Sept 30 (Reuters) – Liquidia shares plunged nearly 50% on Wednesday after a federal judge ruled that its lung drug infringes key patent held by rival United Therapeutics, dealing a major blow to the treatment’s commercial outlook.
The US District Court for the District of Delaware found that Liquidia’s dry-powder drug, Yutrepia, infringed two foundational claims of United Therapeutics’ ‘327 patent.
The patent covers methods of treating pulmonary hypertension-associated interstitial lung disease, or PH-ILD, using inhaled treprostinil and certain dry-powder delivery features.
In a related order, the court denied Liquidia’s motion to throw out evidence regarding United Therapeutics’ patent ownership, ruling that Liquidia had received adequate notice before trial and failed to make timely objections.
“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 decision strengthens legal protections for United Therapeutics’ blockbuster inhalation treatment, Tyvaso. Its shares jumped 12.3% to $540.54 on the ruling.
Leerink Partners analysts said the court ruling gives United Therapeutics what looks like a “‘win’, essentially” by confirming that Yutrepia infringes a “valid UTHR patent.” While, RBC Capital Markets analyst Lisa Walter said it “significantly clouds the path” for Yutrepia to compete.
“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.
Liquidia, Jeffs said, plans to ask the US FDA to remove the PH-ILD indication from Yutrepia’s label.
Shares of Liquidia hit their lowest level in nearly four months, putting the company on track to lose about $3.18 billion from its market value, if losses hold.
A final judgment is expected in about a week, analysts said.
(Reporting by Christy Santhosh and Kamal Choudhury in Bengaluru; Editing by Shilpi Majumdar)
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