September 16, 2020, and a final proxy
statement/prospectus (including any supplements thereto),
and the Company mailed a proxy statement regarding the
proposed merger transaction to its stockholders that also
constitutes a prospectus of the Company. This document is not
a substitute for the proxy statement/prospectus or registration
statement or any other document which the Company or Liquidia
Corporation have filed with the SEC. Investors
and security holders of the Company and RareGen are urged
to read the registration statement, the proxy statement/prospectus
and any other relevant documents, as well as any amendments or
supplements to these documents, carefully and in their entirety
because they will contain important information. Investors
and security holders may obtain free copies of the registration
statement and the proxy statement/prospectus and other documents
filed with the SEC by the Company through the
website maintained by the SEC at www.sec.gov or
by contacting the investor relations department of the Company
at the following:
Liquidia Technologies, Inc.Jason AdairInvestor
Relations(919) 328-4350Jason.adair@liquidia.com
Participants in the
SolicitationThe Company, RareGen and certain of their
respective directors, executive officers and employees may be
deemed to be participants in the solicitation of proxies in respect
of the proposed transaction and related matters. Information
regarding the Company’s directors and executive officers, including
a description of their direct interests, by security holdings or
otherwise, is contained in the Company’s Form 10-K for the year
ended December 31, 2019 and its proxy statement
filed on April 28, 2020, which are filed with the SEC.
Additional information is available in the registration statement
on Form S-4 and the proxy statement/prospectus.
No Offer or SolicitationThis
communication is not intended to and shall not constitute an offer
to sell or the solicitation of an offer to sell or the solicitation
of an offer to buy any securities or a solicitation of any vote of
approval, nor shall there be any sale of securities in any
jurisdiction in which such offer, solicitation or sale would be
unlawful prior to registration or qualification under the
securities laws of any such jurisdiction. No offer of securities
shall be made except by means of a prospectus meeting the
requirements of Section 10 of the Securities Act of 1933, as
amended.
Cautionary Statements Regarding
Forward-Looking StatementsThis press release may include
forward-looking statements within the meaning of the Private
Securities Litigation Reform Act of 1995. All statements contained
in this press release other than statements of historical facts,
including statements regarding our future results of operations and
financial position, our strategic and financial initiatives, our
business strategy and plans and our objectives for future
operations, are forward-looking statements. Such forward-looking
statements, including statements regarding clinical trials,
clinical studies and other clinical work (including the funding
therefor, anticipated patient enrollment, safety data, study data,
trial outcomes, timing or associated costs), regulatory
applications and related timelines, including
potential FDA approval of the NDA for LIQ861, the
timeline or outcome related to our patent litigation pending in
the U.S. District Court for the District of Delaware or
its inter partes review with the PTAB, the issuance of
patents by the USPTO and our ability to execute on our strategic or
financial initiatives, involve significant risks and uncertainties
and actual results could differ materially from those expressed or
implied herein. The words “anticipate,” “believe,” “continue,”
“could,” “estimate,” “expect,” “intend,” “may,” “plan,”
“potential,” “predict,” “project,” “should,” “target,” “would,” and
similar expressions are intended to identify forward-looking
statements. We have based these forward-looking statements largely
on our current expectations and projections about future events and
financial trends that we believe may affect our financial
condition, results of operations, business strategy, short-term and
long-term business operations and objectives and financial needs.
These forward-looking statements are subject to a number of risks
discussed in our and Liquidia Corporation’s filings with
the SEC, including the risk that our proposed acquisition
of RareGen is not consummated or that the expected
benefits and synergies from the proposed acquisition are not
realized, the impact of the coronavirus (COVID-19) outbreak on our
company and our financial condition and results of operations, as
well as a number of uncertainties and assumptions. Moreover, we
operate in a very competitive and rapidly changing environment and
our industry has inherent risks. New risks emerge from time to
time. It is not possible for our management to predict all risks,
nor can we assess the impact of all factors on our business or the
extent to which any factor, or combination of factors, may cause
actual results to differ materially from those contained in any
forward-looking statements we may make. In light of these risks,
uncertainties and assumptions, the future events discussed in this
press release may not occur and actual results could differ
materially and adversely from those anticipated or implied in the
forward-looking statements. Nothing in this press release should be
regarded as a representation by any person that these goals will be
achieved, and we undertake no duty to update our goals or to update
or alter any forward-looking statements, whether as a result of new
information, future events or otherwise.
