Solid Q4 Results From Liquidia
Details from Q4 release and call for Liquidia
Liquidia (disclosure: long - see full disclaimer) did pre-announce their Q4 topline numbers, so there was less incremental news with the Q4 release. Nonetheless, management hit the following points, all broadly positive and confirming of the thesis that the stock has momentum and appears undervalued:
Shared patient start data to end Feb 26 that suggested a similar rate of growth as seen in Q4 (see slide below). Said “exact same trajectory” [as Q4] in response to question.
Continue to expect over $1B in revenue in 2027 (vs. $148M of revenue in 2025 with a June launch). CFO said “on our path to be a billion dollar product in 2027”.
Were clear that they see share gains relative to United Therapeutics (this was evident in sales figures, but interesting to hear a previously less aggressive management team verbalize it). Specifically, they described 25% of patients as “transitioning from other prostacyclins” per slide above.
They also took some time on the call (via response to question) so explain why United Therapeutics recently mentioned Soft Mist Inhaler might not be a compelling product. Yes, it may be more portable, but without changes to particle size (as Yutrepia has via PRINT) you still may get significant cough and won’t reach lower airway. The Chief Medical Officer at Liquidia was of the opinion that SMI inhalers haven’t been shown to offer any improved clinical efficacy beyond portability.
Looking to launch trials for Yutrepia for systemic sclerosis (rare condition) later in the year.
No new news on the legal case, expect a decision soon (just as they did in December and January!), remain optimistic.
Summary Valuation and Conclusion
To check in on valuation, $1B sales in 2027, which is starting to look a little conservative suggests $600M of free cash flow as compared to a current market cap of $2.8B, so sub 5x 2027 free cash flow on management ‘guidance’.
Why is $1B in 2027 conservative? Well, if they can add an absolute
+7% points of share a quarter (as they appear to be doing) and the market grows +5% sequentially each quarter (as it seems to be doing), then they may hit $1B run-rate by Q1 2027, and even hit ~$860M of revenue for full-year 2026.
The main risk currently is an unfavorable legal ruling (maybe a 20% chance) and that the competitive landscape may change with upcoming product launches in 2027-8, but Liquidia’s L606 product appears well-positioned there.
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