Liquidia Technologies, Inc. Aktie

Hello, and welcome to the Annual Meeting of Stockholders of Liquidia Corporation. Please note that today's meeting is being recorded. [Operator Instructions] It is now my pleasure to turn today's meeting over to Roger Jeffs, Chief Executive Officer of Liquidia Corporation. Dr. Jeffs, the floor is yours.

Good afternoon, and welcome to Liquidia Corporation's 2026 Annual Meeting. I'm Roger Jeffs, Chief Executive Officer of the company. Will the meeting please come to order? Let me take this opportunity to welcome all those virtually present at the Annual Meeting of Stockholders of Liquidia Corporation. This year's annual meeting is being held in a virtual-only meeting format.

This allows stockholders, regardless of physical location, to participate in today's meeting. Not only can you listen to the meeting, but you can also submit questions and vote your shares online prior to the closing of the polls in accordance with the instructions you received prior to the meeting. The polls are now open. We will get started with the technical phase of the meeting in a few moments.

But first, we would like to direct your attention to the agenda and rules of conduct and procedures, a copy of which has been posted to the online meeting portal. Among other items, the rules of conduct and procedures describe the procedures for voting at the meeting. If you've already voted by proxy, you do not need to vote at this meeting.

However, if you wish to change your vote or if you are a registered stockholder and have not voted, you vote now by clicking the Vote icon located at the top right of your screen and making your selections. The rules of conduct and procedures also describe the procedures for asking questions at the meeting. We will only respond to questions related to the official business of the meeting.

If you wish to ask a question, please click the Q&A icon located at the top right of your screen, type your question in the space provided and click send. You may ask a question at any point. Approximately 15 minutes has been set aside at the end of the formal portion of the meeting to respond to questions.

Before proceeding to the business of this meeting, there are also certain technical legal matters which we must dispose of in order to make certain that we are conducting a duly authorized meeting. But as soon as these are completed, I would like to introduce you to the executive officers and directors of the company who are also joining us virtually and also to describe to you the matters proposed for your consideration and action at this meeting.

The company has designated Sue Nelson from Computershare to serve as the Inspector of Election. A copy of Ms. Nelson's oath as inspector of election was presented to me prior to the meeting, and therefore, her appointment as inspector of election is valid. If there are no objections, I will direct that such oath be filed with the minutes of the meeting. Will the inspector of election kindly confirm that a majority of the total number of shares of common stock of the company outstanding and entitled to vote at the meeting are present at the meeting.

There are represented at the meeting, either virtually or by proxy, 67,479,187 shares of common stock $0.001 par value per share out of a total number of 88,893,621 shares of common stock issued and are outstanding and entitled to vote at the meeting. Each share of common stock is entitled to 1 vote. Accordingly, there are an aggregate of 88,893,621 votes entitled to be cast at this meeting, of which an aggregate of 67,479,187 are present virtually or represented by proxy.

Thank you, Sue. The report of the Inspector of Election indicates that these are -- that there are present at the meeting virtually or represented by proxy the holders of a majority of the total number of shares of the stock of the company outstanding and entitled to vote at the meeting. There is, therefore, a quorum present and the meeting is competent to transact business.

Would the Secretary of the meeting please report on the mailing of the proxy materials and the availability of a list of stockholders?

Roger, as Secretary of the meeting, a copy of the notice of the Annual Meeting of Stockholders dated April 24, 2026, concerning the matters to be considered and acted upon at the meeting and a copy of the proxy statement and the company's annual report on Form 10-K for the year ended December 31, 2025, are available for viewing on the company's hosting site, which is linked to the virtual meeting portal.

Accordingly, we have received -- additionally, we have received an affidavit of mailing executed by an employee of Computershare Communication Services, an affiliate of Computershare, the company's transfer agent, certifying that the mailing of the aforementioned proxy materials to the company's stockholders was initiated on May 06, 2026. The affidavit of mailing will be filed with the minutes of this meeting.

Thank you, Rusty. Now that the technical organizational phase of the meeting has been completed and before proceeding to the business to be transacted at this meeting, I would like to take this opportunity to introduce you to the current directors of the company other than myself, several of whom are with us today: Dr. Stephen Bloch, Dr. Joanna Horobin, Arthur Kirsch, Damian deGoa and Katie Rielly-Gauvin. David Johnson, Raman Singh and Paul Manning were not able to attend today.

I would also like to take this opportunity to introduce you to the following officers of the company other than those officers who are also current directors of the company or nominees for directors of the company who are present today. Mike Kaseta, Chief Financial Officer and Chief Operating Officer; Scott Moomaw, Chief Commercial Officer; Jason Adair, Chief Business Officer; Dana Boyle, Chief Accounting Officer; Sarah Krepp, Chief Human Resources Officer; and Rusty Schundler, General Counsel and Corporate Secretary.

Finally, I would like to introduce Toni Lockett of PricewaterhouseCoopers, the company's independent registered public accounting firm. The Chair now deems the following matters to be properly before this meeting.

Firstly, the nominees for Class II directors to serve until the 2029 Annual Meeting of Stockholders and until their respective successors have been duly elected and qualified or until such directors' earlier resignation, removal or death are Katie Rielly-Gauvin, Raman Singh and David Johnson.

Secondly, the proposal to ratify the appointment of PricewaterhouseCoopers as the company's independent registered public accounting firm for the fiscal year ending December 31, 2026.

And thirdly, the proposal to approve on an advisory basis, the compensation of our named executive officers.

We will be closing the polls shortly. You must ensure you submit your election ballot in order for your votes to be counted. The Inspector of Election will not accept votes submitted after the closing of the polls. If you have already voted by proxy, you do not need to vote at this meeting. However, if you wish to change your vote or if you are a registered stockholder and have not voted, you may now vote by clicking the Vote icon located at the top right of your screen and making your selections.

Please note that any votes submitted via electronic ballot will be subject to final verification by the Inspector of Election. With the polls having been held open for 5 minutes, and I hereby declare that the polls are now closed for voting on the items of business.

Will the Inspector of Election please give her report concerning the votes upon the election of directors and the aforesaid proposals?

Ladies and gentlemen, the report of the Inspector of Election indicates that the following numbers of votes cast by the holders of common stock have been voted with respect to proposal 1, the election of each of the Class II director nominees for the Board of Directors of the company: David Johnson; for, 44,874,399; withheld, 58,179; broker nonvotes, 22,546,609.

Katie Rielly-Gauvin. For, 41,448,383; withheld, 3,484,195; broker nonvotes, 22,546,609; Raman Singh, for, 41,158,353; withheld, 3,774,225; broker nonvotes, 22,546,609.

Proposal 2, the ratification of the appointment of PricewaterhouseCoopers LLP as the company's independent registered public accounting firm for the fiscal -- for the year ending December 31, 2026. 67,279,878; withheld, 183,739; broker nonvotes, 15,570.

Proposal 3, the approval on an advisory basis of the compensation of our named executive officers. For 44,270,299; withheld, 612,749; abstained, 49,530; broker nonvotes, 22,546,609.

Thank you, Sue. The report of the Inspector of Election, therefore, indicates that Katie Rielly-Gauvin, Raman Singh, David Johnson have been duly elected as Class II directors of the company to serve for a term expiring at the 2029 Annual Meeting of Stockholders and until their respective successors have been duly elected and qualified or until such directors' earlier resignation, removal or death.

Secondly, the proposal to ratify the appointment of PricewaterhouseCoopers as the company's independent registered public accounting firm for the fiscal year ending December 31, 2026, has been approved.

And thirdly, the proposal to approve on an advisory basis, the compensation of our named executive officers has been approved.

Will the Inspector of Election please execute her certificate as to the total number of votes cast on each of the matters considered at this meeting? And if there are no objections, I will direct that the certificate be filed with the minutes of the meeting.

The floor is now open for any questions or comments relating to the business of the company. Please note that Toni Lockett, a representative of PricewaterhouseCoopers, the company's registered public accounting firm, is present at the meeting and is available to respond to questions raised by stockholders. If you wish to ask a question, please click on the message icon on your screen.

It is possible that today's meeting, including some of our comments and some of our responses to your questions, may include forward-looking statements that are based on certain assumptions and are subject to a number of risks and uncertainties. The risks and uncertainties and assumptions that could affect these forward-looking statements include risks that are included in the company's SEC reports, including our Form 10-Q for the first fiscal quarter of 2026.

We qualify all of our forward-looking statements by these cautionary statements. And except as required by law, we assume no responsibility for updating any forward-looking statements. In addition, with respect to all of our forward-looking statements, we claim the protection of the safe harbor for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995.

Roger, there are no questions at this time.

Thank you, Jason. Thank you all for attending. This concludes the meeting. You may now disconnect.

My name is Jason Gerberry. I cover pharma and biotech at BofA. I'm pleased to be introducing Liquidia. And joining us is Mike Kaseta, CFO and COO; and Jason Adair, Chief Business Officer.

So gentlemen, thanks for joining us. Liquidia is -- has one of the more interesting commercial launches in biopharma since, I believe, June of last year. And so we'll talk about that, your drug YUTREPIA for pulmonary arterial hypertension and PH-ILD. We'll talk a little bit about pipeline as well. So maybe we'll just start off and talk a little bit about YUTREPIA now, which 3 full quarters under your belt, where you're at, what's exceeding expectation? And if you can talk a little bit about the opportunity on the come.

Yes. Thanks, Jason, and thanks for having us and hosting us here today. Liquidia is a great place to be right now. And as you said, we launched our product back in June of 2025, and we've really just knocked the launch out of the park. We -- in Q1, we recorded $130 million of revenue. And execution is not just on the commercial front. It's the discipline that we show financially. We recorded $70 million of adjusted EBITDA. We've added $30 million of cash to our balance sheet in the quarter. So we are really executing on everything that we set out at the launch.

We couldn't be happier with the launch. YUTREPIA, as we -- as Roger, our CEO, has talked about, our goal is to be the prostacyclin of first choice, and I think we're well on our way there. If you just look at our market share from a revenue point of view, in our first quarter of launch, we had about a 10% market share. Second quarter, we went up to about 16%. And in this most recent first quarter of 2026, we're at over 23% market share. So we are growing quickly. We're excited for where we're going and really excited for 2026 and beyond. And one of the things that we've talked about is we believe we're going to be a $1 billion product in 2027, and we're on that trajectory to get there.

Great. So you launched YUTREPIA into these 2 indications as a 505(b)(2) reference brand, the reference brand being United Therapeutics Tyvaso. Can you talk a little bit about the attributes of YUTREPIA that are resonating most with healthcare providers? And what's driving this strong adoption dynamic?

Yes. I mean I think what we've always thought and hypothesized prior to launch is that we have a superior product profile. And I think what we're seeing in the field is exactly that playing out. And what we like to do is we talk about the 3 Ds. And the first D is being able to achieve deep lung deposition. And for those who don't know, we have a proprietary technology, formulation technology called PRINT. It allows us to manufacture particles of uniform size and shape. That size was specifically designed to bypass the back of the throat and the upper airways and achieve that deep lung deposition.

By also having these monodispersed particles, we're able to use an easy-to-use low-resistance device that's been used for years and years all over the world, which is low resistance, easier to inhale, especially with patients who have lung dysfunction. And the last piece of this that it's all tied together allows us to get to higher doses. So we're able to dose YUTREPIA at 2x, 3x of what the normal dose of Tyvaso is. And one thing that is noncontroversial is more prostacyclin is always better. And our ability to titrate to those higher doses is really what's resonating with doctors, with patients and ultimately has contributed greatly to our early successes of the launch.

Got it. And are those points of value proposition sort of equally shared in PH-ILD? Because I know with like PH-ILD, right, like parenterals never got traction in ILD. So I don't know, does the added dose response matter as much in PH-ILD versus PAH?

Yes, you want to take that?

Sure. I think the answer is yes, right? So we've known for a while in the class of prostacyclin analogs that exposure can drive improved activity. And so we're treating the pulmonary hypertension in that ILD patient. And what's more interesting is we actually did a prospective study that we call the ASCENT study. And this was a Phase IV study where we were looking to see does the dose titration in PH-ILD patients look different than what we had studied in INSPIRE in PAH. But with the safety data that we had generated in INSPIRE, we said, let's see if we can have a more directed dose titration in PH-ILD.

So the ASCENT study looked to not just go to higher doses than what the previous thought therapeutic target, but do it faster. And we did so in a way where we didn't exacerbate the background cough. So to the point of is more better, that's consistent with the class, but it needs to be tolerable. And I think that's what we're showing in the market and in the studies.

Okay. So maybe let's talk numbers, right? You you're almost close to 5,000 unique prescription written since the time of the June launch. And I think the messaging has been it's a rough split maybe between the 2 indications. And so how do you think longer term, like, in terms of growth sources? Because by our math, I think Tyvaso, which was nearing $2 billion at roughly 200,000 a year, implies about 10,000 patients. So that's a pretty impressive number given where the incumbent product was.

Yes. I mean, like I said earlier, we couldn't be happier with the launch. The uptake has been significant. As you said, from a disease breakdown. We've seen roughly since the launch, and it's been pretty consistent, about 50-50 between PAH and PH-ILD. I think the interesting thing about the opportunity going forward is what we believe is that we're just scratching the surface here. So if you look at the prostacyclin market in PAH, it's about $3 billion total, broken out by the oral prostacyclin market, which is about $2 billion and 10,000 patients. The traditional inhaled market was around $500 million, and then the parenteral market was also around $500 million. So that total opportunity is $3 billion.

And that's something -- and when you ask about what surprised us at the launch is one thing that we've seen based on what we talked about, the attributes of our product, the dosing flexibility of our product, we believe we can access that entire market or the vast majority of that market. As Jason had said, we've done the ASCENT study in PH-ILD. We're always looking to improve the product profile of YUTREPIA, putting more data in the hands of physicians, which is why we're planning additional studies here in 2026 to look at oral transitions from selexipag, which is UPTRAVI and also looking at a study to transition patients from parenteral treatment who are also on sotatercept.

So when you look at the longer-term opportunity, we think that opportunity in PAH is a $3 billion opportunity, not a $500 million opportunity like many people thought when we launched. Now PH-ILD is a little different because it's relatively new. The first product was approved in 2021. We believe that the market penetration in PH-ILD is probably still less than 20%. So there is a massive market building opportunity in PH-ILD, which we are working on. We've always looked at that as a longer-term opportunity. We also have announced that we're increasing the size of our sales force by 33%.

The focus on that is going to get a deeper reach into local community physicians and centers where a lot of these PH-ILD patients are sitting, sometimes even undiagnosed. So there's an education on disease education, diagnosis, ways to diagnose. And we think as we move through 2026 and beyond that, that PH-ILD opportunity as a total market could be $3 billion, $4 billion, $5 billion.

Okay. And I think you framed about 75% of use, new patient, 25% switches. Is the right way to think about that number that most of that new patient is PH-ILD, whereas most of that switch market is PAH because PAH is a more mature category. PH-ILD is underpenetrated. That's at least in my mind, where I would expect more of the market expansion to be occurring.

Yes. I mean I think intuitively, I think that makes sense as largely PH-ILD is a market building exercise, and the vast majority of those would be new starts. That's not to say we aren't seeing switches in PH-ILD. But as you said, in a more mature market in PAH, that market is growing probably more slowly as we go. You have patients who are progressing through the disease and new patients coming in. But I think that the funnel, the top of the funnel on new patients is probably is going to be much bigger on PH-ILD than it is on PAH at this point.

Yes. I believe you've expanded the sales force. Can you talk a little bit about the rationale there? Is that driving -- is the intent there to drive greater breadth of use in the community or just or depth of utilization?

Yes. So one of the benefits, and as I said in the open, we're a unique company in the sense that we're in our third quarter of launch. We're generating positive cash flow. We've been financially disciplined from the beginning. This is all while we're planning or executing on clinical studies. We're building a new manufacturing facility in North Carolina to almost triple the capacity of YUTREPIA. But one of the opportunities we're always going to look to is to invest into the opportunity. And one area that we're investing into is the sales force, like we said. We're going to -- we've increased that by 33%. These people are all on board. They're in the process of training, and the plan is to have them in the field in June. Now the goal for that is really to expand our reach to get deeper into the local community where we're really addressing PH-ILD.

Now when you talk about breadth and depth, we've given a lot of stats -- statistics of our launch through the entire launch. And just to reiterate some things that we've talked about, we provided data as of the end of February and then again at the end of April earlier this week at our earnings call. If you just look at the increase from February to April, the amount of prescribers who have prescribed 5 or more prescriptions increased by almost 25% just from the end of February. The amount of new prescribers just from the end of February has increased by 15%. So the goal here is we know in order for us to achieve the goals that we're looking to achieve, expanding both the breadth and the depth is going to be critical, and we're doing everything we need to do to expand both of those metrics.

Can you put those metrics into more context in terms of oftentimes, early launches could get driven by a subset of high prescriber. Is that a pretty broad number relative to what you envision as like the total prescriber base longer term?

Yes. I mean, listen, we couldn't be happier. At launch, we were targeting about 6,500 physicians. So we are just still scratching the surface, which -- it's really what excites us about the overall opportunity. We feel that there is still a tremendous opportunity, obviously, in local community on the PH-ILD side, but even in the centers, we are -- we feel that we are getting entrenched there. Physicians are getting great experience with YUTREPIA. They're seeing the benefits it's having to their patients. And ultimately, like I said and what Roger has said all along is we want to be the prostacyclin of first choice. And that's both from traditional inhaled patients and also those who could be switching from other therapy.

So everything has met our expectations. Like I said, some have exceeded our expectations, especially the opportunity on the oral front. But the bottom line is we are extremely focused. We are building great relationships across the physician space. We have a best-in-class commercial organization. We have a best-in-class market access organization. Our pull-through rate is over 85%, which for those who've been in pharma for a long time, if you had a mature product 10 years into launch and you were at 85% pull-through of referral to first fill, I think people would be happy. And we've seen that from the get-go.

So we could not be executing any better at this point. We're always looking to improve but the bottom line is, I think we are -- we have had a tremendous uptake, and we're looking for a lot more here in the years to come.

Yes. Okay. And so I think you indicated in your most recent 1Q update something like 4,700 or so unique prescription.

4,500.

4,500. Sorry, with a very high conversion rate to turning that into a paid script. Correct. Right? So your 2027 outlook is $1 billion plus right? And so...

$1 billion.

$1 billion flat. Okay. Because it doesn't take an MIT scholar to figure out the 5,000 patients would get you to $1 billion. So I guess what I'm asking is, is that $1 billion conservative?

It's interesting that we're here talking about whether $1 billion in our second year of launch is conservative, but I take that as a compliment. Listen, there are other nuances. We do have a component of free drug. We do have a patient assistance program. We have a best-in-class patient support services, which includes a patient assistance program that roughly 10% of patients are participating in, which is pretty standard in this space. We also have a voucher program for any patient, their first 28-day script is free -- can be free, and we've seen utilization of over 50% on that. So we are -- we have been on a trajectory that if you look at patient starts from the launch to end of April, where we've given our last data, it has literally been a linear curve.

And so for us to stay on that trajectory, just staying on that trajectory is going to achieve this goal. There is no bolus that has to happen. There is no hockey stick that needs to happen in order for us to achieve that $1 billion. So we're confident. I think we've taken pride on talking about when we succeed and we execute, we'll tell you about it. We're not making these bold predictions and whatnot. But we feel that $1 billion in '27 is definitely within reach and within sight and part of our operating plan as we move forward.

Okay. And then 2 dynamics. I'm just curious, do you envision sort of the 10% free drug is a good ratio in the next few years? I know that maybe comparable drugs, I've heard similar metrics, and so that makes sense to me. And then have you any learnings at this point around how long patients are staying on and what the discontinuation profile looks like?

Yes. I mean we're still very early. We're still 10, 11 months into a launch. So I think to talk about persistence and durability, it's probably a little early. I think what's important to understand, though, is these are very sick patients, and these are very sick patients that progress through these diseases, both PAH and PH-ILD. We believe our product profile is best-in-class. So to say that there are no discontinuations, that would -- that obviously is not the case. But we're very happy with where we are. We're providing patients with a choice. Our ability to titrate to higher doses, I think, is helpful to help deal with the disease progression, something that these patients have not seen before, given the limited dose capacity or what we've seen traditionally with competitive products.

But it's something that we'll monitor and continue to monitor. And we're not prepared to talk about that specifically now but we're very happy with the product profile of YUTREPIA and the success that it's going to bring and the relief it's bringing to patients.

Got it. And getting to that $1 billion, I think you flagged a couple of sources, new patient adds, oral inhale switches, PH-ILD white space and then depth per prescriber. So when we sit here today and think about these things, which of those need to accelerate just versus what needs to persist?

I think if we stay on the plan that we're on and the trajectory we're on, I think things will work itself out. And I think when we launched, a lot of people said, "Oh, there'll be a bolus of patients. There's warehoused patients and then it will flatten out. We've seen no flattening out. We've seen a continued trajectory. Like I said earlier, if we stay on that same trajectory, which we see no reason why we can't, but we also talked about that we think this could be a $6 billion, $7 billion opportunity in PAH and PH-ILD that there is a massive, massive opportunity. We have the flexibility to have capital. We have over $220 million of cash on our balance sheet to invest where we see opportunities to invest. We've never hesitated to do that.

As I also said earlier, we're planning additional studies, both in new indications but those that will improve the product profile of YUTREPIA here in the short term, where we hope and plan to have a steady stream of data starting in 2027. in oral transitions, in Tyvaso transitions, in transitions from parenteral on sotatercept. So we feel very happy. We're putting ourselves in the best position to succeed. We're putting -- we want to support this patient population that has always been our -- we're here to benefit patients, and we want to put as much data in the hands as we can.