Contact
InformationMedia:Michael ParksCorporate
Communications484.356.7105michael.parks@liquidia.com
Investors:Jason AdairVice President, Corporate
Development and Strategy919.328.4400jason.adair@liquidia.com
-Financial Tables Follow-
Liquidia Technologies,
Inc.Balance Sheets |
September 30,
2020(Unaudited) |
|
December 31,2019 |
|
Assets |
|
|
|
|
|
|
Current assets: |
|
|
|
|
|
|
Cash |
$ |
79,551,041 |
|
$ |
55,796,378 |
|
Prepaid expenses and other current assets |
|
1,095,331 |
|
|
590,251 |
|
Total current assets |
|
80,646,372 |
|
|
56,386,629 |
|
Property, plant and equipment,
net |
|
7,388,376 |
|
|
9,253,965 |
|
Operating lease right-of-use
assets, net |
|
2,698,344 |
|
|
2,823,430 |
|
Other assets |
|
378,043 |
|
|
378,043 |
|
Total assets |
$ |
91,111,135 |
|
$ |
68,842,067 |
|
Liabilities and
stockholders’ equity |
|
|
|
|
|
|
Current liabilities: |
|
|
|
|
|
|
Accounts payable |
$ |
3,414,978 |
|
$ |
3,498,043 |
|
Accrued compensation |
|
2,068,480 |
|
|
3,164,687 |
|
Accrued stock offering expenses |
|
0 |
|
|
1,289,413 |
|
Other accrued expenses |
|
1,409,976 |
|
|
1,525,919 |
|
Current portion of operating lease liabilities |
|
638,862 |
|
|
566,390 |
|
Current portion of finance lease liabilities |
|
1,113,670 |
|
|
1,244,229 |
|
Current portion of long-term debt |
|
5,585,636 |
|
|
5,585,637 |
|
Total current liabilities |
|
14,231,602 |
|
|
16,874,318 |
|
Long-term operating lease
liabilities |
|
5,183,539 |
|
|
5,670,971 |
|
Long-term finance lease
liabilities |
|
310,513 |
|
|
1,056,747 |
|
Long-term debt |
|
6,104,374 |
|
|
10,292,484 |
|
Total liabilities |
|
25,830,028 |
|
|
33,894,520 |
|
Commitments and
contingencies |
|
|
|
|
|
|
Stockholders’ equity: |
|
|
|
|
|
|
Preferred stock — 10,000,000 shares authorized as of September 30,
2020 and December 31, 2019, 0 shares issued and outstanding as of
September 30, 2020 and December 31, 2019 |
|
— |
|
|
— |
|
Common stock — $0.001 par value, 60,000,000 shares authorized as of
September 30, 2020 and December 31, 2019, 37,752,261 and 28,231,267
shares issued and outstanding as of September 30, 2020 and December
31, 2019, respectively |
|
37,752 |
|
|
28,231 |
|
Additional paid-in capital |
|
324,159,065 |
|
|
250,158,766 |
|
Accumulated deficit |
|
(258,915,710 |
) |
|
(215,239,450 |
) |
Total stockholders’ equity |
|
65,281,107 |
|
|
34,947,547 |
|
Total liabilities and stockholders’ equity |
$ |
91,111,135 |
|
$ |
68,842,067 |
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
Nine Months Ended |
|
|
September 30, |
|
September 30, |
|
|
2020 |
|
2019 |
|
2020 |
|
2019 |
|
Revenue |
$ |
— |
|
$ |
— |
|
$ |
— |
|
$ |
8,072,120 |
|
Costs and expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
Cost of revenue |
|
— |
|
|
— |
|
|
— |
|
|
807,192 |
|
Research and development |
|
7,660,979 |
|
|
10,942,561 |
|
|
26,974,320 |
|
|
32,330,454 |
|
General and administrative |
|
7,151,788 |
|
|
2,377,687 |
|
|
16,201,249 |
|
|
7,807,920 |
|
Total costs and expenses |
|
14,812,767 |
|
|
13,320,248 |
|
|
43,175,569 |
|
|
40,945,566 |
|
Loss from operations |
|
(14,812,767 |
) |
|
(13,320,248 |
) |
|
(43,175,569 |
) |
|
(32,873,446 |
) |
Other income (expense): |
|
|
|
|
|
|
|
|
|
|
|
|
Interest income |
|
34,633 |
|
|
162,207 |
|
|
155,852 |
|
|
519,861 |
|
Interest expense |
|
(190,546 |
) |
|
(265,018 |
) |
|
(656,543 |
) |
|
(737,429 |
) |
Total other income (expense), net |
|
(155,913 |
) |
|
(102,811 |
) |
|
(500,691 |
) |
|
(217,568 |
) |
Net loss and comprehensive
loss |
$ |
(14,968,680 |
) |
$ |
(13,423,059 |
) |
$ |
(43,676,260 |
) |
$ |
(33,091,014 |
) |
Net loss attributable to
common stockholders, basic and diluted |
$ |
(0.40 |
) |
$ |
(0.72 |
) |
$ |
(1.38 |
) |
$ |
(1.85 |
) |
Weighted average common shares
outstanding, basic and diluted |
|
37,755,472 |
|
|
18,757,166 |
|
|
31,576,992 |
|
|
17,856,826 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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