LQDA - Liquidia weakness on judge denying stay overdone thesis unchanged - analysts

Luquidia Corp.'s ( NASDAQ: LQDA ) 29 % drop on a judge decision to d eny a stay request on the '793 patent pending appeal of the PTAB's decision appears to be well overdone, according to analysts.

"While a negative headline, we don’t view the stay denial as a material setback for Liquidia given that the ‘793 patent has already been invalidated in the IPR proceeding and that the H-W decision is expected later this year," BofA analyst Greg Harrison wrote in a note.

Recall LQDA surged 45% on July 19 after a court ruled in favor of the company in a patent dispute with United Therapeutics ( NASDAQ: UTHR ). The U.S. Patent Trial and Appeal Board ruled that 1–8 of the ’793 United Therapeutics patents have been shown to be unpatentable.

"We would further argue that even in the case of a negative decision on ‘793 the stock appears undervalued to us as IPR decisions are rarely overturned, which would still allow for a Yutrepia launch in 2024," Harrison, who has a buy rating and $14 price target on LQDA wrote in the note.

BTIG analyst Julian Harrison also wrote that the judge's stay decision didn't change the thesis on Liquidia ( LQDA ). BTIG's Harrison has a buy and $17 price target on the stock.

Recall in November, the FDA granted tentative approval to Liquidia's ( LQDA ) Yutrepia inhalation powder for the treatment of pulmonary arterial hypertension. The FDA can't give final approval of Yutrepia until the expiration of the regulatory stay on October 27.

With Liquidia ( LQDA ) shares trading below $6, Harrison sees "significant upside" in two of three possible scenarios.  In the most bullish scenario if LQDA wins on the `066 and `793 patents in the H-W case, a launch would likely happen late this year and Liquidia would have a NPV of $16.  If Liquidia wins on ‘066 and loses on ‘793, the launch would likely happen following An IPR appeal for ‘793 which would be ~2024 and lead to an $11 NPV. If LQDA lost on `066 and had to wait until 2028 to launch Yutrepia there would likely be downside valuation from current levels.

Recall Aug. 12 Liquidia ( LQDA ) jumped 28% after a judge issued an order suggesting that 793 patent should be considered invalid.

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