But the bottom line is staying on the trajectory, nothing crazy has to happen in order for us to achieve that goal. If we stay on the same trajectory that we've been on for the first 10 months of launch, we're very confident that we can achieve that.

Okay. I know Rusty is not here, but I have to ask the question. Just around freedom to operate in the litigation matter on the 327 patent, it's really dragged on. And now it creates a -- if the judge were to reach certain decisions, it creates a very problematic issue for all these patients now who are on YUTREPIA. So anything you can offer around just freedom to operate in scenarios?

We're probably the wrong people to ask because if you asked us in July, we would have said we thought a decision was coming in September or October. Now it may be September, October, it could be 2027. But the bottom line is we expect a ruling any day like we've said from the get-go. Obviously, it's frustrating living with that but we're just focused on execution now. There's nothing we can do about it at this point. We are focused on our pipeline. We're focused on the YUTREPIA launch. We do expect a decision at any time. We are confident. We believe the facts are on our side. We believe we should win the case but we're waiting like everybody else.

And the only thing I'll leave you with is, like any good management team, you're going to be prepared for any results. So we have war-gamed this. We've had conversations with -- internally, externally. Whatever the decision is, we'll be ready to move forward. And we feel very confident in the arguments that we've made. We feel confident in the facts of the case, but we await like everybody else.

Okay. Maybe we can just talk a little bit about future plans, sales and marketing investments, be it on Phase IV data generation or I know that with PH-ILD, the diagnosis was something that at least your competitor flagged as something doctors needed perhaps more education on to identify these patients. And so if you think about some of the initiatives on the come for accelerating growth?

Yes. I mean, on PH-ILD, education is very important. So expanding our sales force by the 33% like we talked about is critically important, getting them into the field, building new relationships. And as you said, educating these physicians, both on disease identification but then also on diagnosis is critically important. We also, like we said, our successful launch has been amazing. The ASCENT data that we generated in PH-ILD, I think, was critical to that success. And we're looking to mirror that through these other Phase IV studies, like I said earlier, a transition study from Tyvaso and Tyvaso DPI, an oral transition study in PAH, a parenteral transition study against -- alongside sotatercept.

We think all of this will add to the product profile, putting more data in doctors' hands, making them more comfortable on how to initiate YUTREPIA for these patients, we think, is all going to go a long way. If there are other opportunities for us to do that, we've afforded ourselves the opportunity to be able to invest further based on how we have invested into the launch, the amount of cash generation that has occurred, I think, puts us in a really good place. Roger has said from the get-go, our goal is to grow profitability quarter-on-quarter every quarter and reinvest part of that profitability back in the business.

So the idea that we're able to be 10 months into launch, be able to plan be either executing on, planning, initiating 8 clinical trials while also still generating positive cash flow, I think, makes us extremely attractive from an investment point of view. And the sky is the limit for us here as we get through the end of '26 and into '27.

Okay. Let's talk about just price and access dynamics. 2-player inhalation market doesn't appear that you're driving a ton of switch from your competitors. So that would suggest to me there's price rational behavior and that we should think about this as a relatively price stable market that won't impede the volume growth that we expect YUTREPIA to enjoy. But is that the right way to think about it? I know there was -- you alluded to some gross to net uptick in '26 as you build out better access. But I'm just wondering, is that modest ultimately? And just how to think about those dynamics?

Yes. I mean I think if you look at one of our goals prior to launch, and we always talked about this, was to making sure that patients had a choice. We wanted to make sure that if patients and doctors wanted to choose YUTREPIA that there would not be hurdles placed in front of them. And through the work of our -- like I said, our best-in-class market access team, we have achieved that goal. We have achieved that goal that if patients want to try YUTREPIA, they're able to try YUTREPIA. We had said previously that there were some standard new-to-market blocks that had existed at launch that is very standard across the payer landscape. As those have come off through the back end of '25 and the early part of '26, there would be a natural slight degradation in our gross to net, which we had fully expected.

So I can't speak to what our competitors do. Our goal, as I said, is to have access. We've achieved that access. And we think that for -- everything obviously can change at any time, but we feel very comfortable that most importantly, that we've talked about the value proposition that YUTREPIA brings to patients and the health care system as a whole. I think that has largely been adopted. And ultimately, we feel that we're in a really good place from a pricing point of view.

Okay. Can you talk a little bit about the dynamics in PH and where inhalers are now playing because Merck's WINREVAIR after the HYPERION data, it does seem like it's getting more traction in a newly diagnosed patient after they get their generic doublet. It seems like there's an earlier push to go to WINREVAIR. And so what does that mean for the sequencing of inhaled versus oral versus parenteral?

So it's a great question, and it's an exciting time for the market because these better medicines are coming to treat patients. And so the medical community will figure out the best way to use them. And it's even happening outside of our control, meaning we can do a study that looks at using YUTREPIA with sotatercept, but it's actually happening out there. There's a poster at ATS where a hospital has tried this in multiple cases. So we're looking forward to seeing what that looks like as they think about the use of background medicine in patients who might be on an IV or subcu treprostinil moving them to inhaled.

So when you think about sotatercept, the prospective data and the real-world data suggests that you want to use it with a prostacyclin. There isn't anything that says you shouldn't use the prostacyclin. So then the question is, what is the highest dose, most tolerable, convenient way to do that. And we think it's going to be inhaled treprostinil. And currently in the market, YUTREPIA is quickly gathering share because it is very tolerable at high doses and it's convenient to take.

So by that logic, then perhaps the success of WINREVAIR may pull forward inhaled at the expense of parenteral oral even oral?

Yes. That may happen even regardless of sotatercept. As Mike said, we're seeing transitions from oral right now, right? We're seeing transitions in the field of IV to inhaled. And so if sotatercept is a vehicle to improve patient care, yes, we think inhaled prostacyclins may be the best. And currently, we believe our product is that product.

Yes. Okay. Maybe shifting gears to just competition. There's obviously Insmed's TPIP, a once-daily inhaler. You have your BID inhaler. There's been more recent disclosures by United about both a soft mist inhaler that will have some healthy volunteer data. And then there's ralinepag DPI as well. And not much is known about these products. So it's a bit of an unfair question, and I can see that. But nonetheless, I guess you guys have at least made some public statements about the micron size with soft mist inhaler. And so that raises some questions at least around what the tolerability differentiation could be of an approach like that. What do we know about ralinepag DPI? Is there much out there?

Well, I mean, it is a question that we're getting asked a lot because we're happy to talk about anything. But I think we bring it back to what is the bar and what is the comparison of any new product. YUTREPIA has lifted the bar for what inhaled prostacyclin can be with treprostinil, meaning high doses in a convenient way that's tolerable. So everything else that's coming along is going to have to meet that bar. But we recognized that a few years ago, and it's why we licensed L606, a twice daily, even more tolerable way of inhaling treprostinil to lift that bar. So it's interesting that all of a sudden, these new products are coming along with no data to tell a story that isn't even compared against what the best product in the market is today, which is YUTREPIA or against what's coming.

So I mean, ralinepag, we've seen some data. It doesn't appear to be safer than selexipag and may be worse from a tox profile. And it's being developed, as we understand, on the MannKind platform, which we're currently competing against in the market today, and we don't believe that, that's more tolerable. So we don't put much thought into ralinepag DPI. And the soft mist inhaler, while it is an interesting idea, is not a new idea. It's been around for decades. And in fact, we look at that more as a way of trying to make nebulized treprostinil or Tyvaso more attractive in that product format. Again, we're focused on our business, which is how do we ensure that the market understands the benefits of YUTREPIA.

Understood. So -- and of those, I guess, the most tangible update in theory could be soft mist inhaler approvability sometime next year, right, if the company is able to deliver on their timelines. It sounds like you don't see that as a material market-changing event.

Not from our perspective. I think the other thing you have to remember is you get what you study. So if you study something really fast, you may not be generating the data that the medical community would want. And that's, again, why we're making choices to prospectively study questions that are interesting to the community. It's why we did the ASCENT study in PH-ILD. It's why we're doing the transition studies. And ultimately, that is what builds trust, right? So it's not speed to market. It's give me the information that I can trust when I'm treating a lethal disease, and that's what we're focused on.

Yes. Okay. Ahead of ATS, is there anything you guys would flag that you think is interesting? What are you guys really keying in on here?

Well, I mean, it's a great conference for physicians who treat pulmonary hypertension. We're going to be looking to see what new data is being presented both by competitors, but also what's coming out of centers. I mentioned that there is a poster that we're interested in seeing related to how patients might be transitioned from IV to YUTREPIA, and that's being done outside of our control. So that's what we're excited by. If we can put good information into the medical community, they'll get to choose the types of studies that they might run themselves.

Yes. Okay. I guess lastly, just with L606, do you view this more as life cycle management or something that could expand the opportunity even beyond what you're realizing with YUTREPIA?

Well, so it's an interesting question. So if we just stick with PAH and PH-ILD, I think our goal is to make sure that we're continually optimizing the benefit of that drug in that route, right? So L606, twice daily, gives us more continual exposure, which is the goal, right, at lower Cmax, so a better tolerability profile. In fact, we think the most tolerable of any prostacyclin study to date in the inhaled route. And that's what we're kind of focused on. So it's hard to suggest that any other product is going to do better than that in those diseases.

But at the same time, we're looking to expand into other diseases. So we've mentioned that we have a PH-COPD study that we're interested in. We've mentioned systemic sclerosis with Raynaud's phenomenon. So the idea is, where else can we take inhaled prostacyclin. So not just in the current diseases, but potentially new diseases in terms of the growth.

Okay. We're out of time. So, gentlemen, thanks so much for joining us.

Thanks for having us, Jason.

Thanks, Jason.

Good morning, and welcome to Liquidia Corporation First Quarter 2026 Financial Results and Corporate Update Conference Call. My name is Jonathan, and I will be your operator today. [Operator Instructions] Please note that today's call is being recorded.

And now I'd like to turn the call over to Jason Adair, Liquidia's Chief Business Officer. You may proceed.

Thank you, and good morning, everyone. It's my pleasure to welcome you to our first quarter 2026 financial results and corporate update call. Joining me today are Dr. Roger Jeffs, Chief Executive Officer; Michael Kaseta, Chief Operating Officer and Chief Financial Officer; Dr. Rajeev Saggar, Chief Medical Officer; Scott Moomaw, Chief Commercial Officer; and Rusty Schundler, our General Counsel.

Before we begin, please note that today's discussion will include forward-looking statements, including statements regarding future results, product performance and ongoing clinical or commercial activities. These statements are subject to risks and uncertainties that may cause actual results to differ materially. For further information, please refer to our filings with the SEC, which are available on our website. Please also note that our earnings release and our commentary include non-GAAP financial measures. Reconciliations of these non-GAAP financial measures to the most comparable GAAP measures can be found in our earnings press release.

With that, I'll turn the call over to Roger.

Thanks, Jason, and good morning, everyone. We're delighted to share our business results with you today. We'll keep our prepared remarks somewhat brief this morning as we'd like to allow as much time for questions as we can. Having said that, I'd like to share some bigger picture thoughts regarding the state of the business and allow the Q&A to serve as the time to delve into the specifics. Three full quarters into the commercial launch of YUTREPIA, I would summarize the state of our business with 3 main points. The first is that in the third full quarter on the market, EtrepIis now leading the growth of the inhaled prostacyclin category. -- eTruck is well on its way to becoming the anchored inhaled therapy for patients with PAH and PHLD.

As of April 30, we have received approximately 4,500 unique patient prescriptions and started approximately 3,750 patients on therapy since launch. And approximately 980 physicians have prescribed YUTREPIA since launch. This breadth of prescription is also complemented by increasing depth of prescriptions. For example, just since the end of February, the number of physicians who have prescribed YUTREPIA to 5 or more patients has grown 25% to approximately 270 physicians. What this clearly demonstrates is that physicians who try YUTREPIA are coming back to it for more and more of their patients. That is the pattern you see when a therapy is becoming foundational to a treatment paradigm, not when it is being trialed as an alternative and strongly suggests that YUTREPIA is already establishing itself as the best-in-class and first in choice inhaled therapy.

This increasing breadth and depth of prescriptions is driven by a product profile that is setting a new bar for others to match, one where targeted pulmonary delivery minimizes off-target effects with the formulation technology that preferentially lessens upper airway intolerance while enhancing local effects on the alveolar capillary membrane. This allows for higher dose attainment and most importantly, better and more durable patient outcomes. The second main point is that we are purposefully and diligently broadening the opportunity in front of us by launching additional studies. We have started recruiting into Cohort B of the ASCENT study. to transition inadequate responders from Tyvaso DPI to YUTREPIA. And in order to provide empiric evidence that higher doses of YUTREPIA are uniquely well tolerated and advantage versus competitive alternatives.

Additionally, we are actively screening patients in our pivotal Phase III RESPIRE study of L606, the most tolerable inhaled treprostinil study to date as advanced by our 48-week data from the open-label U.S. study in PAH and PH-ILD patients. In addition, we are also advancing clinical programs to expand the role of inhaled procecycling into other serious pulmonary and vascular diseases. such as IPF, PPF, PH-COPD and scleredema associated Raynaud's phenomenon. For all of these opportunities, mechanistic validation largely exist, the unmet need and high opportunity value remain. We believe the differentiated tolerability and dosing profiles of both YUTREPIA and L606 is foundational to that opportunity. as it may support improved patient retention while also enabling higher therapeutic exposures over time.

The through line of our clinical investment is that we have extraordinary and real potential to expand the franchise value of our portfolio by multiples in the years to come, with therapies that reimagine what a best-in-class profile must be. The third main point is that we have established a profitable self-funded business in a remarkably short period of time. We have now delivered our third consecutive quarter of profitability with top line growing, bottom line growing and cash growing which Mike will expand on shortly. What that gives us is the freedom to reinvest our own profits into the next phase of the company's growth. We are building new manufacturing capacity. We're advancing both YUTREPIA and L606 in a related array of clinical studies, and we are doing it all of it from operating cash flow rather than via the capital markets. This is rare in our business, especially at this early stage of our commercial life cycle.

To put it all in context, we could not be happier with where the business is today, and we are even more excited about where it is going. YUTREPIA has already exceeded $0.5 billion in annualized net revenue run rate in less than 1 full year on the market. Our clinical programs are fully funded by operating cash flow and we have a clear line of sight to at least $1 billion in net revenue in 2027 with multiple growth opportunities to sustain further growth well into the future. And what gives us confidence in achieving our ambitions is that the engine that gets us there is already up and running flawlessly.

With that, I'll turn it over to Mike to walk you through the financials.

Thank you, Roger, and good morning, everyone. As Roger has indicated, the first quarter is a continuation of the story that we discussed in March, sustained patient growth and disciplined execution. Net product sales of YUTREPIA were $129.9 million in the first quarter of 2026, up from $90.1 million in the fourth quarter of 2025, representing 44% sequential growth in net product sales. The first quarter also marked our third consecutive quarter of increasing profitability and the growth from quarter-to-quarter is striking. Net income was approximately $52.9 million, up from $14.6 million in the fourth quarter of 2025. Non-GAAP adjusted EBITDA was approximately $71.2 million, up from $27.3 million. We almost tripled our EBITDA profitability from Q4 to Q1.

We've achieved this increase in profitability while continuing to invest more heavily into the commercial organization through our sales force expansion and expanding our manufacturing capacity and footprint in North Carolina and in our clinical development programs. We ended the quarter with approximately $222.8 million in cash and cash equivalents, an increase of $32.1 million from year-end. So in addition to growing the top line, we continue to grow the balance sheet that funds our priorities and are confident in our ability to remain profitable in the future.

Roger, back to you.

Thanks, Mike. As we close out our third quarter on the market, what stands out to me is how much we have built in such a short period of time, a product that is leading the growth of the inhaled prostacyclin category in PAH and PH ILD. a pipeline with multiple paths to extend the franchise well beyond where it stands today and a self-funded business with the freedom to invest in its own future. We have never been more confident in where this company is headed based on the robust momentum we continue to see in this business.

With that, operator, please open the line for questions.

[Operator Instructions] Our first question comes from the line of Amy Li from Jefferies.

Excellent. Congrats on the amazing progress. Based on our math, it looks like you're seeing a slight acceleration of unique scripts and patient ads as well as an improvement in script to start in March and April. Can you give us a sense of what current growth is being driven by in terms of PAH versus PLDs, new patients or switches academic or community and any other relevant metrics.

And then just a quick follow-up. Do you see any read across from the Hikma versus Amarin prime port case to the 327 litigation?

Amy, thanks for the question. So there has been a slight acceleration in referrals and patient starts. But I'd say largely things are sustained and consistent. We don't want to forecast accelerating growth here. I think if we sustain the growth that we've seen since the beginning of launch and you just take that at your average, I think everything we've predicted around 2027 being $1 billion in net revenues, still holds true for us. I think where we're seeing robust growth is, as we sort of highlighted in the script is that is in the depth of prescriptions. So we are gaining more prescribers, and we're just getting them to trial the drug. And certainly, as they get to 2, 3, 4 and 5 starts, then you start to see sort of this almost trigger change where they just begin using YUTREPIA preferentially. And I think the product profile is speaking for itself, that is redefining kind of what is required for prostacyclin therapy. You need one that's direct to the site of injury. So it has to be to the lung. It has to minimize lung intolerance as well as off-target effects, which the print formulation certainly does.

And then because tolerability and dosing are inextricably linked, it allows for higher dosing, which allows for better outcomes. So when you have that type of product profile and sites have their own "critical mass" of trialing the drug, it quickly then becomes the preferred therapy at centers. And that's what we're seeing. We're certainly driving all of the growth in the space currently. If you sort of aggregate our revenue and our competitor revenue over the quarter, the market grew about 5%, and we were responsible for all of that growth, which we're quite pleased about, and I think it speaks for itself about what the leading therapy is. We still see equal scripting between PH and PH-ILD. The pull-through still remains around 85%, which is extraordinarily good. And the naive and transitions are, again, about 75% to 25% as it has been before. So it's a bit more of the little engine that could, doing all that it has from day 1 and sustaining that trajectory.

And then, Rusty, maybe you could talk to sort of thinking around Hikma and if there's any read-through from that case.

Sure. Thanks, Roger, and thanks for the question, Amy. So I think if you look at the Hikma case and look at the briefing and the oral argument, that case really is a case about what's necessary to show induced infringement. Obviously, that's what's an issue in our case with at least 4 of the 6 claims where the parties are contesting [indiscernible] therapeutics patents. I think also if you look at some of the conducts that's an issue in the HIKMA case. I think there are some clear parallels to the conduct that United Therapeutics has cited in our case. So I think there are certainly some similarities now whether -- how Hikma is going to be decided, whether it's going to affect Judge Andrew's decision, whether it affects the timing of Judge Andre's decision, I think that would be speculation on speculation and not an area we're going to get into. But I think at least based on what we know today. So certainly, there are some parallels between the cases, but it's really hard to comment beyond that.

Yes. And I think I would add, look, we remain very confident in the arguments that we made in the case and are bullish on the outcome of the opinion when it's rendered. And I think if there's any read-through from Hikma, we also feel that potentially would go in our favor as well.

Our next question comes from the line of Ryan Deschner from Raymond James.

Congrats on another really strong quarter. By my math, the YUTREPIA launch has now eclipsed the early launch trajectory for your competitor. In terms of net sales, -- what is the current split between prescribers in major centers and smaller community prescribers look like? And how has this been falling thus far for the launch? And then I have a follow-up.

Yes. We're fortunate to have Scott Moomaw, our Chief Commercial Officer on. So Scott, if you wouldn't mind responding to that question.

Yes, thanks. So as you would expect and as we mentioned on earlier calls, the centers were jumping in early. They had those patients, they are prevalent and ready to go. -- and they continue to be a mainstay. Although I will say we have centers that are coming on even still now, whether they would be late adopters or they're starting to see those patients back after 6 months and starting to see the results of RPI -- having said that, we are having more success in the community, whether that be physicians who have used a PH drug before or even some physicians who have -- who are ILD prescribers with the antifibrotics, but we are ready to try a prostacyclin. So the balance is definitely changing a bit more towards what we call the community, but the centers are still the largest cohort. And of course, they actually are still growing as well.

Great. Thanks, Scott. I would just maybe add, again, it's an anecdotal, but 1 of the favorite story feedback stores that we continue to get is, again, the competitor product has been on the market for years ahead of us. And it counter detailed us quite strongly. So when we went to centers, people would -- some of the physicians would say, they felt that these drugs were sort of -- were more alike than not. But then when we go back to them and they begin prescribing YUTREPIA, they come back with their own anecdote around that they're seeing a night-and-day difference, particularly around the cough and the ability to hydrate and drive outcomes. So it's those types of stories that resonate with me. And I think, again, it's very hard to beat a better product profile, and I think that's what YUTREPIA.

And our next question comes from the line of Serge Belanger from Needham.

Roger, we're coming up on the 1-year anniversary of FDA approval YUTREPIA. So you've been in the market for close to a year now. How large do you think the PhD ILD opportunity currently stands at? And how large do you think it could be? And then 1 question for Mike. I noticed you're now an income taxpayer of the company. Just curious if this is a one-off or you expect to continue being paying income taxes going forward and at what rate?

Thanks, Serge. I'll take the first question around PHR. So if you aggregate just inhaled your passion market today in real dollars, it's about $2 billion. And that seems to be split somewhat evenly between PH and PhD at least for us. So clearly, the PH-ILD market is massively underpenetrated. I think we're driving awareness. I think our competitors driving awareness I think there's going to be a rising tide phenomenon for that. Our belief is that's well in excess of $2 billion to $3 billion on its own in PHI -- and then don't forget with the oral process cycles, if you assign $1 billion in today revenue value, the oral market there is $2 billion in value. So there's another $3 billion. So just across PH and PH-ILD, there's a potential -- and again, with clear line of sight without a lot of exaggeration or hyperbole to $6 billion in revenue. So a lot more runway here for us to continue to grow this franchise significantly.

And certainly, as we begin to develop L606, which we're actively recruiting, we've had patients in screening already that's the next-gen molecule that can further open up access to these markets. So again, I'm very pleased with where we are today, but excited about where we're going to go tomorrow as well.

And maybe, Mike, I'll turn it over to you the tax question.

Yes. Thanks, Roger, and thanks for the question, Serge. As you saw, we did record income tax expense in Q1, as Roger has said in the prepared remarks, we're growing profitability. We're growing at a quick pace. We would expect to continue to show income tax expense as we move forward as we've been saying since launch, and we'll continue to say our goal is to obviously grow sales but also grow profitability and reinvest some of that profitability into the business. So the expectation is that we will have increasing net income and adjusted EBITDA as we move forward. And correspondingly, we'll have additional income tax expense.

And our next question comes from the line of Julian Harrison from BTIG.

Congratulations on all the recent progress. Two for me. First, are you seeing any emerging trends among patients switching to Trevi from other therapies has there been acceleration on that front at all? And what is the most common product you're seeing switching from at this point? .

And then second, thinking a little bit more about your $1 billion revenue by 2027 guidance that you announced earlier this year. Is there a chance you could achieve that on a run rate basis before 2027? Any thoughts there?

So in terms of trends in switching, maybe I'll ask Rajeev to talk about that from his observations when he's been out in the field talking to docs. And then also maybe, Rishi, if you could speak to the studies that we're doing to direct patients from other process cycles to YUTREPIA as well. And then, Mike, if you'll not answer the question on run rate. Your best question to answer for Julian, that you can when you get there. So Rajeev?

Thanks, Roger. Thanks, Julian, for the question. So I think what is clear is that -- and I asked to this before, I think the community and the centers like, I think we're experiencing an inhaled renaissance. And I think this is clearly being led by YUTREPIA's product profile. I think that Roger continues to highlight in this call, and that's really that the tolerability of our print formulation has led to the ability to dose higher. And we showed in our [indiscernible] that as we go up every higher every 8 weeks, that has resulted in notable changes in exercise capacity for these patients to distances and changes that we have not seen in the past. And where this has gone is that practitioners in our opinion, when we speak to them, has realized that especially with this vast armamentarium that's now available in both Group 1 and now also that we're moving more towards making the patient not only clearly wanting to feel better, walk further, live longer. But we need to do that in a way that is extremely tolerable.

The construct of using pumps and even oral prostacyclins, especially given their significant GI intolerability has allowed the market to take a look at YUTREPIA in a different perspective. In particular, what we're realizing is that the oral procycling market has -- in those practitioners, we've seen a large switch over to YUTREPIA. And although the pharmacokinetics are different, I think, again, the fact that we can dose YUTREPIA 1.5 to threefold what has traditionally been used with inhaled treprostinil has really opened their eyes to the fact. And the argument can be made well is 4 times a day. And that's correct. But the advantage of inhaled is that it's directly being administered to the lungs. We can negate all the -- significantly negate many of the off-target systemic side effects that are notable with oral prostacyclins regardless of the dosing frequency of the patacyclin.

And finally, with the use of setatersebt coming abroad, I think we're seeing a huge number of practitioners starting to say why are we putting patients on parenteral therapy and a pump, which obviously had its advantages historically. But now we can wean that pump down, transition that also to YUTREPIA. And I think we'll see some abstracts being presented at ATS highlighting the utility of YUTREPIA in combinatory [indiscernible]. And I think from a company's perspective, we realize this is where we need to continue to create the data and show physicians how to also do it from a trial perspective. We've now started recruiting into Ascent Cohort B, which is patients that are inadequately responsive to either Tyvaso nebulizer or Tyvaso DPI and transitioning that to YUTREPIA.

We're also planning in the very near future to initiate transitioning from oral [indiscernible] to open-label YUTREPIA. I think that one, of course, we initiated doing that because of, again, what is happening in the community. And finally, just to rehighlight we need to provide how to actually transition from parenteral therapy on patients on sotatercept and how to transition off the pump directly to YUTREPIA. And that study, we hope to be initiating some time in 2026-2027. So Hopefully, that provides a detailed response to your question, Julian.

And Mike, if you'll talk about that run rate.

Yes. So just to take the step back and thanks for the question, Julian. Just looking back from Q3 to Q4 and Q4 to Q1, we showed from a revenue share an inhaled proactin we've gone from Q3 of a 10% market share to Q4 at about a little over 16%. And in Q1 of '26, we've grown that to almost 23%. All while the market grew in Q4 and Q1 each by 5%. And this is in spite of the supposed terrible weather in the winter months here in Q4 and Q1. So I think what we've shown is nothing short of amazing in terms of that growth. We see continued growth as we move forward. As Roger talked about, the opportunities in both PAH and PH-ILD, we think, are massive. We have a tremendous amount of momentum. We have a best-in-class product. We have a best-in-class commercial organization and medical affairs organization. And we have nothing but confidence as we move forward here. We're not going to talk about run rate as we get towards the back end of the year. Rogers talked about at least $1 billion in 2027, but we feel that we have a tremendous amount of momentum that we will continue to build on as we move through the rest of 2026.

And our next question comes from the line of Ben Burnett from Wells Fargo.

I wanted to actually ask about L606 and sort of expectations for the Phase III. -- based off the Phase II or the open label, I think patients were able to get at kind of 229 micrograms. That's -- I guess that's the median. But what are your expectations for kind of the dose that's achievable in Phase II?

So thanks for the question. Again, over to Rajeed for that.

Yes, Ben, thanks for the question. I think just to recite to the audience L606 is our [indiscernible] inhalation suspension that is delivered twice a day. And I think one of the things YUTREPIA cannot solved as the 4 times a day, and L606, we are confident is going to be able to achieve the result that will be robust. We're obviously studying this in the setting of PH-ILD, and we anticipate the first patient to imminently come through in the short time period. In the open-label study, I think what we highlighted was really our construct that if you can deliver this twice a day, you can also sustain pharmacokinetics of treprostinil not only during the day, but an equivalent amount at night time. So that when you do a 6-minute walk test, we anticipate that we will not see a notable difference between trough and peak. And I think that's very important because when the patient wakes up, they should feel as good as they did as the day before when they're walking around.

In terms of dosing, I think what we have learned with YUTREPIA is that we need to continue to provide customization to dosing to the patients. And to do that, we should be able to dose to maximum effect and those that can tolerate and clinically need it. And there'll also be patients that also need maybe less less amounts based on their own clinical response. So I think the jury is still out. I think what is clear is that the way that we've created our dose levels do allow for significant dose titratability to levels that we also have been achieved in our -- with YUTREPIA are to use comparable dose level effects.

And our next question comes from the line of Jason Gerberry from Bank of America.

This is Melanie on for Jason. Going back to the PLD market opportunity. assuming no change to the market indication statement, can you talk about the challenges and opportunities with opening up that market opportunity? I know you talked about market penetration already, but how penetrated is that market currently with inhaled panel is there a hurdle market? Is the hurdle market education and free diagnosis?

Great. So Scott, maybe you could take the answer on kind of what our expectations are in PH-ILD and where we are today.

Yes, sure. Thanks. So I think we've said that we started with PH-ILD being a smaller percentage of the patients as we -- they are just a little bit of a slower burn in that market, but we're now to the point where it's pretty balanced in terms of 50-50. So you can see already that PH_ILD has increased. I think -- with that said, the market is still 60,000 patients. And there is a lot of headroom here for this to continue to grow. I think as Roger alluded to earlier, 2 companies in this space educating, working on awareness, diagnosis and treatment is going to rise the tide for sure. One of the reasons we're doing the sales force expansion here over the next couple of months is because we want to penetrate further out into the community market where these are physicians, community pulmonologists to prescribe who see ILD patients but they don't spend a lot of time thinking about it at any time thinking about whether those patients have PH. They'll give them antifibrotics and then they'll do the best that they can.

But having said that, I think that there's an opportunity to get out there to talk to these physicians because many of these patients are out there in the community, and they haven't made it to a center yet. So you go to that doctor, you make them aware, you get them thinking about PH-ILD, you explained to them what a terrible disease this is and what the mortality looks like for it and then ask them to look for it. And if they're either treat it, or diagnosis, I should say, diagnose it and then either treat it or send it into a center. But I think that's where the opportunity lies as those patients that are out there are kind of in the jungle, and that's why, as I mentioned earlier, we're expanding the sales force. So we think there's a great deal of opportunity there.

Yes. And the other thing I would add, there's recent registry type data that's coming out that's showing that 50% to 75% of these patients actually have a PH component to their ILD. So really, as Scott said, it's driving awareness and getting them to refer to a cath lab to do a definitive right heart cath so that they can then have the authorization to get scripted for a drug that can help them. So a lot of it is driving the disease awareness, driving the PH incidents within the ILD population. So there's sort of an expectation that it's actually there rather than not there.

And then finally, either they're going to learn to treat or they're going to learn to refer and what the best referral network is for them. So that's what we're doing. And that's, as Scott said, one of the reasons we scaled the sales force significantly.

And our next question comes from the line of Gaurav Maini from LifeSci Capital.

Philip Aker jumping in for Gaurav today. I guess any more color you can give on the potential expansion opportunity for YUTREPIA in [indiscernible]. Of course, this is a pretty wide open indication, but any color here on how the team is thinking about this would be helpful.

Yes, I'll start. So we think there's a clear opportunity here. And I think part of what will drive the value of sort of capturing that opportunity is doing a study that is enriched, if you will, for success. So we're at ATS, for example, we're going to have steering committee meetings with the luminaires in the space to talk about kind of if we're going to study this disease, what is the best sample of patients to study -- and I think if we get that right, we all know that treprostinil will improve the pH component of disease and that can -- that obviously would benefit the outcome of patients with COPD.

So I think that's where we're going to focus our time and attention on is making sure we get the inclusion, exclusion criteria, right? We've been -- will do a protocol that's with all our experience that we think will be enriched for success, and then we'll take it to goal. So that's kind of where we are with that program. So it's -- it won't get going until '27 at best. So I think more to come on that, but I appreciate the question. It's a massive opportunity in excess of $4 billion or more on its own.

This does conclude the question-and-answer session of today's program. I'd like to hand the program back to Dr. Roger Jeffs for any further remarks.

Yes. Thank you, operator, and thank you, everybody, for joining us. I think I'd just leave you with we're really excited about where the business is headed. I think we're going to focus on 4 key areas. One is the continued success in the launch of YUTREPIA in its growth. doing market support studies to cement our position for YUTREPIA the anchoring precacyclin in the market, both for transitions from inhaled and oral looking at synergies with [indiscernible]. We're also going to focus on L606 advancement and get that to goal as soon as we can. And then as we just answered the question around evolving broader indications, such as IPF, PPF, PCPD and Raynaud's, so that we can expand this business by multiples and not present. So again, thank you, everyone, for your time and attention today. We look forward to speaking to you at conferences in the coming future.

Thank you, ladies and gentlemen, for your participation in today's conference. This does conclude the program. You may now disconnect. Good day.

Good morning, and welcome to the Liquidia Corporation Full Year 2025 Financial Results and Corporate Update Conference Call. My name is Josh, and I will be your operator today. [Operator Instructions] Please note that today's call is being recorded.

I'll now turn the call over to Jason Adair, Chief Business Officer.

Thank you, and good morning, everyone. It's my pleasure to welcome you to our full year 2025 financial results and corporate update call. Joining me today are Dr. Roger Jeffs, Chief Executive Officer; Michael Kaseta, Chief Operating Officer and Chief Financial Officer; Dr. Rajeev Saggar, Chief Medical Officer; Scott Moomaw, Chief Commercial Officer; and Rusty Shundler, our General Counsel.

Before we begin, please note that today's discussion will include forward-looking statements, including statements regarding future results, product performance and ongoing clinical or commercial activities. These statements are subject to risks and uncertainties that may cause actual results to differ materially. For further information, please refer to our filings with the SEC available on our website.

Please also note that our earnings release and our commentary includes non-GAAP financial measures. Reconciliations of these non-GAAP financial measures to the most comparable GAAP measures can be found in our earnings release.

With that, I'll turn the call over to Roger. Roger?

Thanks, Jason, and good morning, everyone. As we look back on 2025 and forward into 2026, what stands out is the rapid establishment of our preferred product profile paired with precise execution. Last year demonstrated that Liquidia could launch, scale and reach profitability quickly within only 120 days of launch, in fact. Most importantly, we demonstrated that physicians were willing to rapidly change prescribing behavior when presented with a new differentiated option in YUTREPIA. The benefits of its product profile, deep-lung delivery, low-effort device and wide dose range are taking hold in clinical practice and help place YUTREPIA as one of the top specialty drug launches over the past 5 years across all therapeutic categories. This did not happen by chance, but with purpose as a category defining the SENSE study data clearly set a new data-driven standard for therapeutic success.

The momentum of 2025 has clearly carried into 2026. As of February 28, we have received more than 3,600 unique patient referrals and shipped therapy for more than 2,900 patients since launch, maintaining our robust trajectory. While others have observed stagnation from supposed seasonality, that has not been our initial experience as we continue on the same tour trajectory without decline which would suggest that our percent market share is rising and that we are capturing a disproportionate number of new patient starts for inhaled prostacyclins as the best-in-class option. This steady forward momentum is being achieved across PAH and PH-ILD, with new patient prescriptions roughly equal now between the two indications. Patient starts remain at 75% naive to 25% transitions from other prostacyclins.

Importantly, breadth and depth are also improving in a measurable way. We have increased total prescribers to around 860 as centers gain confidence and usage expands in the community. A key indicator of that depth is that roughly 25% of physicians have already referred 5 or more patients which is exactly the pattern you want to see when the therapy evolves in becoming the standard of choice rather than an initial trial.

If 2025 started the full commercial phase, 2026 begins the full clinical exploration of what may be possible with YUTREPIA and L606. Our development strategy is built on principles we have understood for a long time with prostacyclin. Exposure drives efficacy, tolerability drives durability and convenience drives compliance. Each of these elements is critical to the totality of therapeutic experience and speaks to the high bar that YUTREPIA has quickly established around safety, efficacy and convenience.

This year, we will look to further cement this best-in-class product profile via the initiation of multiple new studies, including studies that will transition patients from oral and inhaled prostacyclin therapies and a study of new combinations like adjunctive studies with sotatercept that we hope will further advance the changing standard of care.

Further, we will work to initiate new studies to support expansion into additional disease areas such as systemic sclerosis-associated Raynaud's phenomenon and PH-COPD, where high unmet addressable need remains. And of course, we will look to move the therapeutic needle even further via the advancement of our next-generation L606 pivotal study with the study initiated in multiple territories and enrollment expected to begin in the following quarters. Importantly, this disciplined expansion of clinical evidence will be funded by cash flow from operations and will help grow the value of the franchise and the company.

With that, I will turn it over to Mike.

Thank you, Roger, and good morning, everyone. Our financial results are a direct reflection of two things: sustained patient growth and retention and disciplined execution. Over the last 9 months, as the referral and start curves have moved higher so have revenue, margin contribution and cash generation. For the full year 2025, YUTREPIA generated $148.3 million in net product sales including $90.1 million in the fourth quarter, representing 74% growth in net product sales over the third quarter, 2025. The fourth quarter also marked our second consecutive quarter of increasing profitability with not only non-GAAP adjusted EBITDA of $27.3 million but also $14.6 million of net income. We ended the year with approximately $190.7 million in cash and cash equivalents, having generated $33 million of positive cash flow in the fourth quarter alone. Liquidia is now operating as a cash-generating growth engine. That is not aspirational, it is visible in the quarterly numbers and on the balance sheet.

Roger, back to you.

Thanks, Mike. We're confident in 2026 and the years ahead as we focus on building a durable franchise with increasing patient preference and a clear path towards at least a $1 billion franchise in 2027 with increasing growth in the years beyond.

With that, operator, please open the line for questions.

[Operator Instructions] Our first question comes from Ryan Deschner with Raymond James.

Congratulations on the impressive continued launch so far for YUTREPIA. Curious, given the greater than 2,900 patients starts you're reporting today, where do you think this puts you in terms of current market share? And how are you thinking about continued growth in the first half of 2026? And then I have a follow-up.

Yes. Thanks, Ryan. I appreciate you joining the call this morning. So it's hard to give an accurate percent market share from a patient number standpoint, given the competitor that doesn't disclose their numbers. So what we have done is talked about -- we've done an analysis based on revenue that maybe, Mike, if you don't mind going through, that speaks to this question.

Yes. Thanks, Roger, and thanks, Ryan, for the question. So to give everyone an idea, inhaled treprostinil revenue for Q4 was approximately $550 million. And as Roger said, despite what our competitors have talked about with seasonality in Q4 in their business and their corresponding decrease in revenue from Q3, that's still an increase of 5% revenue from Q3 of 2025. The fact that we had an 80% increase in revenue quarter-over-quarter means that we're accounting for more than 100% of market growth in Q4. And again, as Roger have said, that represents a disproportionate share of new patient starts, along with a fair share of switches from Tyvaso.

In terms of what that share is in Q3, we had about -- from a revenue point of view, 10% of market revenue that increased to 17% in Q4. So we're seeing a significant increase quarter-over-quarter. As Roger mentioned, the 2,900 patients starts in just 9 months since launch, that is through February 28. So we're seeing that continued momentum that we've seen in Q4 the first 2/3 of Q1 of 2026 and feel very excited and bullish on our ability to continue a successful launch.

And Ryan, just to add, I don't -- it's been very consistent in terms of trajectory, and we don't see any impediment going forward this year with regard to any change in that trajectory. As we mentioned in the prepared remarks, the depth of prescriptions is increasing. We're working on improving the duration and durability so that scripts back upon scripts so that the revenue growth remains. And I believe you had another question, Ryan?

Yes, thanks for that. With the new [ outcomes ] data from a competitor that came out recently, what's your take on the potential impact of a new addition to the oral prostacyclin receptor agonist mix on the YUTREPIA launch [indiscernible]?

Yes. I mean it's a good question then. First of all, we'll congratulate therapeutics on a successful trial with a IP1 selective agonist, I think for us, it really doesn't have any impact at all. If you look at it, it's more like UPTRAVI than not. I mean, they're both in the nanomolar range. I think potency-wise, they're generally similar. Their target binding profile is highly selective just to the IP1 agonist, and I think the results are similar. You're seeing an effect long term over years in clinical worsening with a very muted effect on symptom oncology which primarily if you look at the 6-minute walk distance, which they didn't disclose, they said it was significant. But my guess is it's muted. And as you know, with UPTRAVI, they had no statistical significance or [ clinical significant ] change in 6-minute walk distance.

In these patients -- when you're talking about a first edition of prostacyclin, the patients are symptomatic and looking for improvement. So I don't think like the oral therapies just aren't going to give that bang for the buck. What they are going to bring is the GI. And if you look at the AE profile that was shown, you could see a high degree of GI side defects, diarrhea, emesis and nausea.

So I think it's more of the same and all the results that Mike just talked about in terms of our launch trajectory and success, are in the presence of UPTRAVI being in the market. So it's really -- to me, it's really an interchange between how that -- how ralinepag will compete with UPTRAVI in the marketplace once it's launched. So not that concerning.

I think also if you look at their box and whisker plot, while they did have success across a lot of different subgroups, one thing that was not differentiated was dose. So it doesn't seem like there's an ability to dose a better outcome there. So what you see is what you get based on probably close to the initial start dose. So again, more of the same, and I don't think it will be impactful in any way in terms of how we view our business.

Our next question comes from Julian Harrison with BTIG.

Congrats on the progress. Roger, I'm sure you're very familiar with soft mist inhalers, can you help us better understand the differentiation potentially of YUTREPIA, maybe L606 as well relative to a softness inhaler that was recently announced by another company in the space?

And then as a follow-up, regarding the PAH versus PH-ILD split of patients on YUTREPIA, should we still be thinking about that on approximately a 3:1 basis? How do you see that maybe evolving over time?

Yes. I'll answer the and maybe ask Scott to help me with the second question first. So we've moved to a pretty equal split now between PAH and PH-ILD. There's clearly more white space opportunity in PH-ILD. And I think as we -- one of the things we're doing is we're going to grow our sales force significantly by 1/3. So we're going to have a larger share of voice. And the purpose of that larger share of voice is to get into the community, particularly into the PH-ILD space to continue to penetrate that market, drive awareness and either drive starts to drive referrals. So I think over time, that should become an increasing value proposition. But in PAH, don't forget, we have not only the inhaled market opportunity, but we're also going after the oral and parenteral opportunity. So on aggregate revenue numbers, they may appear similar in terms of the business opportunity. But in pure patient numbers, I think PH-ILD has the opportunity to be more successful.

Scott, do you have any other questions or any other responses that you'd like to add?

No -- I would completely just agree with everything Roger said. It's been interesting to see PAH get off to a fast start. But as we mentioned, PH-ILD has come on strong and about half where it's going to go from here. I think PH-ILD, we know PH-ILD is definitely the bigger opportunity long term, as Roger called it the white space. but there's still a load of opportunity in PAH. So where it will settle out eventually. I think PH-ILD definitely will be bigger, but there's a lot of growth in both buckets right now to continue in the near term.

Yes. Great. Thanks, Scott. So again, Julian, there's multibillion dollar opportunities in each indication. So we're excited about the opportunity that YUTREPIA and subsequently L606 will have in these markets.

With regard to the SMI, I know it's a seminal question for everybody in sort of front of mind because there were some pretty hyperbolic comments made about it. What I would say is I think their commentary in general was -- it sounded very much to me that it was validating YUTREPIA because it sounds like they're trying to develop product that has the product profile of YUTREPIA. So -- and what is that? It's an easy-to-use low-resistance device with high portability. There's mitigation of cough. But for us, it's specifically done view of the print formulation of engineered particles in the lower end of the respirable range. And then dosing flexibility due to that tolerance which then parlays as we've clearly shown in the ASCENT study that we can rapidly and aggressively dose patients to 2 or 4x the past standard with absolutely no exacerbation in cough in a population of PH-ILD patients who have a baseline cough and a high predilection for exacerbation of cough when they take inhalation therapy.

So YUTREPIA is putting an ideal product profile. What Mike described is we're clearly getting the lot, if not most, of the NRx share, and our TRx share is catching up over time. And the SMI to me is just -- it's a repurposed opportunity. So if you go back to the 793 patent that has a priority date of 2006, and look at example one in particular, it talks about there a single-dose acute administration of treprostinil using an SMI. And in that same patent, there's a single acute dose with the ultrasonic nebulizers that is Tyvaso as we know it today. And what that showed is that in PAH patients with a single dose, low dose, that cough was prevalent, and it describes the MMAD or the median diameter of those particles to be in the 4 to 5-micron range. So nothing different.

So you're giving Tyvaso solution. You're not doing anything to improve its tolerability or penetration to the lower airway, you're just using a different way to present an aerosolized mist. So it doesn't really matter if you use a soft mist inhaler, yes, that's probably better from a portability standpoint, but that will be it, it will still present itself clinically in terms of how it behaves as Tyvaso nebulized. So we don't really view it as competitive. I think you'd have to ask the competitors to explain the comments they made around tolerability, they've said they still have to do bioequivalent.

So whatever data they have, my guess is it's just single-dose acute studies in normal volunteers which is a very bad proxy for what may happen in patients with a high predilection of cough. And the truth to that statement is, remember, when they launched Tyvaso DPI, they had no data in patients that was done on bioequivalence in PH-ILD. And you've seeing the issues they've had through the National Jewish state, in particular, with the DPI and PH-ILD. And now it seems like they've capitulated and feel that DPIs are now not useful, at least their DPI and they're trying to pivot to another methodology, but I don't see that methodology as providing any forward-looking benefit. So that's kind of my quick view on it.

I know, Rajeev, you have some broader statements around perspective because this has been tried before in other markets. And if I could, I'd ask you to speak to those instances, if you will.

Yes, sure. Thanks, Roger. So I think I just want to highlight some key points here. I think the signature of the SMI was primarily derived from the Spiriva Respimat and that was done at a time when the CFC propellants were being removed. And also, there was a patent issue from that company, and they compared it to Spiriva HandiHaler, which is the dry powder formulation. And at that time, the HandiHaler was the highest resistance device ever to be developed in patients with asthma and COPD, which is tens of millions of patients. The only device that has a higher resistance than the HandiHaler to date is actually the Tyvaso DPI device that's used in PAH and PH-ILD.

But what's really interesting is with all the studies done comparing the softness inhaler to a dry powder inhaler using the same formulation in this regard with tiotropium, the SMI has never been shown to change the clinical efficacy, the pharmacokinetics and most importantly, who's never been shown to improve or modify safety and/or tolerability inclusive of the concerns for cost. So I just want to highlight as what Roger spoke to that the SMI does not port any substantial benefit besides the portability itself.

Our next question comes from Amy Li with Jefferies.

Congrats on the momentum. So when we look at your path to the $1 billion revenue target in 2027 that you laid out, our math suggests that implies sustained patient adds from here. So is that the right way to think about the trajectory? And more importantly, what gives you confidence in maintaining your current pace in the next couple of years? How much visibility do you have into the patient funnel and where the patient is coming from? And then how -- and are you still confident in that number in light of kind of the potential emerging competitive dynamics like SMI?

So I'll ask Mike to speak to some of -- how we get there, at least from a revenue calculation standpoint. But as we just said, Amy, we don't see any influence from the SMI. I think it's -- again, it's going to be Tyvaso and perhaps a more portable format from using jet nozzles to create aerosolized particles. But as I said, they're going to be poly dispersed, they're going to cause cough, they're going to have titration issues. So I don't really see that impacting us in any other way. And as you're noting in the competitors' revenues, the nebulized business is decreasing, mostly because we're beginning to take that share away. So I think more of that will continue to happen.

Mike, do you want to talk about kind of how we see our sales continuing decline amounting towards greater -- at least $1 billion in revenue in 2027?

Yes, Amy, thanks for the question. I mean if you just look at -- start with what I talked about earlier. The market for the quarter was over [ $500 million ], which means it's about -- it's already on -- the inhaled treprostinil market is already a $2 billion market. You then talk about -- our share of that revenue has increased considerably quarter-over-quarter. We believe that will continue as well. Then you look at the opportunity that we talked about in PAH with the $2 billion oral opportunity where we believe that there will be significant opportunity for us to gain significant share from that. So that's another $2 billion opportunity just within PAH that we see.

And then as Scott and Roger had said earlier, we're just scratching the surface in PH-ILD. We're enhancing our sales force. We're getting more penetration. We're getting further into the community. So when you look at the overall opportunity, our current $2 billion market opportunity in inhaled treprostinil plus the oral opportunity plus the enhanced white space in PH-ILD, we feel very bullish in our ability to continue on this trajectory and continue on this path to get us to what -- as Roger had said at JPM, YUTREPIA being a $1 billion product in 2027.

Yes. I think the other thing, Amy, too -- great response, Mike, is, look, we're doing directed studies that we're going to transition patients from the competitive agents, either oral or inhaled and show the benefits of moving those patients to direct tolerability and efficacy. So all of these things just will continue to build a portfolio and a suite of evidence and data-driven proof that YUTREPIA is the best-in-class and first in choice product.

Our next question comes from Serge Belanger with Needham.

First question on the legal front. Any new updates or developments that you can share with us? And then secondly, regarding payer access, I think you reported another 85% prescription to patient start conversion. Just curious how that number varies across the Medicare and Commercial segment. And I guess, what additional coverage work is required. I know you had coverage from three major commercial payers, but what additional payers need to come online over the remainder of 2026?

Sure. Thanks for the question. So I'll take the legal and then I'll pass it to Mike for payer. So really nothing new from what we said at JPMorgan, Serge, so just a reminder for those who may be newer to the story, that the oral hearing was in June, post-trial briefings were completed in August. So we're now approaching 9 months from trial and 7 months from the post-trial briefing. So we do think we're in the sweet spot for when an opinion should and could be rendered. But obviously, it's been taking longer than we all expected. So we can't really probabilitize on when it actually will come down.

What I would say is we remain very confident in the arguments that we made and we strongly believe that we should win. And the case should read out favorably to us. We acknowledge there's a lot of potential options here or outcomes. But regardless of what happens, we're prepared for any and all outcomes. So really nothing new to state today other than we remain confident in our position and look forward to hearing from the judge in due time.

So Mike, if you'll talk to payer access, please.

Yes. So it's great to hear from you. I think where we are with payer and pull-through is just another example of how we've executed on this launch. Scott and his team have done a masterful job, the fact that we are at -- we've maintained 85% plus of pull-through from really the very early stages of the launch is just simply staggering. And we continue on that pace. We've also said from the beginning of the launch was our goal was to make sure that patients have a choice if they want to use YUTREPIA and what we can say is we've achieved that. And we continue to work through our pull-through, making sure that we provide a suite of services to patients to make sure that if they want YUTREPIA, they can get it. And I think that's evident in that pull-through percentage, and we don't see any change in that coming. And our goal will always be to improve that as we move forward. But I really think we're already in a best-in-class state being at 85-plus percent pull-through percentage.

Our next question comes from Ben Burnett with Wells Fargo.

Congrats on all the progress. I just wanted to see if I could get a little bit of color on some of the launch dynamics into the first quarter. Anything you can say kind of around inventory stocking trends or kind of the refill rate that you're seeing?

Yes, Mike, if you wouldn't mind commenting on that?

Yes, Ben, thanks for the question. As we said in our press release, and Roger reiterated already, we've already had a strong January and February when it comes to both new patient starts and referrals. We're staying on the exact same trajectory we were on in Q4. We've often gotten questions from analysts and from comments from our competitors about seasonality. We've seen nothing but increases across the board. And as we showed today, we continue to see those increases.

So as we've always said, as Roger had said, we are still very confident as we move through the rest of Q1 into Q2 and are on our path to be a $1 billion product in 2027.

Now as it relates to inventory and stocking, I think we're now at the point of the launch 9 months in, where we've really normalized and I don't expect there to be any significant swings now. Specialty distributors can make decisions that ended up quarters that we don't have influence over. But at the end of the day, we are tracking well. Our demand is extremely strong. And as a result, we feel very confident in the revenue as we move forward.

Okay. That's extremely helpful. And I guess just also regarding the systemic sclerosis RP program. I thought that was interesting. Could you maybe walk us through kind of the evidence in support of treprostinil and kind of what your path forward is there?

Yes, I'd love to. So Rajeev, if you wouldn't mind talking about the Raynaud's program?

Yes, sure. Thanks for the question. So obviously, systemic sclerosis is a rare condition overall. And obviously, by the nature of their -- the actual topic of systemic means they have multiple disorders affecting multiple organ dysfunctions inclusive of the most deadly, which is and PAH and PH-ILD. And despite that, their single most complaint of what drives their quality of life is the problem that occurs with Raynaud's phenomenon, which occurs in at least -- and it's debatable, but somewhere between 90% to 95% of all patients with systemic sclerosis or scleroderma.

The reason why we think we have good rationale is that actually many of the drugs that have been approved for pulmonary hypotension have been studied, specifically on the -- and the complication of Raynaud's phenomenon, which is known as digital ulcers inclusive of prostacyclins. In fact, in the European and the U.S. guidelines for the management of Raynaud's phenomenon, iloprost and/or Flolan is used as salvage therapy in the event that patients are recalcitrant to treatments such as calcium channel blockers and/or even PD5 inhibitors, which is used off label. So that just shows that the prostacyclin class in and of itself is able to prevent worsening of ischemic episodes. They're potentially leading to avoiding issues of gangrene and/or amputation of these digits that's affecting these patients.

One of the challenges oral treprostinil was studied in condition, again, to try to modify the digital ulcers. The problem with that was the trial was fraught with tolerability issues and patients coming off because of the intolerability of oral treprostinil, Again, highlighting that if we can provide YUTREPIA for these patients, we know that the tolerability profile of inhaled treprostinil has significantly improved. We can also -- we also know from our data that we can dose to a significantly high level, ensuring that we obtain appropriate pharmacokinetic profile to modify the disease and so we look forward to initiating our Phase IIa program in systemic sclerosis RP here in -- near the end of the year.

Our next question comes from Jason Gerberry with Bank of America.

Two for me. Just first on PAH, I wanted to just get your view on sort of the role for an inhaled treprostinil in the PAH setting. It's a bit confusing. And so -- on the one hand, your competitor flagged that maybe inhalation approaches are going to see a diminished role in PAH. And then when we talk to KOLs, what they're saying is they're not putting new starts on UPTRAVI but yet when we look at IQVIA data, the UPTRAVI NRx look pretty stable. So there's a lot of conflicting data points in this, and it's a dynamic space. Winrevair is now getting used more in newly diagnosed PAH. So how do you see this dynamic where the role of, say, oral versus an inhaled prostacyclins in PAH?

And then my second question for Mike, just when I look at fourth quarter numbers, it looks like really good revenue recognition per patient to take the average -- the 3Q number versus the 4Q number over sales or under sales, I should say. So when we look ahead to 2026, it doesn't seem like that there's going to be a huge gross to net adjustment in the numbers relative to the patients and the revenue capture, but wanted to get your perspective there.

Yes. Thanks for the question, Jason. So I'll speak to the PAH issue in terms of oral versus inhaled. And I think the field is moving. The paradigm is shifting to where patients aren't going to be willing to accept off-target effects any longer. And because the burden of those off-target effects can be as bad as the burden of the disease in terms of impact on daily living. So the orals, clearly, if you look at the frequency of AEs related to the GI toxicities, they're significant, and they occur daily, they occur over hours in the day and if you then pair that with minimal symptomatic benefit to the disease, that benefit to risk exchange is not a good negotiation for the patient. So I think going forward, particularly as we continue to evolve data around the ability of YUTREPIA to dose titrate drive effect and really eradicate off target effects to the GI or from parenteral issues related to septicemia and subcutaneous site pain and irritation. There really -- there's -- nobody would be willing to make a trade-off because now you can get the symptomatic benefit without sacrificing your daily living through these off-target effects. So I do think -- and our competitors said it when they spoke about their SMIs, like the people are tired now of off-target effects and their people -- what you want to see is a better benefit to risk profile, which YUTREPIA provides. And then it is a 4 times a day therapy, so that would be the only sort of negative there. We're going to negate that negative with L606. So the imports of that studies will achieve in a different way through liposomal encapsulation, all the benefits of YUTREPIA but then now we'll do it in a twice-a-day format and it will also minimize peak-to-trough excursions so that trough benefit is steady to the peak benefit. So what we're trying to do at this company is really improve patient outcome, have patients feel better, remove these off-target effects and then get them to a point in time where they can take an easy portable therapy without risk. So I think we're well on our way to doing that. I think clearly, YUTREPIA's become the preferred inhaled. And as we continue to sort of cannibalize share from orals, you'll see more and more of that. So again, very excited [indiscernible] across the board. And I think that's it for the PAH to oral.

So maybe, Mike, if you can talk about the fourth quarter dynamics?

Yes, Jason, thanks for the question. So as we look at our growth to net from 2025 to 2026. As we had said in previous quarters, working on access in the back half of the year, we had some new to market blocks that had existed on the commercial front. Those were slowly removed. The result of that is going to be twofold. One, we will pay more rebates on more of our business as we move forward in 2026. But that will be offset by having more patients having access.

So what I would say is, as we have kept saying we are extremely confident in our trajectory as we move into '26 and into '27 but what I would say is maybe there'll be a very small incremental increase in our gross to net, but that is -- it goes to our goal of making sure patients have choice and patients have access. So we will have achieved that goal. And I think we'll sit at a place where we're very comfortable and can still achieve our goals in 2026. And as we've said, being a $1 billion product in 2027.

Operator, I think we have time for one more question.

Our next question comes from Gaurav Maini with LifeSci Capital.

Congrats on a great print and continued strong launch of YUTREPIA. Just two for me, if that's okay. Can the team give some color on that one in four prostacyclin transition patients and kind of what bucket of prostacyclin therapy, i.e., oral versus inhaled, these patients are coming from? And then secondly, on the new exploratory YUTREPIA trials, can you just describe how these are expected or if they are, I guess, to be label enhancing?

Yes. So maybe I'll ask Scott to talk about sort of how the transition market, kind of the demographics of that and then Rajeev, if you will speak to the benefits of the trials that we're doing. So Scott?

Sure. So as we've said, you alluded to, we've said that 75% of the patients are new to prostacyclin and then 25% are switch. Obviously, in PH-ILD, there aren't other options. So it's -- those switches are coming from inhaled. In PAH, what we said is that about 30% of the 25% in PAH are coming from the orals. And then the bulk of those are coming -- the rest of those are coming from inhaled. Now we are starting to see more patients transition off of parenterals on to YUTREPIA, I don't think that's going to necessarily become material in terms of the switches, but it is interesting and shows that in the future, we'll probably kind of encroach on the parenteral space. But when I'm out there in the market, I can tell you that the enthusiasm around using YUTREPIA instead of the oral prostacyclins for all the reasons Roger elucidated earlier, is only growing. And so we think that whether they're switching the patient off of an oral prostacyclin or they're using YUTREPIA instead of an oral prostacyclin, again, I think there is a big opportunity there for us.

Thank you, Scott. So Rajeev, if you'll speak to the trials, please.

Yes. Thanks for the question. So listen, I firmly believe we're entering into a decade and beyond of inhaled renaissance here in PAH and in PH-ILD. And I think YUTREPIA is leading the charge today, and L606 is going to definitely beat it tomorrow. In that regard, the trials that we are purposely conducting is defining how to switch from the oral prostanoid to YUTREPIA.

I think we highlighted a few things on this call. Number one, it is very clear that practitioners across the board are very interested in delivering the most tolerable drug. I think this has been highlighted by the addition of sotatercept to the armamentarium, which has, I think, completely negated and limited the utility of parenteral therapies at this time. We have several large anecdotal cases of YUTREPIA being used acutely in the hospital and to combine that also with sotatercept to maximize the benefit of that combination.

In regards to oral prostanoids, we plan to switch studies from selexipag to YUTREPIA. It would detail to the practitioners how to do that effectively and safely. And also, again, the advantage of YUTREPIA is that we can dose 2 to 4x that typically what is used traditionally by Tyvaso. In those studies, we'll also highlight some of the hemodynamic capacity of YUTREPIA, which I think would be very exciting.

In regards to label enhancing, I think we reserve the right to always present our data to the agency for consideration for label discussions in that regard.

And then finally, I think we've highlighted just -- to highlight again the sotatercept study. The purpose of this study is to transition patients that are on sotatercept in combination with either forms of prostanoid inclusive of parenteral and/or oral and transition those off those therapies safely and effectively to YUTREPIA. So those are the studies that we are keenly and working across to initiate this year.

Thank you, Rajeev there. Well said both from you and Scott. So I'll close by just saying as you can hear, Liquidia is all-in for our patients and trying to provide better and better opportunities, both now and in the future. And we look forward to speaking with everyone again in May when we update you on our Q1 outcome. Thank you, everyone.

Thank you. This concludes the conference. Thank you for your participation. You may now disconnect.

Hello, everyone. My name is Ben Davis. I'm an associate with the JPMorgan Healthcare Investment Banking team, and I hope you're all enjoying your third day of the 2026 JPMorgan Healthcare Conference. It's my privilege to introduce Liquidia team. CEO, Roger Jeffs, will be presenting. Afterwards, he'll be joined by CFO, Michael Kaseta, on stage for a Q&A at the end.

Great. Thank you, Ben, and thank you for all of you here today. Also, thank you to those online who are listening in. I'm going to give the corporate overview really to give you a sense of kind of how we did in 2025. As a preview to that, we had a spectacular year, and also then give you a look into the future, kind of where we're headed above and beyond where we are today.

Also, I want to say that I'm joined here today with Rusty Schundler, our General Counsel; Scott Moomaw, our Chief Commercial Officer; Jason Adair, our Chief Business Officer; and Rajeev Saggar, our Chief Medical Officer. Usual forward-looking statements, and I'll refer you to our SEC filings for the true risks and uncertainties.

So for those of you who may be new to the story, Liquidia is a biopharmaceutical company driven by science and passion with patients as our North Star. And our purpose is to improve inhaled drug delivery to by employing proprietary and better formulations to focus on particularly the prostacyclin class of therapeutics to change and improve the standard of care for patients with high unmet need.

What really centers us today in terms of success is the 3 Ps, the product, YUTREPIA, which is based on a proprietary PRINT platform. It was FDA approved in May '23 of '25 for PAH and PH-ILD, and it was launched and provided to patients within 1 week of approval, which at that point in time, we think was a record.

We have a robust pipeline that supports and leverages the strength that we're building. L606 is a liposomal treprostinil inhaled suspension that provides extended release.

We think, as I'll show you some data that will convince you, that it also has a potential for a better safety profile, which will allow us to dose to better effect. And it's also in a 2 times a day regimen versus current day therapies, which are 4 times a day. And it uses a rapid and portable modern-day [ mesgen ] nebulizer that's graft actuated.

I'll update you today on progress. We have a number of new clinical studies that will fortify our position, which is what we feel with YUTREPIA is the leading and emerging leader in the inhaled treprostinil space.

We're going to do studies that are going to treat inadequate responders to patients on other therapies, both inhaled Tyvaso as well as oral therapies like Uptravi and Orenitram, and explore the broader renaissance indications that are now available to us in IPF, PPF, PH-COPD and scleroderma-associated Raynaud phenomenon.

So in terms of '25, how did we do? Again, it was an outstanding year for Liquidia. We achieved profitability in our very first quarter of launch, which I think puts us in very rare air for a biotech company in its first quarter of full sales.

For the year, $148.3 million. And you can see that grew from third quarter '25 from $51.7 million to $90.1 million of net product sales, a 75% growth Q-over-Q. The result of that growth was that we provided $30 million plus to our bottom line in terms of positive cash flow and fortifying the balance sheet.

Maybe spend a little bit of time again for those who may be newer to the story that PH and PH-ILD are massive market opportunities today and with room to grow. So if you look at on the left-hand panel, the prostacyclin market. This shows PAH and PH-ILD. There's inhaled $1.7 billion in annual revenue. Oral is almost $2 billion in annualized revenue and the parenteral IV subcu business is about $572 million.

So in aggregate, $4.3 billion in net sales as it exists today. The treprostinil-based therapies represent about 62% of that or $2.7 billion.

There still remain many, many more patients to be addressed, who have continuing unmet need. In PAH, and these are estimates, this is not meant to be particularly precise, but about 4,000 patients on inhaled, 10,000 patients on oral and 4,000 patients on IV subcu.

PH-ILD, a much different story. A newer indication only first approved for inhaled treprostinil in 2021, but 6,000 patients on inhaled with, we feel 54,000 or more prevalent and untreated patients. So that is marginally penetrated. And these are numbers from before YUTREPIA launch with a lot of upside and room to penetrate and grow these markets and capture share within these markets.

So here's our own product momentum, which, again, I think you'll view as outstanding and almost a linear escape velocity from day 1. So we launched in June and here's to 12/31. So launch to date, 2,800 new prescriptions or referrals, we'll call them both of that; about 2,300 new patient starts.

And our conversion rate from referral to start is about 85% if you look at trailing average. That's unheard of for a new product launch where you face new-to-market blocks and other impediments in the early phases of launch. But you can see there's been a robust uptake for this therapy, even amongst the payers.

So kind of a little bit of demographics on the right, where are these patients coming from? 3 out of 4 patients are starting YUTREPIA are new to prostacyclin therapy, so they've never had a background prostacyclin therapy. And 1 in 4 are transitioning from other prostacyclin therapies. So 25% transition, 75% new. So we think we are displacing other therapies in terms of being the prostacyclin of first choice. And obviously, 25% of our starts are representing that we're also taking share from existing therapies.

One thing of note, we're not just taking it from the inhaled market in PAH. So in PAH only, there are oral therapy approvals, Orenitram and Uptravi.

And you can see 30% of our 25% of switches is from the oral therapies. And this was a bit of a self-directed plan. It happened somewhat organically in the field. It wasn't something that we were pushing for in this initial period of launch. So very pleased that the product is so well received. It's being used beyond even where we're targeting our marketing efforts.

So two things that will help us in the future. One is to drive depth of prescriptions and increase [ breadth ] of target prescribers. Most of our scripts today still remain in the PAH space versus PH-ILD. While there's a lot of room to grow in PH-ILD, prostacyclins have been used in PAH for over 30 years.

So there's a lot of rapid adoption in the PAH community for a newer and better prostacyclin, and that's why you see the predominance of our scripts are coming from the PAH arena so far. But certainly, going forward and into the future, I think PH-ILD has a rapid chance to catch up.

So if you see in the upper left-hand panel, most of the prescriptions are from the major centers, 24% are from the community, 76% from the centers. That's purposeful. We targeted the centers of excellence and the KOLs because we want to drive awareness among these big centers and have them be advocates for YUTREPIA.

And I think as you've seen from the script and start rate, we're doing a very good job of that. Pulmonologists have written more prescriptions, not surprising, given it's an inhaled therapy. 63% of our scripts are from pulmonologists, about 30% from cardiologists, and the rest are from probably rheumatologists who treat scleroderma patients who have associated pulmonary hypertension.

The interesting thing on depth is we're achieving not just breadth, so we have 750 prescribers launched to date. But within those -- that prescriber base, our average script rate is about 4 scripts per prescriber on average or 3.8 prescriptions per prescriber. We have 24% who've had actually had 5 or more -- 34%, 2 to 4 and 42% with 1.

What we've seen is a bit of a, what we'll call it, a tipping point number of prescriptions. Once we can get the center to 3 to 5 scripts, they have a threshold moment where they then begin to see the true product differentiation. They see the expressed difference in tolerability and the ability to titrate and get to dose in effect, and they then tell us that they're going to port their entire patient base to YUTREPIA. So depth is critical among these major centers, and it's a focus of our commercial team in the new year.

We are planning a number of additional high-impact studies to continue to build upon this product profile and its differentiated characteristics. And we do this without fear, and we're going to do it with a very purposeful manner.

So in PH-ILD, last year at this conference, we spoke about the ASCENT data for the first time. That study remains ongoing. And what we've shown in that study, and I'll show you the data specifically in a minute, that it confirms the tolerability, titratability and 6-minute walk improvement as it relates to dose escalation in PH-ILD patients. That's a 52-week study. That study will terminate in Q1 of 2026, and we're going to present the 24-week data at the PVRI conference in January.

The new studies for us are PH-ILD study. We're going to take patients on Tyvaso DPI and transition them directly to YUTREPIA. So that's a bold study. We'll take patients that are underserved on that product, so they can't get to dose, they can't get to effect. We'll move them to YUTREPIA, and I'm confident that we'll show that we can improve that patient's profile and response rate with YUTREPIA.

The other study we'll do because as you heard, we're getting organic scripts from the oral transition -- the oral market. We're going to go ahead and do a study so that we have data to show the benefits of that and inform the community on how to best transition patients from oral to YUTREPIA.

It's an open-label study. First patient in will be mid-'26. And again, same thing. We're going to take patients that are intolerant due to the significant GI side effects that those patients have, move them to YUTREPIA and show that we can benefit those patients as well. And I think once we have that data in hand, it will be the first time a company is counter detailed an oral and try to displace that share. And I think we can do that in a very effective way.

The other study that's of interest is a PAH sotatercept combination study, which we will initiate in the second half of '26. That's an investigator-initiated study. There's emerging medical literature on the fact that there are highly complementary mechanisms between sotatercept and prostacyclins.

So one thing that happens with sotatercept, very effective drug, patients are getting better. But one thing that happens in concert with sotatercept's administration on top of a prostacyclin is it's exacerbating the prostacyclin side effects that exist, so more headache, nausea and things like that. So those are systemic side effects.

So -- and mechanistically, what that drug does is it reduces RV after load, decreases RV contractility, but does nothing to cardiac index or cardiac output. What prostacyclins will do is that they also can improve RV contractility, but we can improve the cardiac output. So we're an inotrope. So in addition to helping with the pressures, we can help with the function of the right ventricle. So these 2 drugs should work well together.

What we have had occur in the field is when sotatercept has been started, those patients have improved to the point where patients and physicians wanted to remove the systemic prostacyclin, either oral or parenteral, because it was having exacerbating side effects.

When they try to withdraw those therapies, they typically fail because, again, they need the contractility from the prostacyclin. What they have done is swapped out the oral or parenteral for YUTREPIA. So there's another opportunity. So across the full spectrum of oral inhaled and parenteral, we're trying to capture full share.

And our marketing message, they're very simple. They're the 3 Ds. So it's enhanced deep lung delivery, ease of use with a low effort device and titration to higher therapeutic doses. Before we launched, these were aspirational, now the reality. So I think when you look across the 3 Ds, what the product is showing -- the product profile has shown is that we can deliver to the deep lung without exacerbation of cough because we don't deposit in the upper airway.

We have an easy-to-use device with its low effort. It's a mono dispersed particle. We don't need any energy from the device to break it up, so it can be low resistance, and we can escalate these patients quite quickly to higher doses and to better effect.

So the way we looked at accelerated dose titration again from the ASCENT study, which we've evolved since the first presentation of early data last year is looking at taking PH-ILD patients naive to prostacyclin and adding YUTREPIA.

And just for -- to orient people on the left, the way that YUTREPIA is dosed is on breath equivalents to Tyvaso. We have 4 tablet strengths, 26.5, 53, 79.5 and 106. Basically, the way to think about that from a labeling standpoint is that's equivalent to 3, 6, 9 and 12 breath equivalents. And then we give the patients in this open-label ASCENT study dose over time.

And you can see at week 24, our maximum dose was 424 micrograms, which is a 48 breath equivalent. Our median dose was 185.5 micrograms, which is a 3 to 4x higher comparable maintenance dose than what you see with Tyvaso. So the targeted Tyvaso dose is 9 to 12 breaths, and you can see we're extending well beyond that.

And the advantage of that, it doesn't matter if you have an oral prostacyclin, an inhaled prostacyclin or parenteral prostacyclin, the higher the dose, the better the magnitude of effect. So for the first time, you're seeing an inhaled prostacyclin able to be dosed to higher levels and to better effect.

So one of the things we were concerned about is as we escalate this dose 3 to 4x, do we then exacerbate cough in patients with PH-ILD? And the answer is no. So if you look at change from -- we use a simplified cough score to look at cough longitudinally.

And if you compare from baseline to week 8, so we had gotten to 15 breath equivalents, no change, 1.3 to 1.3. Week 16, we've gotten to 18 breath equivalents, no change, actually a little bit down. And week 24, a similar picture, 21 breath equivalents and no change in the cough score.

So what that's telling you PRINT works. The fact that we can make particles in the lower end of the respirable range and deliver them discretely to the lower airway is providing the benefit that we wanted.

If you look on the right, again, we're now showing dose matters. Week 8, improvement of 21.5 meters, we increased the dose again, 31.5. Increased the dose again, and the outcome now is 41-meter change. So dose is doing exactly what you want in these patients. And we certainly think when we transition patients, for example, we'll be able to repeat this and dose those patients up.

So we talked a little bit about broader indications, and this is truly a renaissance period for treprostinil, particularly by the inhalation route. So there was a successful study in IPF that read out quite favorably with very good improvement in forced vital capacity or FVC.

We are going to do an open-label study with YUTREPIA in these patients, very similar to the ASCENT study, so that we can learn about does -- do the benefits that we've seen in PH and PH-ILD port to the IPF patients as well. We're confident that it will.

In systemic scleroderma patients with Raynaud's phenomenon, that's a Phase II study that will start in the -- with first patient in late this year, really to look at the -- can we improve the digital vasculopathy that they experience with pain tingling and numbness in the fingers that can progress to ulcers and necrosis and amputation even. So a new arena for us, trying to get beyond just pulmonary diseases.

And then in PH-COPD, we think there's tremendous opportunity if we select the right patient population, use YUTREPIA to its full benefit and move that product along. So what's nice about PH-COPD, it's a Phase III-ready program. We have work to do in terms of designing the protocol. We want to make sure that we get the right patients in the study to enrich the chance of success. But we look to start that study in 2027.

So if you look at the benefit of opening of these new markets just in terms of the potential and numbers of patients that need inhaled prostacyclin treatment, this is what this slide attempts to address. So PH associated, we've talked about is about 18,000-plus patients today; PH-ILD, about 60,000 prevalent patients; scleroderma patients about 30,000; IPF patients, we estimate probably around 200,000 or more; and PH-COPD, about 300,000.

So the market opportunities are below. And you can see if you just aggregate these up, and these are, again, rough estimates, but I think it doesn't take a lot to convince you that these are the opportunities in these large markets. They're approaching $20 billion in cumulative value.

So one way that we're going to prepare for the newer markets is not just with YUTREPIA. So some of the studies that we're doing are to inform what we'll do next and what we'll then use is L606, which is our extended release liposomal formulation, which provides more consistent exposure over time, and I'll try to show you some of that here.

So the left-hand panel looks at mean plasma concentration on the y-axis over time. This is Tyvaso in the blue. You give it 4 times a day. It has a 45-minute half-life. So you get a high peak to trough, but you get it 4 times a day. And then overnight from hour 16 to hour 24, you can see the drug is absent.

L606 is shown below. This is an equivalent dose exposure, but given twice a day, and you can see that we lower the Cmax by sevenfold. Cmax is usually associated with the level and degree of adverse events. and then we'll dose it every 12 hours. And that's important because if you look to the right-hand curve, what we're trying to do is get as close as we can to a parenteral steady-state PK profile.

And you can see with Tyvaso, hours 0 to 12. And L606, we get a similar exposure in total. And then from hours 12 to 24, you can see this is where the value of L606 will be. We'll provide an equivalent exposure in the 12- to 24-hour interval, which was in terms of comparison to 0 to 12 hours. So we won't be yo-yoing the dose and basically taking patients off drug every night. The advantage of that, obviously, is we want to try to keep these patients stable.

So the other thing about L606, the data that we've been able to gain to date suggests that it could be the most well-tolerated inhaled treprostinil ever.

So if you look at AE profile for cough, you can see 32.1% of patients had cough, but only 14% of that was deemed to be drug related. The typical cough incidence rate is -- or frequency is about 50%. So a reduced level of cough here and other things. So you're not seeing -- you're seeing very little systemic effects. But in particular, cough, which seems to be the hallmark problem, is mitigated.

Also, because of that, a similar occurrence that we see with YUTREPIA in the sense that the median dose, these are patients studied over the period of a year, is about 19 breath equivalents, but we've gotten patients up to 378 micrograms, so up to -- beyond 25 breath equivalent. So if you look at the right-hand panel, a lot of patients are getting to higher doses with ease. So exactly what you'd want, but now in a twice-a-day format, not 4 times a day.

And the advantage of that, again, we've studied in an open-label format. We already have data for patients over 48 weeks. The week 12 walk was a mean of 23.6, median of 17.2, week 48 median of 22.5 and mean of 29.4. So you can see a sustained benefit in walk, and these are patients transitioned from prior inhaled treprostinil use.

And then the peak and trough, this is the critical point, like how did we do? Did we avoid any excursion in efficacy because we had a high peak to trough variance? And the answer is no, we did not. So at week 48, the trough was 24.3. And at week 48, the peak is 22.5. So exactly what you want to see in an extended release format.

So under Rajeev's leadership, we are initiating the Re-Spire study. It's a Phase III multicenter, randomized, double-blind, placebo-controlled trial in about 350 patients using sites around the world. So more than 20 countries will participate.

That study has been initiated, and the delivery device is a moderate -- when we -- it's a nebulizer because it's a suspension. But I want you to know that this is a modern-day breath actuated mesh nebulizer. This is not like the previous nebulizer that's available and was developed in the mid-2000s. This one is new. We use it. It's the FOX Mobile device, but there's experience with it, and it's CE marked and 510(k) ready.

So at the end, to summarize, we also have the capital to do this work. So it's a lot of work, and we're trying to -- we're really trying to scale the company. We're scaling manufacturing. We're scaling our clinical programs. We're going to scale our sales force a little bit.

So we ended Q4 -- 4Q '25 with $190.1 million in cash or cash equivalents. And our goal is to increase profitability quarter-over-quarter, and we certainly feel we'll be increasing our balance sheet quarter-over-quarter as well.

So I thank you for your time and attention, and we'll open it up to questions.

So just a quick question to open up Q&A, was the rapid update of prescriptions and new starts surprising? And how do you see it continuing?

So I wouldn't say it was surprising because we understood well the deficits of the competitive therapy. We did have some aspirational goals in mind. And I think we've ASCENT showed us very clearly that we could -- in a patient population, the PH-ILD patients that have a predaliction for cough that we can minimize the impact of cough on dosing and therefore, the effect of the therapy.

So we think we're pulling all the appropriate levers. We are more convenient, safer and more efficacious. And again, the only thing that's similar is it's 4 times a day. So I think those -- pulling those three levers the way we have has been impressive.

I think there were some upside surprises. I think the oral transitions happening and as soon as they have, the fact that the addition of sotatercept is allowing deescalation or de-intensification of prostacyclin therapy off of these systemically tough products like parenteral or oral to YUTREPIA is critical.

And if you look at the trajectory and pace, we've been consistent, sustained, and I call it the escape velocity because it's taken us to profitability. And if you just -- I think we -- it's not unreasonable, and it's our goal to be over $1 billion product in 2027.

So given that statement and the success so far, what would be your expectations for 2026 and 2027?

Yes. I won't speak specifically because I don't want to give you a forecast. But I think the bigger global statement is this can be a $1 billion product in PAH and PH-ILD, all things being equal as they are today. We just continue doing what we're doing. We get more prescriptions, we get more depth of prescriptions, displace oral.

So I think one of the key areas for us, that's a $2 billion market today, not only to steal share, but as physicians look to add a prostacyclin, they now add YUTREPIA instead of an oral therapy, which they are doing, obviously now.

Congratulations on your success. How do you see the litigation? What's the status of that with United Therapeutics and how do you see that unfolding?

Yes, it's a focal point. Maybe, Mike, do you want to take that one?

Yes. Thanks for your question. The litigation where it stands right now is we had a trial in Delaware back last June. We went through an accelerated briefing period. We are, at this point, just waiting for the judge to rule. We are extremely confident in the arguments that we made. We strongly believe that we should win this case. We are prepared for any outcome.

Our focus right now is really on the execution of everything Roger just talked about, the launch of YUTREPIA, initiating all these clinical programs and everything that goes with a successful launch. But we're prepared, we're confident, and we look forward to a ruling, hopefully very soon.

Yes. Great question.

So given the $30 million in positive cash flow, only 2 quarters after launch, which is quite impressive, how do you interpret that for what that may mean for 2026?

Yes. So I'll start and then Mike will turn to you. So again, we think we're going to have a -- we have a goal to increase profitability. And I think clearly, if we stay on the trajectory that we're on, and I don't see any impediment to not doing that, then I think we'll continue to build our balance sheet.

Yes. I mean I'd just say the fact that 7 months into launch, we're a cash flow generating company, I think, is a testament of our execution and also puts us in a position to be able to continue the successful launch. As Roger said, we can invest further into the launch by expanding our sales force.

We can double our capacity to manufacture supply, which is our plan for 2026 to open a new facility in 2027, and then also start these multiple programs that are targeted to increasing the product profile of YUTREPIA, getting L606 into the clinic for our global Phase III and also looking at these new indications.

So as Roger said, growing profitability while investing into this -- into all of these opportunity with the cash that we have on hand without the need for additional capital, I think, really is a testament to our success in 2025, and we look to continue that in '26 and beyond.

And I think, Ben, maybe I'll add. I think just to put this in perspective, how well we've done, the competitor said they have about 10,000 patients on an inhaled treprostinil. In 7 months, we've added 2,800. So we're at about 25% share in 7 months.

They launched their nebulized drug in 2009 and their DBI in 2022. So in a very short period of time, we have rapidly captured a large share, particularly of new patient starts, and we've also transitioned some of the share. And I don't see any way -- any reason that wouldn't continue.

And when might you have the first look at the data coming from some of the new studies you've outlined?

Yes. And we tried to put a little bit of a soft timeline here. So we try not to be too descriptive. I think the goal is to get them started because they're open label, and we're going to take -- like we did in the ASCENT study, we took sort of snapshots of data at different periods of times, 8, 16, 24 weeks. We'll do that again here. So we could show data late this year. But again, just to soften it and just say sometime in '27 would be a reasonable expectation.

All right. Well, thank you very much for your time.

All right. Thank you, everyone.

Hi, everyone, thanks so much for attending the Liquidia fireside chat. Day 2 of the conference, the weather in London is getting a little chilly, but it's good for staying awake. So my name is Amy Li. I am a biotech analyst at Jefferies. I have the pleasure of welcoming Roger Jeffs, the Chief Executive Officer; and Mike Kaseta, the Chief Financial Officer.

I'll turn it over to Roger for opening remarks.

Great. Thank you, Amy. Really happy to be here at the Jefferies Conference with you. We're also joined by Jason Adair, our Chief Business Officer. So Mike, Jason and I, for those in attendance here live, will be available to answer any additional questions at the end of the talk today.

I'll give a very short preamble because the situation in Liquidia is a really, really brilliant one. So as you may know, we had approval in May for our first PRINT-enabled product, YUTREPIA. We just had our quarterly earnings. And in our first full quarter of launch, we were able to post $51.7 million in revenue.

We feel we are capturing the lion's share of both the new patient starts as well as beginning to transition the existing incumbent base from TYVASO and TYVASO DPI. So really pleased with where the business has landed. The question is, is that sustainable? And the answer is it's absolutely sustainable.

So the reason being that the reason we've started so fast and quickly is because of the product profile. There's 3 critical levers to any product launch other than execution is you need to have benefits in efficacy, safety and convenience. So if you look at safety first, we have a reduced cough because of our PRINT-enabled formulation and its ability to deposit in the lower airway.

Because we have lower cough, there's more tolerance to higher doses, which we can get to not only higher doses, but we can get there more quickly, so we can benefit to the patient to a higher standard. And finally, we do this with a low-resistance device that doesn't expose these patients to any exacerbation of cough that they may have because we don't really require a lot of patient energy to drive the dose.

So that product profile, I think, really predicts that we're going to continue to get the majority of patient share, particularly new patient starts and meet our goal in the future of becoming the leading prostacyclin in the entire PAH and PH-ILD space.

Excellent. So let's just start off with YUTREPIA launch, right? You've reported an excellent third quarter. You've had over 2,000 scripts at the end of October. And you're essentially getting to around 1,000 plus or minus quarter-over-quarter adds, right? So can you kind of give us an overview of, one, how many patients are currently on therapy as of now? And how should we think about the absolute patient adds going forward and then kind of these levers that we should be focusing on?

Yes. Mike, do you want to take that?

Yes. Thanks, Amy, for the question. Yes, so we're very happy with the launch. As you said, we have over 2,000 referrals, over 1,500 new patient starts. We have had tremendous momentum from the beginning of the launch, where we've gained significantly over the most recent months. And at earnings last month, Roger mentioned that October was our highest referral month of the entire launch.

So that momentum is continuing. And as we look forward and move forward through the launch and we start to see patients -- we start stacking patients, patients who are currently on therapy, staying on therapy and then ultimately, new patients come on, we're going to see that significant growth as we move forward to our -- and that should reflect significantly in our revenue as we move forward.

Okay. Awesome. And then when we think about kind of levers back half of this year, you're kind of -- you're seeing the conversion rates increase this quarter versus the last quarter. You're saying you're moving into community sites where a lot of the PH-ILD patients are located. You do have a good amount, a little over half of patients on free drug right now. So where -- when can we start seeing kind of those dynamics feed into your fourth quarter and first quarter next year?

Yes. So as you mentioned, we've -- our market access team has executed flawlessly in the early part of this launch. As we said in our Q3 earnings, we're pulling through about 85% of referrals into new scripts. We've also said that our usage of the voucher program has crept over 50%.

This is a great program for patients and doctors to try YUTREPIA to see if it works for them with the hope that it's something that makes them feel better and ultimately, will transition to commercial product at that point. So as we move forward, I would expect that, that free drug percentage of overall patients will continue to decrease significantly month-over-month as we continue to add patients, but it is an important part of our launch so that doctors and patients are able to expose themselves to our product.

Awesome. And just going into the current patients that you're getting, right? How early are you penetrated into the PAH patient versus the PH-ILD patient? I think one surprise that we saw is your PAH patient is still kind of making up the majority of these early patients. So was that surprising to you? And how are you kind of seeing the dynamics shift as you get later into launch?

Yes. So you're correct that the majority of our patient base to date is from PAH. 75% of those are naive or first-time users of prostacyclin and 25% are switches. And in PAH, of those switches, 40% came from oral prostacyclin.

So I think one of the things that pulled forward a bit more quickly than we even anticipated was the fact that patients who are having extreme difficulty with the oral therapies, particularly from off-target GI side effects are now looking towards YUTREPIA as an alternative, and that's a big market. That's about $1.5 billion in the U.S., if you look at the oral prostacyclin revenue run rate.

So very attractive. In PH-ILD, similar metrics in the sense it's 75% new and 25% transitioning from the existing TYVASO, TYVASO DPI products as well. I think if you look at how we've done with prescribers, we think the target prescriber base across both of those indications is about 6,000. We've had about 650 prescribers script YUTREPIA. So we have more work to do. Where we focused our initial phase of launch was in the centers of excellence, the major centers because we wanted to take the pole position in the new patient starts.

That was our day 1 motto for launch. We've done that, and we've done it in 1 quarter. I think it's clear that we're now in the lead position for new patient starts on an inhaled treprostinil. We also do want to transition patients that are not well served by TYVASO and TYVASO DPI, either for intolerability or inadequate dose.

And the TYVASO nebulized patients, which is about 35% of their market share still is low-hanging fruit that we're going to aggressively seek to go after. Other things that we're going to do to be proactive is we're going to do a directed oral transition study. So take patients directly from UPTRAVI, for example, and move them over to YUTREPIA to show that those patients that are not well served because of toxicities can be tuned up once they're switched to YUTREPIA.

And the other study that we're very keen to start also is a directed transition from TYVASO DPI. So patients that are on a lower dose, 48-microgram cartridges or below, so they're not able to get to higher doses because of intolerance. We're going to move those patients to YUTREPIA and share what we can do with those patients, which we're confident we can tune them up because they'll have a better tolerability profile. So lots to do. But I think in terms of how we're aggregating patients, we're doing it across the board, both indications in multiple ways.

Awesome. And have you quantified in terms of the distribution of patients that are on lower doses of TYVASO that can't titrate up because of some tolerability issue. How much of that market does it make up in PAH and PH-ILD?

Yes. We don't have a number because they don't really give any statistics on their product profile. What we know, if you look at the National Jewish data in PH-ILD specifically, and those patients are particularly sensitive to cough. In 42 days, 70% of the patients who had started TYVASO DPI had come off of it and gone back to nebulized.

So it's a large share of patients that are intolerant and can't be dosed. And you can debate if it's 70% like that study, which was a large study or less, but it's still a higher number than they would like, and it's a number that we think we can resolve all of those effects with.

Yes. And then one thing to add to that, we did our ASCENT study in PH-ILD, which was to address that exact concern. And what we saw that the results are very telling, and it follows to what Roger said earlier about our benefits in our product profile.

What we saw, we studied 54 patients of naive PH-ILD patients, and we track them open-label Phase IV study. We track them at 8 weeks, 16 weeks and 32 -- and 24 weeks. And at 8 weeks, we are at an average dose of 132.5 micrograms, which is the equivalent of 15 breaths of nebulized TYVASO and an average walk distance improvement of 21.5 meters.

When we went to 16 weeks, we increased the dose to 159, which is 18 breaths and saw an improvement of walk up to 31 meters. And then at 24 weeks, we increased the dose again to 185.5, which is the equivalent of 21 breaths and had an increase in walk of 41 meters.

So when you look at it in real data, and we did all of that at 24 weeks with a discontinuation rate of just over 20%. So you compare a 70% discontinuation rate at 6 weeks to a 20% discontinuation rate at 6 months. And we're very confident in our product and our product profile, which is why we're continuing to look for additional data in the studies that Roger talked about as we move forward.

Yes. And in addition, we measured cough longitudinally. So we did a modified cough score, and you could see no change. So even though we're really pacing the dose upwards, you're not exacerbating the cough in patients who have a high predilection for cough.

Amazing. And then I guess just quickly, what's been the physician feedback? Because I remember last time we talked, you said they were kind of waiting for durability data, and that was very important for real-world use, right? Have you seen kind of shift in prescribing in PH-ILD specifically after this data?

So I think the data is obviously very convincing. We've now had it presented and published, so we can go out and promote on the data. And I think once physicians see the data that Mike just talked about in terms of the doses that we can achieve, the benefits that we can provide and the lack of cough, they're very intrigued.

And when then really, that's just to encourage them to get over the threshold and do the first prescription. Once they've done that, all of the realities of the benefits and the levers that we can pull on safety, efficacy and convenience manifest themselves to the point where major practices are now saying they're going to do wholesale transitions of their whole practice to YUTREPIA, and they're only going to start new patients on YUTREPIA. So again, we need to keep building. We're not going to relax until we capture the share that this product and these patients deserve.

Awesome. Moving on to legal. I know this is the biggest...

It's our favorite topic.

Clearly. How are you prepared to kind of respond to the different scenarios? I think some of the feedback that we've heard is recently -- well, I just want to clarify, has there been any fundamental changes to how you're viewing the lawsuit recently? I think there's been some concerns that maybe there's been a tone shift. I just wanted to kind of hand it to you to, one, go over your thoughts on the scenarios. And then, yes.

Yes. I think as we get closer and closer to a decision, people get a little more anxiety. So maybe, Mike, if you want to talk about kind of how we view this.

Yes. So I'll say tone shift. There's no tone shift. We believe the facts on our side. We believe we should win. Now with that being said, like any good company and any good management team, you're always going to be prepared for whatever scenario is put in front of you. We're waiting for the judge to rule.

It could come any day. We literally could come today, tomorrow. We expect a decision imminently. Now in terms of the outcomes, like I said, we believe we should win the case. Our tone has not changed on that. What I will say is that there are -- in the event that we -- the judgment is against us, there are a multitude of scenarios. And those scenarios could range depending on how the judge rules on what claims he rules on.

It could range anywhere from a reasonable royalty rate. It could move to a skinny label of removing PH-ILD. And the last piece, which I think is important for us to point out only because United Therapeutics as part of post-trial briefing, requested that the entire NDA be removed.

We do not believe that will happen. We do not believe that should happen. But at the same time, we need to lay that out. Now with all that being said, we're prepared for any scenario. As of right now, we are 100% focused on this commercial launch. We're focused on the execution of that launch. We're very happy with where we are. In the background, we're preparing if a ruling were to go against us in any of those scenarios, we're working through what we would need to do in order to react to that is for us, at least for us, what's most important is patients and not to have any disruption.

So we're doing everything we need to do through conversations with the FDA, through our internal readiness procedures to be able to react immediately. But we're steadfast in our belief that we should win the case. But at the same time, we're going to be very prepared in any scenario.

Excellent. And then how do you think the judge will consider that YUTREPIA is already approved and there's a substantial amount of patients on treatment already. Like you said, there's 50 -- 25% that are switches from TYVASO. I would assume a proportion of them are either refractory. In PH-ILD, like we've seen with real-world studies, patients can aggressively decline, right? So keeping them on efficacious treatment is critical. So yes.

I think he'll render his opinion based on the rule of law, based on what was presented to them. Remember, Judge Andrews has been the judge in our prior patent litigation. There were 3 other patents asserted against us previously. All of those claims were either found to be invalid or not infringed.

One of those, the 793 patent, which is a precedent patent to the 327 patent, actually claimed all forms of PAH, including who Group III or PH-ILD, which 327 is specific to, and he found it invalid or not infringed. So again, he's heard this before. I think he's very learned, but he'll base his opinion on how the case was litigated.

Now the question that you're asking is, will he then consider the consequence to patients, which is real. You've got a potentially life-saving therapy that's meeting an unmet need and serving a different subset or even the full set of patients in a different and better way. I think he'll consider that.

And certainly, in his remedy, as Mike said, we're prepared for all different kinds of scenarios from a skinny label to maybe we have to negotiate a royalty rate or whatever that may be. But we'll deal with that when it comes. But I think the case will be decided on the facts and the remedy will be decided based a bit more compassionately.

Awesome. And then finally, in terms of kind of time lines around decision, I know you've said time and time again, you don't have visibility on that. But if we were to think, will the judge decide on remediation and infringement in the same ruling? Or do you think that could be spaced out? And then as we think about remediation potential, is there a potential you can discuss royalties right then? Or is it through appeals? Yes.

Yes. I think the broad answer is yes to all of that. So again, we'll deal with the reality as it's presented. As Mike said, we've prepared ourselves exhaustively for any reality that is presented to us. But don't leave here today without our belief is that we should win the trial based on the facts as presented. So -- because you could talk about the nuances for hours, but it doesn't serve us well because the decision is imminent. So he asked for accelerated briefing. The case was in June. It was heard. Post-trial briefing was completed in August. So we're well within, if not beyond the window of expectation of when we should receive that.

Awesome. Moving on.

I'll stay here.

IPF, PPF. I think you went from saying, hey, this is something that we'll look at for L606 to, hey, so this is something that we can look at for YUTREPIA. So what led to that decision? And I think more provocatively, if you look at the TETON-2 data, right, you're still seeing signs of a dose response. I believe in their Forest Plot, you're seeing patients on 9 to 12 months, they're showing higher efficacy even and also from a weight-based exposure. So -- do you have confidence that YUTREPIA could show clinical superiority? And how are you thinking about designing that trial for YUTREPIA?

So I think with YUTREPIA, again, we'll do an open-label study just to understand how YUTREPIA behaves in those types of patients, both IPF and PPF. If you look at how -- what their data was, it was more placebo was going down further than maybe active was going up.

We actually think because of the points you made about dose porting benefit, if we can have a better tolerated drug and can give more drug, then we can actually improve the FVC parameter, not just retain it. So -- but those are proof of concepts. It's really just to see does this product YUTREPIA behave in those populations, the way it is behaving in PH-ILD and PAH where the 3 levers we talked about, safety, efficacy and convenience are clear measures of differentiation.

For registrational studies, we would use L606 to do formal trials in IPF and PPF. The other one we're considering doing is PH-COPD. So they did run a study in PH-COPD. But to their unfortunate circumstance, it was during the pandemic. So that whole study was compromised because there was loss to follow-up because patients couldn't come back to the center.

I think there was issues with compliance and there was obviously COVID in these patients. So they shut that study down for safety, but it's our view that PH-COPD is actually ripe because we will improve the pulmonary hypertension component in a COPD patient, and that has to benefit them.

I think if you -- but you need to carefully select the sample of patients that you would study and then execute that study flawlessly. So we have all of that teed up. The good thing is L606 is a nebulizer. So if you took your worst case and for some reason, we were lost claim 14 on the DPI, that claim restriction wouldn't really intervene in terms of what we would do with these next-gen programs.

Awesome. Well, perfect pivot to L606. So you've -- I mean, the open-label data took a little bit to digest because, one, like you said before, the trial design is completely different than the one your once-daily competitor ran. This was something you kind of inherited from Pharmosa. There wasn't standard titration. The patient baseline is very unique because you have a bunch of TYVASO switches. So I guess, based on your and physician feedback from the data, how -- I guess, how are you thinking about how L606 will be positioned long term relative to the once daily and also TYVASO and YUTREPIA?

Yes. So maybe just kind of a background, like what are you trying to achieve with a sustained release formulation and the critical point here is you want your peak effect to be on top -- to match your trough effect to best effect because you're trying to replicate parenteral therapy where you're at steady state.

What L606 showed very, very nicely was that after a year of therapy, the peak and trough benefit sat on top of each other at around 23, 24 meters each. So perfect outcome for what we wanted to achieve because that defines what a sustained release molecule does or should do.

So our half-life is approaching 5 hours. The TPIP half-life is just over 6 hours, and you can see that from their recent publications in patients. To me, as a pharmacologist, both of those should be dosed at least twice a day because a 6-hour half-life for once a day is suboptimal. I think we can all agree.

You actually have proof that it's suboptimal from their own study. So if you look at PH-ILD patients, it's 30 patients. There were 10 active, but let's just -- in placebo, but let's ignore those. The 20 active patients, their median change was minus 4 at trough. By the way, that means no effect.

So they didn't benefit the patients at all because they gave a TPIP as a once-a-day regimen, and it should minimally be more than that in my view. So in PAH, they had a better benefit, but those patients had -- the most predictive covariate for outcome is 6-minute baseline walk distance, and they had a difference in the -- they had a lower walk distance in their active group versus placebo.

And all that active group did was correct to the placebo baseline walk. And they didn't control for -- and they didn't third world countries, so to speak, where there wasn't availability of background therapy. It certainly wasn't on top of Winrevair, which they'll need.

So to me, there's a lot of issues with that data and how it's been sort of summated and viewed it and turned to category killer. It's not. Like if there's a category killer, it's L606 because we're going to give it in a modern-day mesh nebulizer that's portable [indiscernible]. We had an R&D Day, and I encourage you to go to our website. There's a webcast if you missed it, and you can get full description from KOLs around L606.

Because it's liposomal, the cough rate was in the low 30s and drug-related was 14%. So it's going to have the safety lever. We achieved doses of 28 breath equivalents or higher in a lot of patients. So it's going to have the dose lever. And convenience, it takes about a minute to administer the drug through this and you just do it twice a day. And it's optimally delivered twice a day. So we could do it once a day, and I'd show you a very nice effect at peak, and I'd show you minus 4 meters at trough, which is not good for sustained release entity. So again, I think the way you need to like digest the data, be very careful when it's presented to you in a promotional way.

Awesome. So you bring up a really intriguing point about peak to trough, right? I think we've seen peak to trough in other drugs, GLP-1s, for example, TBD if it actually translate to anything. But I think the most important thing is for peak to trough, you have potentially easier titratable drug and better safety profile.

And then also your second point is you think you will need kind of more exposure on the back half of the day, right? Can you go over kind of what early data points you're showing? You're seeing that kind of one justifies maybe a better tolerability profile, but also kind of needing that effective twice-a-day coverage?

So we haven't done it. But if you look at their cough, it was typical of TYVASO. So I think we've shown now what are historically low levels of cough for an inhaled treprostinil. Now it's encapsulated in the liposome. It doesn't actually release from the liposome until it's in the lower airway.

So you're avoiding all of the upper airway irritation. So again, this is a different animal. And I think because we've seen benefits in peak and trough, you talked about the magnitude of effect. Remember, we did switch them from TYVASO, then we tuned them up, like the change we saw in 24 meters was above and beyond where they were after they already had TYVASO.

So again, this is the next gen. We're very, very excited about it. And I think no matter if both TPIP and L606 are in the space across all these 5 markets that are $5-plus billion, there's room for both of us to do very, very well together. So -- but the future will move to a reduced regimen paradigm for sure.

Awesome. And then I guess last question. You became operationally profitable 2 quarters ahead of your expectation, actually a quarter ahead of our bullish expectations. And we're seeing YUTREPIA has high margins, I think, 96% in third quarter. But like you said, maybe this is a natural run rate because there's some prelaunch inventory. Where do you think kind of the long-term gross margin is for this drug? And then kind of the ability for OpEx and margin expansion over time?

Yes. So obviously, we're very happy with how the launch has gone. As you said, we've achieved a profitability in our first full quarter of launch. We also generated positive cash flow in September as a company. So we are sitting in a very, very good position just financially.

As we move forward, we believe there's no reason for improvement there. Our SG&A costs from Q2 to Q3 remained relatively flat. The expectation is it will continue to remain flat. So as we increase revenue and we have growing profitability, as Roger outlined all of these R&D programs, we're going to -- what we believe is we'll be in a unique position to be able to take some of that profitability and reinvest it into our pipeline.

So being able to do that with the financial capabilities, but also with the discipline to look to continue to grow that profitability, having a small company mentality while having big dreams and big expectations, we think serves us very well. And as we move forward, we think from a gross margin perspective, from an SG&A perspective and generating overall free cash flow, we think we're going to be extremely successful.

Awesome. Well, we will leave it at that. Thank you so much for attending.

Thank you, Amy.

Thank you so much for coming.

This Healthcare Conference. And next company presenting here today is Liquidia. I'm really, really excited to have Michael Kaseta, who is the Chief Operating Officer and Financial Officer; and Jason Adair, who is the Chief Business Officer. Thanks, guys, for joining.

Exciting times with the story. So yes, I just wanted to just kind of give you the floor, give a quick sort of background about the story, where you are, like 3Q update, and then we can take it from there.

No, Ash, first of all, I really appreciate you and UBS for having us. It's been a great time at Liquidia. We're really excited for where we are. We just did our Q3 earnings last week. And we -- you talked about how the launch is going. We launched our product in May of this year. And in our first full quarter of launch, we have reported that we've had over 2,000 prescriptions over 1,500 unique patient starts. That translated to over $51 million of revenue. And we actually were profitable as a company in our first full quarter of launch and generated positive cash flow in September and October.

So, it's a great time to be at Liquidia. It's been a long time. We've been committed to this patient population and these physicians. And I think we're finally able to deliver on that promise to give patients a choice, a choice that they've been waiting for, for several years for a product that we feel is differentiated and ultimately can make patients' lives better for a long time.

Great. Yes, pretty exciting times. I mean, just like with the early launch, I think a lot of excitement, and I think you've blown past like all of the expectations that people had in terms of the launch. So, congratulations to you for that.

Yes, I think, obviously, I'm sure you're getting this in every single meeting, like where are the patients coming from? So yes, just to kind of address that. Yes, PAH, PH-ILD, like naive, like what line of therapy?

Absolutely. So, when you look at what we're most excited about is that we've seen patients coming from every aspect. We've seen PAH patients, PH-ILD patients. We've seen naive patients in both diseases. We've seen transition patients from Tyvaso, Tyvaso DPI. And also in PAH, we've actually seen oral transitions as well.

So, what we're most excited about is, and what we've always thought is the flexibility, our product profile of being able to dose to higher doses using an easy-to-use device really gives patients flexibility regardless of where they are in their disease journey to utilize YUTREPIA and ultimately benefit from this great product.

Yes. And has your expectations sort of been different versus like when you -- before launching the product, what you were expecting the source of revenue to be versus now that you have like seen the first quarter essentially, right? Has that come along pretty much the same that you thought that this will be the patient mix? Or is it different in any way?

Yes. So, we've had -- the launch has gone extremely well. We had high expectations. It's obviously outperformed those expectations. I think what has happened is, if you just look at the product profile and what we've done over the last couple of years, and one of those things is our open-label Phase IV ASCENT trial, which took naive PH-ILD patients in the first prospective study using a DPI in PH-ILD. What we've seen, and we've shown these results over the last several months, we feel really proves that hypothesis. And that hypothesis is we've been saying for a long time that more treprostinil is better for patients.

And our unique formulation technology, which allows us to manufacture particles of uniform size and shape, that allows us to achieve deep lung deposition, avoids buildup in the back of the throat or in the upper airways. And what we've seen in our ASCENT data is very interesting. And what we've reported on over the last several quarters is 8-week data, 16-week data and 24-week data for the 54 patients that we enrolled.

And what that showed was at 8 weeks, these patients were on an average dose of 132.5 micrograms, which is the equivalent of 15 breaths of nebulized Tyvaso, and they showed a walk improvement of 21 meters. As they've navigated to 16 weeks and 24 weeks, they incrementally increased their dose. So, at 16 weeks, we got up to 159 micrograms, which is the equivalent of 18 breaths, and we showed a walk improvement of 31 meters.

When we just reported last week, the 24-week data, the average dose was 185.5 micrograms, which is the equivalent of 21 breath of Tyvaso neb and showed a walk improvement of 41 meters.

So, when you put that all together, granted it was a Phase IV open-label study. But when you look at our product profile, we're very excited about what we've done. What we've also seen as part of our launch data is a significant amount of -- in PAH of oral transitions. And one of the things that we talked about last week in earnings is that we're going to do a similar Phase IV open-label study in oral transitions. And we're very excited about that.

If you look at the PAH market, that oral market is over 10,000 patients and over $2 billion. Oral treprostinil, those products are not easy on patients, difficult to titrate to a therapeutic dose. And our ability to, again, have such dose flexibility, we feel this is a product that ultimately can service those patients as well.

And Roger Jeffs, our CEO, has been saying for a long time, he wants to be the prostacyclin, the first choice. And we feel that as time goes by, we develop our product profile by generating clinical data, which we think is very important to our commitment to these patients and these physicians that we can slowly but surely do that and continue the momentum that we've seen in the early launch and deliver this product to as many patients as we can.

Yes. Is there like a specific metric around like the PAH versus PH-ILD, the way the split of the patient mix came out to be? Or is it like too early to start to comment on that?

Yes. I mean, I think from a PAH and PH-ILD, what we've said last week at earnings is that the majority of patients are in PAH. But PH-ILD, the PH-ILD patients are growing rapidly. We've long said that the PH-ILD opportunity is a large opportunity. We believe the addressable market is about 60,000 patients or more.

UT has, said on multiple occasions that they've, penetrated less than 20% of that market. We look at that as a long-term investment. It's a long-term investment. This is a relatively new disease state. The first product was approved less than 5 years ago. We are in the process of building relationships with doctors, helping them go through disease education, identifying patients, diagnosing patients, and ultimately treating those patients.

So, I think with us and United Therapeutics having boots on the ground, sales forces, medical affairs team, it's going to help everyone. And ultimately, we feel that will be critical as we build that market and increase our share as we move forward. So, we're excited for where we are. Like I said, the opportunities in both PAH and PH-ILD are massive, and we want to do what we can to get that message out to continue to show the benefits of YUTREPIA and hopefully treat as many patients as we can.

Yes. Yes, that's great. Yes. I mean, it's a pretty exciting launch with two different end markets that you're going after, right? I mean, from your like commercial effort standpoint, is there more or less of a focus on one versus the other? And I know like for PH-ILD, like right-heart cath can sometimes be a little bit of a stumbling block in terms of identifying these patients. Just like has your experience been any different in that regard?

Yes. So, when we built the sales force, we built that sales force with, in mind of, of having a national-based sales force focused on both large centers, but also local community. So, our sales force targets over 6,000 doctors. We've had over 6,000 -- I'm sorry, over 600 unique prescribers to date. So, there's still a lot of work and a lot of opportunity there.

We are building those relationships every day, I think one of the keys for us, our sales force was in -- has been in place since really the end of 2023. Up until launch, they were building relationships with doctors, talking about our PRINT Technology, which we feel is the bedrock of our product profile and the differentiation from our competitor. So, that was very helpful when we launched to be able to hit the ground running. But that focus remains unchanged, talking to cardiologists, pulmonologists, doctors who treat PAH, PH-ILD treat both patients. It's always been our focus. It will continue to be our focus, and we look forward to that continued growth.

Great. Great. And then on the PAH side, you said like oral transitions, right? Are these like the PDE5, ET1 generic combo drugs or like also like Uptravi transition?

Yes. So what we're really focused on is the oral prostacyclin market. So it's really Uptravi and Orenitram, we which -- again, we believe is over 10,000 patients. So that opportunity is very large, both from a switch point of view, but also looking at YUTREPIA having the product profile that ultimately could be the first-line prostacyclin therapy for these PAH patients. So again, everything we do is going to be based in clinical studies. So that's why we're going to kick off this open-label Phase IV study to study this and see what we find out. I think it's important for doctors to have data. And like we've done with our ASCENT trial in PH-ILD, we'll look to do the same with the oral transition study.

Great. I know there are a few different dynamics playing out in the market overall. Like maybe if you talk about this kind of oral transition market, ralinepag that like United Therapeutics is studying, like if this is where the focus is for you for PAH, like if ralinepag shows successful data and is able to enter the market, then like how could that change where you are chasing the patients?

I mean, we believe that YUTREPIA has a product profile that is very favorable from an adverse event perspective. The oral agents that are out there, it's difficult on patients. The off-target GI side effects are pretty significant. Haven't seen the data in ralinepag. Our focus is helping patients through their patient journey, and we'll continue that focus. And like I said, there's -- it comes from a lot of places. And whether you're a PAH patient on oral, currently on inhaled, if you're on parenteral treatment, we feel that we have a product that can help anyone.

And obviously, when new product and new data comes out, we'll evaluate that. But our focus is very clear, and we feel very confident in our ability to grow our market share, both -- grow the market share and grow the market in both PAH and PH-ILD.

Great. Awesome. So yes, just maybe from like an access standpoint, so the commercial versus Medicare dynamics. So where are you seeing the access right now? And yes, what's the plan to sort of build it out?

Yes. Our goal from the beginning was to make sure that patients had an opportunity to choose. Patients have been longing for choice for years. They were denied that choice for a long time. They finally have that choice.

In order for them to fully realize that choice, there can be no hurdles placed in front of them around access. So that has been our goal since the beginning. And as we had stated at launch, we have signed contracts with the three major commercial payers. We -- again, as we have previously stated, we had new-to-market blocks against those three payers for the early part of the launch. I'm happy to say that two of those new market blocks have already been removed. The third is in the process of being removed.

Once that's complete, I think we will have been successful in removing those barriers and making sure that we are not negatively impacted by payers in Part D, in commercial, and in government-mandated channels.

Got it. What do you expect to be like the rough split between the commercial versus Medicare in the new year maybe?

Yes. So, I think as we remove those blocks, what we have previously talked about is that the market is -- what we've seen is about 50% Part D, 35% commercial and 15% in the government-mandated channels like VA, DoD, Medicaid, 340B. We've been a bit skewed more towards the Part D in the early part of our launch for the reasons that make sense around the new-to-market blocks. As we move into 2026, I would expect that we would move back towards those percentages. And again, they're rough estimates, but there's nothing that we've learned that would change what those expectations would be.

Great. Great. Is there this type of a dynamic right now that because like the 2,000 out-of-pocket maximum that these patients might have hit already by this time, then you have more of like uptake coming because of that factor. But like when you start the new year, you won't have that tailwind to begin with?

Yes. So I'll be honest, I don't -- with the passage of the IRA and maximum out-of-pocket reducing, these are sick patients who tend to have comorbidities and are probably on several products. The idea that, that maximum out-of-pocket for Part D patients would be a barrier for us, I think, is not likely. And I don't think that, that would have much of an impact as we move forward.

Yes. Yes. That makes sense. Yes. So just maybe from a competitive standpoint, I want to ask a few questions. I mean, there is a lot of focus just trying to look at -- every time there's a new therapy in this market, right, people are like looking at how is the other company being impacted. So, we saw this dynamic with Winrevair and then now seeing with you guys that -- I mean, the United Therapeutics quarter was decent and didn't really see any kind of an impact.

And from the commentary that you're making like oral treprostinil product, it doesn't necessarily make me believe that like it is taking patients from Tyvaso DPI or nebulizer. Is that fair to assume at this early...

Yes. I mean, we've publicly stated that 25% of our patient starts have come through transitions. Being that there's only one product approved in PH-ILD, I think it's safe to assume that, that transition more likely than not is from the competitive inhaled treprostinil products. And in PAH, we said 40% of those transitions have come from oral and the rest presumably would have come from Tyvaso and Tyvaso DPI.

Got it. Okay. It's just not starting to be felt right now in the numbers. But as you get bigger, then we might start to see more of that dynamic.

I mean, I'll be honest, we're focused on Liquidia. We're focused on patients. I mean, they can focus on YUTREPIA and Liquidia all they want. We're going to focus on Liquidia also. So that's what our whole goal here is to service patients, offer patients choice that they've been denied for years, and we will continue to do whatever we can to offer that choice.

Yes. I mean, the value proposition just in terms of getting more dry powder, better deposited in the lungs, right? I mean, maybe just give a brief sort of artifact of how are -- how is YUTREPIA able to do that? Because I saw like -- I mean, United Therapeutics also kind of announced like higher doses for Tyvaso DPI. So, I'm trying to understand, is that effectively trying to catch up to the product profile that you have? Or where does it shake out?

Again, I'll focus on YUTREPIA. The foundation of what we believe is our differentiated product profile rests in our formulation technology. Our PRINT Technology allows us to manufacture particles of uniform size and shape that were specifically designed to reach the -- to achieve deep lung deposition. And that, in effect, our belief is that we will be able to reduce side effects and ultimately be able to dose higher to those higher doses.

What I think is very encouraging is, again, if I can go back to the ASCENT data, we've titrated patients at 24 weeks, as I said, up to the 185.5 micrograms, which is the equivalent of 21 breaths of Tyvaso neb. When you think about that, as part of the readout of that trial, we also have applied what we call a modified cough score. So when patients enrolled, they had a baseline cough score. And what I'll say is that baseline cough score from the time of initiation to 24 weeks has remained unchanged.

So, from a tolerability point of view, again, it's a Phase IV open-label study. So, full disclosure on that. But I think it's very telling that we've been able to go to significantly higher doses, cough has remained the same.

As we said, more is better, and we've achieved 41 meters of walk improvement. I wish I could state clinical trial in DPI and PH-ILD. Unfortunately, there is none. We have the data that has been published, and they were -- they showed a 70% discontinuation rate at 42 days through -- in National Jewish' real-world data.

Again, I don't want to speak for them, but I don't know how giving more of that powder is going to improve that side effect profile. So again, we're going to focus on YUTREPIA. We're going to focus on YUTREPIA's product profile, and we're going to continue to serve these patients.

Yes. I think, this is just the potential of this molecule and the drug can be pretty whole encompassing. So as you've seen, let's say, some of these development play out for IPF, just I'm just curious like how are you thinking about that? Is that a potential pathway for you to come like explore that market?

Sure. I can take that, Ash. So, I think what starts to make Liquidia unique is that we are solely focused on inhaled treprostinil right now, and that's both with YUTREPIA and L606. And what we're committed to do is to create the most value from those two programs. We believe our dry powder formulation is the best today, and we believe our sustained release formulation will be the best in the future.

So what does that mean for the recent data that we've seen? We'll see another registration study, I think, data coming out next year. I think people are encouraged. But what it's told us is that we probably should start to understand how our products would perform in that patient group. So specifically around tolerability and titratability. Two areas where we've already demonstrated in prospective studies that we may have an attractive profile to physicians.

And what we don't know yet about -- we'll call it more broadly pulmonary fibrosis is how does dose affect the response. What we've shown in our studies is that we can titrate to higher doses and there is a correlation with improved response. We don't know personally with our own product, what that looks like in pulmonary fibrosis. So we're committed to understanding that with YUTREPIA. And then depending on what we see, we'll make decisions on what does that mean for YUTREPIA and how does that inform a strategy with L606.

Got it. Do you think that it is possible that some physician KOLs like might start to try YUTREPIA in IPF, and that can be a sign for you to?

So I don't know what's possible, but I would say we want to be prepared. And what we've demonstrated is that we're always willing to do the right study first. The company was the first company to put a dry powder formulation of treprostinil in the clinic, the first company to do a prospective trial in PH-ILD with the dry powder. And so, we want to be, again, the first company that's studying maybe higher doses in this pulmonary fibrosis market to see if there's a dose effect.

Right. Got it. Okay. Maybe just like switching over to L606. So yes, if you can talk about like what's the differentiation versus YUTREPIA?

We're very excited about L606. Again, focusing on inhaled treprostinil, we saw that going to a dry powder formulation improves overall exposure as we go into higher doses through a more tolerable profile, but we couldn't change the dose frequency, the PK.

So Tyvaso, Tyvaso DPI, and YUTREPIA are all dosed 4 times a day. So, we went looking for the next best product profile, and that was L606 that we licensed in. It's a twice-daily liposomal formulation that's delivered with the rapid next-generation nebulizer.

And the reason why we like this profile is, again, the right order in our opinion is exposure drives efficacy, so how high can we dose it. Tolerability drives durability, meaning how tolerable and then ultimately, convenience.

What we just presented at R&D Day was the fact that we can dose to very high levels at the 48-week time point in this open-label U.S. study. And really surprising, I think, to most people, it's the most tolerated inhaled treprostinil developed yet. Now it's an open-label U.S. study on standard background therapy, but there were only four patients in 48 weeks that reported a mild cough, it was 14%.

So that really now starts to open up, wow, if we can get to high levels with really no impact on the tolerability, where does the compliance component come in with convenience. It's the twice daily that gives us more continuous exposure over 24 hours. So, as we know from 30 years ago, continuous infusion demonstrated the most efficacy in Iloprost, Treprostinil, Epoprostenol. So, how can we do that in the inhaled route? We think that's through twice daily because the patient will sleep comfortably knowing that they have therapeutic levels on board at night. So again, we're really focused on that exposure piece first, and that's why we like L606.

Great. And then like how receptive do you think that patients will be to handheld nebulize the device for L606? And like do you think ultimately, that may start to compete with what is out there?

Absolutely. Again, we've been running a study in the United States for over 3 years using a small portable palm-sized device and the patients haven't really reported any challenges using that. I think, what's interesting is that we haven't yet seen in our market, the wave of innovation that's coming with nebulizers. So, when we think of nebulizers today, we think of things like Tyvaso, right? It's been around for a while. Many pieces has some limitations where you think of the nebulizer, the PARI eFlow, which might be in two different components. What we're talking about is a battery-powered palm-sized device where a patient can deliver their dose in about a minute. So it has more DPI-like characteristics than it does the older nebulization technology. And we're very excited to bring that into a pivotal study soon.

Great. Awesome. And then just there are different stratification factors in the RESPIRE trial. So,, maybe if you can talk about that, what's the rationale for that?

Sure. So RESPIRE is the pivotal study that we described recently. So, it's a global study. It will be in over 20 countries, about 350 patients, and it's placebo-controlled. So, we were asked to do that, so that we could confirm for the agency that we didn't lose any efficacy by changing the PK profile.

Now we believe we may have the opportunity to improve the clinical utility, because I mentioned the more continuous exposure. So, we're excited to start that study, but do it in a real-world way.

So, you asked about stratification. So why would we do that? We want to represent the types of patients that physicians might be doing. So we had three different levels in there. And we're going to do that because it's a standard way of stratifying the study, but we don't want to bias either the placebo or the treatment arm. So, we're going to do so that when we come out with the data, we hope that it would be relevant to the physician community.

Would it be like a system on the same level of efficacy, let's say, compared to YUTREPIA? Like is that your ultimate goal or higher or lower than that?

So, we haven't published the study in full. We're going to initiate it later, so I don't want to preempt any statements there. But again, we've met with the agency, the FDA and the EMA. And what they've confirmed is they're not looking for us to make it better. It's just make sure that we don't lose what they already know with inhaled treprostinil. So I think we want to be smart about setting that threshold. But again, I think we have the potential to show an improved efficacy. But even if it's the same, it's still a very attractive profile based on the tolerability and the twice-daily dosing.

And does that have better potential in IPF given that you're able to kind of dose on a higher?

I think there's a lot to learn.

I'm surprised you're very -- you're effectively like not as excited about IPF as a lot of investors or the general community seems to be about this.

So, I've been at Liquidia for a while, it will be almost 10 years. And I think what we've learned is, we got to work our plan. If you work the plan in the right sequence, you can build a sustainable business. And that's what we're doing right now, right? We were profitable in the first full quarter. We have an exciting next-generation product in L606. We're taking off additional studies to create value with what we have today. And the IPF opportunity will always be there in the future. It doesn't necessarily mean that we have to go capture it today, because there's a lot we can do in the near term.

Yes. I have a couple of other questions. But yes, for the audience, like if you have any questions, feel free to send them through the QR code, and we can take them on. So yes, I mean, look, I think there is potentially like a big update on the legal case side. So to the extent that you can comment on like what are you expecting from that for this 327 patent? And I have a few follow-ups.

Yes. I mean, as you know, a patent was asserted against us, the 327 patent. The trial was in June. Briefing was done -- post-trial briefing was done about 2 months ago, and we're now waiting. And I think everyone is waiting and the Judge Andrews in Delaware will issue his opinion when he's ready. We're not going to speculate as to when that's going to happen. We're just prepared for it to come at any time.

Right. I mean, it's kind of an unusual situation in the sense that we have not seen that type of an action by a District Judge that they would go after basically taking off a product that is already being used by patients. Like is there any close precedent for that, that you have seen? And effectively, if it does come down to it and you're only -- I think you said that most of the use is coming from PAH, right? How does that factor into like the repercussions of what might eventually be asked to do here?

So it sounds like you think we're going to lose is what you're saying.

Just playing out either scenario, yeah, win or lose.

Listen, we think the 327 is an invalid patent. We think we don't -- they've asserted certain claims against us. We think it's either invalid or we do not infringe. Now is there a scenario where the judge can rule against us? Yes. Could there be a variety of range of outcomes? Yes.

Like I said, our commitment is to this patient population, we're going to do everything we can to provide product to patients who want and need our product. And we're going to do that until someone tells us otherwise. And we're prepared. And ultimately, we feel confident in our case. But we're going to wait like everybody else. And what I'll say is we're going to be prepared in any situation. I think any good company is going to be prepared for many outcomes. Like I said, we believe we should win, but we're going to be prepared regardless because, again, our main focus is patients, and we want to make sure that they are taken care of.

Great. Awesome. With that, we can wrap it up, and thank you so much for your time.

No. We really appreciate it.

Thank you, Ash.

Thank you.

Good morning, and welcome to the Liquidia Corporation Third Quarter 2025 Financial Results and Corporate Update Conference Call. My name is Carmen, and I will be your operator today [Operator Instructions] Please note that today's call is being recorded. I now turn the call over to Jason Adair, Chief Business Officer.

Thank you, Carmen, and good morning, everyone. It's my pleasure to welcome you to Liquidia's Third Quarter 2025 Financial Results and Corporate Update Conference Call. Joining me today are Dr. Roger Jeffs, Chief Executive Officer; Michael Kaseta, Chief Operating Officer and Chief Financial Officer; Dr. Rajeev Saggar, Chief Medical Officer; Scott Moomaw, Chief Commercial Officer; and Rusty Schundler, General Counsel.

Before we begin, please note that today's discussion will include forward-looking statements, including statements regarding future results, product performance and ongoing clinical or commercial activities. These statements are subject to risks and uncertainties that may cause actual results to differ materially. For further information, please refer to our filings with the SEC available on our website.

Please note that our earnings release, our commentary and our slide deck accompanying this call include non-GAAP financial measures. Reconciliations of these non-GAAP financial measures to the most comparable GAAP measures can be found in our earnings release and the slide deck accompanying this call. With that, I'll turn the call over to Roger Jeffs, our Chief Executive Officer. Roger?

Thanks, Jason, and good morning, everyone. This morning, I want to begin by expressing just how proud we are in what Liquidia has accomplished in a remarkably short period of time. Over the last 5 months, we've not only brought a new and meaningful medicine in YUTREPIA to patients living with PAH and PH-ILD, but we've also begun to influence the way physicians consider how to best introduce a prostacyclin into various treatment regimens.

Every day, we hear stories from physicians and patients who are thankful to now have an inhaled prostacyclin that fits their lives, one that's simple and well tolerated. For too long, patients face limited and difficult choices. YUTREPIA is offering them an attractive alternative. The results speak for themselves. In the third quarter, YUTREPIA continued to exceed expectations on every front.

As of October 30, we've received more than 2,000 unique prescriptions, initiated therapy for over 1,500 patients and have over 600 health care practitioners who have prescribed YUTREPIA across the U.S. In fact, October is our highest month yet for referrals. Through the third quarter, the vast majority of prescriptions are converting to active patient starts with the referral-to-start ratio hovering around 85%, an incredible figure for a new-to-market therapy and a true testament to the strength of our commercial and market access infrastructure.

We've seen broad application of YUTREPIA and I'd like to share some details on usage patterns. PAH has accounted for a majority of total prescriptions with the use in PH-ILD growing steadily. Approximately 3 out of 4 patients starting YUTREPIA are new to treprostinil, while about 1 in 4 are transitioning from other prostacyclin therapies typically inhaled. Switches from Tyvaso products are similar for both indications at roughly 25% of prescriptions.

Notably, around 10% of PAH prescriptions represent switches from oral therapies, a meaningful indicator that physicians may be starting to view YUTREPIA as a viable option to improve exposure and tolerability for patients who are struggling with systemic side effects from their oral prostacyclin therapy. This balance of naive and transition patients demonstrates the flexibility of YUTREPIA across real-world settings in specialized centers and community practices. The feedback we're hearing has been consistent.

Many physicians find YUTREPIA easy to initiate, faster to titrate and better tolerated than other available options while patients appreciate the convenience and confidence that come with a palm-sized low-effort device. YUTREPIA isn't just gaining traction. It's redefining expectations for inhaled delivery of treprostinil where exposure drives efficacy, tolerability drives durability and convenience drives compliance. We intend to translate this early commercial success into long-term sustainable growth.

As Mike will explain, Liquidia achieved profitability in its first full quarter following launch, and we are well positioned to reinvest in innovation without compromising our financial discipline. Our clinical strategy in the near term intends to broaden YUTREPIA's clinical utility. We are actively planning niche open-label studies to further strengthen the product profile.

For example, to help inform what we are already seeing in the field, we will initiate a study in PAH patients transitioning from oral prostacyclins to YUTREPIA. And considering the recent interest in ILD indications, we are evaluating the feasibility of proof-of-concept studies with YUTREPIA in IPF and PPF. We will also explore how YUTREPIA may be used to treat other diseases where patients have unmet needs and smart trial design can expand the value of well-tolerated inhaled treprostinil with opportunities in PH-COPD and Raynaud's phenomenon as examples. And as you heard during our R&D Day, we will further optimize inhaled treprostinil with L606, our sustained release formulation that is rapidly delivered twice daily with a palm-sized nebulizer.

We believe that the week 48 data from our U.S. clinical study already demonstrates that L606 may be the most tolerable inhaled treprostinil developed with clear signals of efficacy in PAH and PH-ILD patients, whether transitioning from Tyvaso or naive to prostacyclin. Our global pivotal study called RESPIRE will initiate later this year and planned enrollment to start in the first half of '26. Now let me hand the call over to Mike to explain how we can maintain our trajectory for increasing the overall value of the company. Mike?

Thank you, Roger, and good morning, everyone. The third quarter of 2025 was truly a breakthrough quarter for Liquidia, both operationally and financially. During the quarter, our first full quarter of launch, we delivered $51.7 million in net product sales of YUTREPIA. We accomplished this while total R&D and SG&A expenses remained relatively flat compared to second quarter 2025.

For the quarter, the company recorded a net loss of $3.6 million. However, when viewed on a non-GAAP basis, we generated positive adjusted EBITDA of $10.1 million in the first full quarter of YUTREPIA sales, much sooner than our previous guidance of profitability within 3 to 4 quarters post launch. Cash on hand at the end of the quarter totaled $157.5 million.

Of particular note, I'm especially pleased to say that September marked our first month of positive net cash flow, a major operational milestone that highlights both our rapid success and disciplined approach to cash management. During September, we added $5 million in net cash, and we've continued to build on that momentum with additional gains in October. Looking ahead, we expect this positive trend to extend into 2026 as we stay focused on driving profitability while reinvesting in R&D to support sustained long-term growth. Roger, back over to you.

Thanks, Mike. And as we close out this quarter, I want to emphasize the 3 key foundational elements that are truly defining the success of Liquidia both now and into the future. One, we have a product in YUTREPIA that is rapidly influencing the standard of care. Two, we have quickly established strong profitable operating foundation; and three, we have a disciplined growth strategy focused on expanding indications and value for YUTREPIA while also advancing our next-generation product, L606.

These pillars, innovation, execution and reinvestment are what will guide us as we end this year and enter 2026. Above all, I want to thank our team, our clinical partners and the patients who trust us. They are the reason we continue to deliver with both passion and precision. With that, operator, please open the line for questions.

[Operator Instructions] Comes from the line of Amy Li with Jefferies.

Congrats on the incredible launch. Based on our back-of-the-envelope math, we're getting to around 1,000 patient adds this quarter, which is doubling what Tyvaso, Tyvaso DPI reported in their 500 quarter-over-quarter adds earlier in their launch. Can you give us a sense of what's driving this uptake? And in particular, the breakdown between PAH and PH-ILD? And then finally, how are you thinking about the trajectory of patient adds going forward?

Amy, thanks for the question. So again, we won't really comment more specifically than what we already have in the earnings release on numbers. But I think what you're seeing is very strong demand in the first 5 months of launch, completely driven by the product profile of YUTREPIA, which is unique and certainly is well on its way to becoming the established prostacyclin of first choice not only in the inhaled market, but as we alluded to, we're starting to see oral transition so we can offset some of the GI toxicities with the oral.

And then what we're also seeing somewhat is in the patients that have added sotatercept and maybe "normalizing" as they deescalate the parenteral therapy, they're replacing that with YUTREPIA so that they can keep the prostacyclin pathway addressed. So there's a lot of, I would say, growing opportunity. I think if you look at the first 5 months, we've obviously seen very strong demand based on the profile. October, as we said, has had a slight uptick versus the previous month. So we're still on an attractive runway.

And while we can't predict growth in the future, and certainly, there will be some seasonality and I think some ordering choppiness at the early phase of launch, I think we'll continue to execute well, and we feel very good about our future prospects. Maybe, Scott, if I could ask you to maybe highlight some of the things that you think as Chief Commercial Officer that have highlighted the quarter and address more specifically some of Amy's questions.

Yes. I think that the things that we're focused on right now is, one is we're continuing to increase breadth. So we're still in launch phase. We're still out there getting awareness and trial. We feel like we have an amazing opportunity still to drive to new prescribers. At the same time, we're still looking at depth from the current prescribers. We have -- each day, we have new prescribers that are over the 5 prescription mark, which shows, I think, an amazing amount of investment at those centers.

So we think there's a lot of opportunity left out there. I think, Amy, I think you asked about the PAH, PH-ILD split. One thing we will comment on there is we have seen that PAH is a majority of the prescriptions. However, PH-ILD is definitely growing steadily, which is kind of what you would expect. I think PAH was probably a little bit more the, if you will, the lower-hanging fruit and PH-ILD is a growing market, as we all know, and the sky is the limit as far as that goes.

One moment for our next question that comes from Cory Jubinville with LifeSci Capital.

Congrats on this really exciting update. I guess, can you just speak to what percentage of revenues might be associated with contracted versus noncontracted reimbursement? I mean, at this point, are you on the formularies for the 3 major PBMs? I'd say the script volume and the prescriber count is strong, of course. But I think the revenues being recognized to this magnitude this early definitely far exceeds expectations. So just trying to get a sense of what some of those key drivers were in order for you to convert volume to revenues this quickly.

Great question. And we've certainly spent a lot of effort and energy on the market access initiatives. Mike, if I could ask you to comment on the specific question.

Yes. Thanks, Roger, and thanks for your question, Cory. Specifically around payers, I think it is also a testament of where we are right now on our pull-through. And as we said, we've pulled through approximately 85% of referrals have converted into a script. And that's a testament to the -- what we had talked about the launch of building these patient support services that will enable that smooth transition, and we're very proud of what we've done there.

Now as it relates to payers, as we've previously stated, we signed contracts with the 3 major commercial payers. We are -- the new-to-market blocks that we referred to previously have or will be removed here in the coming weeks. So as it relates to what is contracted and what is not contracted, to date, as you know, there is no contracting in Medicare Part D. So we are even footing there.

In commercial, we are -- have started -- have contracted and started to receive -- start to pay rebates there. But as we move forward, as we've always said, we wanted to make sure that patients had an ability to make a choice, and we feel that we have achieved that now and look forward to the future where if a patient wants to choose YUTREPIA that they will not be blocked by virtue of a contracting issue.

Our next question is from Julian Harrison with BTIG.

Congrats on the quarter. Of the 1,500 patients on YUTREPIA at end of last week, are you able to say how many were in the 28-day voucher period at that time? And also average time from prescription written to YUTREPIA being shipped to a patient, what is that currently looking like?

Yes. Julian, it was good to see you last week at the R&D Day. Mike, if you could answer the question, please?

Yes. So thanks, Julian. In terms of average time from time prescription is written to when it's filled, what we're seeing is it's usually within a few weeks, which is pretty customary for SPs. We have a cross-functional focus on pulling through every prescription from market access to field reimbursement managers with the SPs, which is in constant coordination with the HCP office. Now as it relates to our voucher program, again, the voucher program that we offer patients to give them an opportunity to try YUTREPIA with a free 28-day first shipment. That has ticked up a bit.

We are now a bit over 50% of our new patients are using the voucher program, which was slightly higher from where we were when we had our call in August. But we feel it's a great opportunity for patients and doctors to trial YUTREPIA. And if it works for them, then that they can continue on their journey. But for now, the expectation and where we are is slightly over 50% are using the voucher program.

Excellent. And just to clarify, 50% have utilized the voucher program or were using it as of the end of last week.

So from launch to date, we were slightly over 50% Yes.

[Operator Instructions] Our next question is from Ryan Deschner with Raymond James.

Congrats on the quarter. In second quarter, you reported an elevated level of channel loading and I just wanted to ask how this metric is trending in third quarter and into October. And then I may have missed it at the beginning, if you could comment again on naive versus treprostinil experienced patients.

Yes. Ryan, so I'm not sure specifically what you're asking about channel loading because I don't think we commented on that specifically in the prior quarter. In terms of naive versus transition patients, it's been about 75% have been new to prostacyclin therapies and 25% have been transitions typically from inhaled, although you can see in PAH, where the orals are only approved and not in PH-ILD, we are seeing 10% transitions there.

I think one thing that question is related is kind of are we growing the market versus just taking share. And I think the correct answer is, yes, we are -- I think the market is growing now with a second company in there driving awareness. And I think -- but when you look at things sequentially, I'd say, quarter -- second quarter to third quarter, I think we're capturing the lion's share of this new opportunity. For example, I think it was reported last week that Tyvaso increased in aggregate across the nebulized and Tyvaso DPI franchise, $14.8 million, whereas we're now from Q2 to Q3, we've grown by $45.2 million. So that represents the revenue growth.

And of that revenue growth, we've captured 75% of that, which we're very, very pleased about. So a lot of opportunity here to grow the market. And I think with the product profile, the commercial acumen and the ability that we've had to drive immediate awareness around the value of YUTREPIA, you're seeing that the uptake is leaning in a one-sided manner towards YUTREPIA. So again, I don't think we've commented on channel loading, but we can get back to you on that later, if that's helpful.

Our next question is from Serge Belanger with Needham.

Congrats on the first quarter of launch. First question regarding payer coverage. Can you kind of give us an update on now on when you expect to be at a steady state of coverage? And I believe your competitor had entered some contracts with some commercial plans. Just curious if that has led to some headwinds for coverage of YUTREPIA. And then lastly, maybe just expand a little bit on your plans to explore YUTREPIA usage in IPF and PPF.

Great. Mike handles payer access question. you'll handle the first question. And then, Rajeev, if you wouldn't mind speaking to our explorations in IPF.

Yes, Serge, great to hear from you, and thanks for the question. As it relates to payers, and you referenced United's comments that they had contracted in the commercial space, which we've spoken previously about that they contracted at a parity level. As I said earlier, we have signed commercial contracts with the 3 largest payers. New-to-market blocks have been removed or in the process of being removed.

So as a result of that, we feel that we will be on equal footing with United as it relates to that. So we feel very confident in our strategy, very confident in where we sit right now that will enable us to have future growth. One other point I just want to go back to is around the channel loading. Obviously, at launch, the channel loading prior to launch, SPs are making an assumption of what's needed.

What I would say is we have settled into where I believe is a normal level of inventory. If you want to say that SPs hold somewhere between 3 and 4 weeks of inventory. We have leveled off there. We have great relationships with the SPs to understand where ordering patterns are. So we're very confident in -- as we move forward that can be managed appropriately and feel that we are in line with what our expectations would be.

Great. Rajeev, if you'll speak to the clinical question.

Yes. Thanks, Serge, for the question. So I think there's a few lessons coming out of TETON-2 that highlight that inhaled treprostinil appears to slow the progression of forced vital capacity in patients with -- specifically with IPF over a course of 52 weeks. I think the other thing that continues to be something that we, as a company and with YUTREPIA are in full agreement is that dose matters. And once again, that will [ be on ] hold, it strongly suggests in TETON-2 that if you can dose the patient as high as up to 12 breaths, these patients did much better than if you cannot -- the patient cannot get to at least a minimum of 9 breaths.

I think, obviously, our ASCENT study strongly suggests that if we can even dose even higher to that, we actually and earlier, we potentially can even improve overall patients in regards to exercise capacity at least in PH-ILD. So if you take the entirety of that situation, and of course, the PPF study is not read out yet, but this suggests that I think YUTREPIA has a very strong product profile that may have some significant advantages over nebulized Tyvaso in regards to potentially ease of use, dosing and titratability and overall tolerability effect. So I think as an organization, we're extremely interested in evaluating and considering this pathway as we move forward.

Thank you, Rajeev. As you stated, this is a real period of renaissance for inhaled treprostinil. And I think the value that YUTREPIA brings and the market opportunity expansion is immense. And that with L606, we have a next-generation opportunity to really complete this paradigm shift over time.

Our next question is from Andrew Fan with H.C. Wainwright.

Congratulations. I guess, the strong sales are always a great thing and patient demand is always a great thing. Maybe you can speak to the heightened importance of it in the context of the ongoing litigation with United Therapeutics and the read-through of the strength of sales and strength of patient demand and clear perceived differentiation in the products as we think...

Yes, Andrew, it was a little bit difficult to hear the question specifically. I could hear that you were asking about the litigation and how that's...

Read to the robust commercial environment to the [ litigation ].

Yes. I think the simple answer to that is physicians and prescribers in general don't -- aren't that aware of the litigation. And their only concern is patient benefit. So I think when our goal has been to expose the centers to the value of YUTREPIA, get them to try it, particularly within the centers of excellence and then drive further demand.

I think that's their concern. What happens in a court of law is outside of their jurisdiction, so they don't technically pay any attention to it. So to me, there's not a lot of read-through in terms of how that litigation has impacted the uptake. And as you can see, we have been robust...

How does it impact the landscape of thought processes Judge Young might go through in deciding is outcome of the litigation. So more of the commercial impact that Judge Young...

Yes. Yes. Understood. Okay. Maybe, Rusty, you can count on the sort of balance of equities and harm.

Yes. So we don't -- again, it's hard to predict how a judge is going to consider or even whether he consider commercial results, if that's the question. I think the judge is going to be thorough in thinking through the evidence that was presented to him and evaluate and come up with a decision. So again, I don't think he's going to be taking into account what's happening in the marketplace sort of post trial and coming up with his decision. That was the question.

Yes. I would maybe just take this opportunity to just remind listeners today that the value of the opportunity in PAH alone. I think the oral therapies are doing around $2 billion currently. The inhaled -- if you just split the Tyvaso revenue in half, you'd say it's close to $1 billion and then orals are around -- I mean, parenterals is around $500 million. So you can easily get to a $3.5 billion current day revenue opportunity with -- in PAH alone. And as you can see, we think the attractiveness that YUTREPIA offers can lead to a leading position across all 3 of those segments, the oral inhaled and the steel of parenteral share. So again, I know there's some concern around what may or may not happen with 327, but I think even if you took it in isolation, this is a tremendous opportunity that we have in front of us.

Our question is from Ben Burnett with Wells Fargo.

Congrats on the quarter. I just want to follow up on that last question. I guess I think we were maybe anticipating an update from a legal update. I'm just curious if the timing from what you're hearing on your end is any change? And I guess maybe could you also just remind us as to what exactly we'll get? Like should we get an understanding of any sort of ramifications? Or is this just purely a decision around this patent that you mentioned?

Yes. Thanks, Ben. Rusty?

Yes. Thanks, Ben. So I mean, as far as timing goes, let me address that first. Obviously, there's no deadline for judges to rule in cases. I think the judge -- the case load in Delaware is pretty high. I think the judge is going to be thorough in his opinion, but we don't have visibility as to when that decision will come. I think if you look at the time it took him to render a decision in the first Hatch-Waxman case a few years ago, I'd say we're in the window of when we'd expect an opinion, but the window is a pretty wide window.

I think any time between now and sometime in the first quarter even wouldn't be unexpected. Then as far as sort of what we would hear from the judge, I think, again, if you look at the last case as a proxy, I think what we expect here first is just a decision essentially as to who won. And then typically, there's then a second step where the parties then put in front of the judge what they propose the consequence of that decision is one way or the other. And then if there's a disagreement between the parties, there's potentially additional hearings or whatever the judge wants to do to work through that. So at least as far as the initial step is, our expectation is just going to be an opinion as to who won, who lost.

Our last question comes from the line of Jason Gerberry with Bank of America.

One litigation follow-up. Do you have a sense whether a royalty is a possible remedy depending on outcomes of the case as opposed to -- I think there's a lot of, I guess, thought that perhaps like an outcome if there was patent infringement would just be removing ILD from the label.

So I just kind of would love to get your perspective on that. And then as we look to 2026, why wouldn't it be reasonable to assume there's at least 2,000 patients on paid drug next year, just given the trends and what we're seeing? Just love to get your perspective on that.

Yes. Rusty, you'll answer the litigation question, please.

Yes. Jason, thanks for the question. I think there's a wide range of possible remedies here. It just is very dependent on exactly what the judge rules. I think the decides to put in arguments the consequence ranges from YUTREPIA being removed from the market to a royalty and those are all in sort of the downside scenarios. So again, it's just highly dependent on exactly how the judge rules.

I think depending on which claims he finds are infringed the basis for the infringement, the consequences could be different. So I think it's hard to comment on that now. I mean, obviously, once we have the opinion, we'll have a more informed take on what we think the likely outcomes are. But at this point, I think as we've said consistently in our 10-Qs and other releases, I think we have a wide range of potential outcomes. We're just waiting to see what the judge says.

Great. And on the last question, obviously, we're not going to forecast patient numbers. I think what we have highlighted is that we've driven brand awareness very quickly. There's been significant uptake of YUTREPIA in our early launch phase and that our pull-through rate is very, very high at 85%. And we don't see any further impediments to that.

So we're going to continue to try to position YUTREPIA as the best-in-class and first in choice prostacyclin and do what we need to do to benefit every patient that we can possibly benefit. So with that, I think we'll end the call. I'd like to thank everyone for joining us today. We're really proud of the progress we've made in just a few short months and even more excited about what lies ahead. I hope everyone has a great day. Thank you.

Thank you for participating in today's conference. You may now disconnect.

Well, great. Thank you everybody for being suited. Welcome. I'm Roger Jeff, CEO of Liquidia. And welcome to our first ever R&D Day. We're really excited about what we're able to share with you today. I also want to recognize that we have a large number of our leadership team here. And I think if you have questions after the event and you'd like to speak with them individually, please do.

So today's presentation, as you know, will include a number of forward-looking statements that may include risks and uncertainties and uncertainties and thus are not meant to guarantee future results. We refer you to our filings for a more complete listing of this associated risks and uncertainties.

So our goal at Liquidia is to revolutionize the care for patients with challenging respiratory and vascular diseases through PRECISE innovative therapies that restore health and hope by improving drug delivery, using proprietary formulation technologies, to reduce the burden of administration and help patients live and breathe longer.

To level set, as we look at all markets, both current and future, the ideal product profile for inhaled treprostinil delivery is optimized for 5 key elements, and you'll hear this repeatedly today and the other speakers presentations.

First, targeted lung delivery to reduce the off-target effects and toxicities from oral and IV and subcu delivery like GI toxicities, in site pain and erythema or risk of septicemia.

Another element is that the therapy should be portable for convenient and easy use to support compliance by the patient. It should be tolerable. So it's customizable and not dose limited. Critically, it should be titratable across a wide dose range to extend time on treatment and the dosing frequency should be easy and a simple regimen. So those are the 5 elements that if you were to produce an ideal therapy, you would check the boxes for all of those.

YUTREPIA, in particular, addresses the first 4 elements. And it's the current best-in-class inhaled treprostinil option by the virtue of meeting these 4 elements. And as such, clearly has tremendous opportunity within the currently approved indications pulmonary arterial hypertension and PH with associated lung disease. If you look at it, it's targeted lung delivery, but targeted in a unique way through the print formulation technology and that it discretely gets to the lower airway. It's portable with a low effort, trustable reliable and robust device tolerable, as you've seen from the original INSPIRE study. And as you'll hear more about today from the ASCEND trial, take tradable, and we're going to share more and new data from the ASCEND trial to show you a continuing titration over time.

And the only thing where it may fall a little short is it's still 4 times a day, which is where the incumbent brand therapy also is. L606, our life assemble sustained release formulation takes this -- the one step further and aims to address all 5 elements by reducing the dose regimen to twice daily and thus would represent the next major advance in inhaled therapy of treprostinil delivery and patient care. So as you can see, retains all of the things that you would want, targeted delivery, using a liposomal formulation, which we'll dive deep into today, both at the science and the results from the L606 48-week study.

It's portable with a rapid breath-actuated nebulizer. Rajeev will go into detail on it, but this is it here. It's tolerable with -- and actually, what we feel it will further improve the tolerability that we already observed for YUTREPIA because it lowers the Cmax while sustaining the exposure of our twice-daily administration. You'll see readily titratable because it's well tolerated and the dosing frequency, we now check that box as a twice-a-day therapy.

The real important people here today are sitting here. These are invited guest speakers. Dr. Richard Channick, he's the EndowChair pulmonary arterial hypertension, co-director of the Pulmonary Vascular Disease Program and Professor of Medicine and Critical Care division at the David Geffen School of Medicine CLA. Rich and I have worked together since the early '90s on the first-ever trial of Flolan on many subsequent trials over the past 3 decades. So welcome, Rich.

At UCLA, Rich's Acumen is complemented by Dr. Rajan Saggar, who along with his brother, Rajeev Saggar, our CMO, were the original innovators for the use of treprostinil to treat PH in patients with associated lung disease with publications dating back as early as 2009. And as you can see, the titles that Rajan holds at UCLA. Rich and Rajan are truly a dynamic duo and have created one of the leading practices in the world at UCLA, both in terms of expertise and volume of patients that they treat.

And finally, a true rising star in the pulmonary field is Dr. Ricardo Restrepo. He's a leading clinical investigator in almost all of the major studies is one of the leading enrollees in Lour 606 study, which he will review with you today. So here's today's agenda, and we'll cover the following topics. Rich will take a deep dive into the diagnosis and treatment of PAH in PH-ILD and the critical role that inhaled treprostinil can play with special emphasis on the differentiated product benefits of UPI.

Rajan will then provide for the first time, exciting 24-week data from our ASCEND study in PH-ILD. We'll then turn to a review of the formulation science in PK that underpins our liposomal sustained release suspension by our CMO Rajeev Saber. And this will be followed by the first-time presentation of week 48 data from the 28 patients that have participated in the ongoing open-label L606 study by Dr. Restrepo. With that, I'll turn it over to Rich, who will address the unmet needs for patients with pulmonary arterial hypertension and PH-ILD. Thank you, Rich.

Thank you very much, Roger, and thanks, everyone, for being here. I'll try not to distract you from the view, which I'm looking at. But as Roger said up, yes, I've been involved as in this field for 34 years. So I think I see the perspective from the era of no therapies whatsoever back in the late '80s, early '90s when I started doing this to now.

So I think that perspective is -- gives you a lot of ability to see where we're headed what we need, where are the gaps? And I hope to kind of give you that perspective from a really personal point of view, having dealt with this condition and these therapies for so long. As you know, and I've done enough of these to know that this group is probably very sophisticated in this disease state. So we're not doing a basic review.

And as you know, when we're talking about treating pulmo hypertension, the first step is to diagnostically categorize a patient correctly. One of the big mistakes of not getting adequate therapy to a patient is not treating the right patient, either not making the diagnosis or making the wrong diagnosis. So we use this category of of classification groups from 1 to 5 based on a pretty standard workup that every clinician should know and which we spend our time teaching about.

Today, as we're talking about the drugs that we have ARPU for Group 1 or what we call PAH. So this is pulmonary arterial hypertension, and that can be idiopathic or associated with a lot of diseases or Group III, which is pulmonary pretension associated with lung disease. And when it gets to drugs like YUTREPIA, we're talking about poretention associated with interstitial lung disease, one form of lung disease. So that's obviously what we're going to focus on when we're talking about the treatment today.

So the next thing to set this all up for what we're going to be hearing about later is how common is it? And the prevalence of pulmo hypertension, whether it's Group I or PAH or Group III PH associated with ILD is a changing target because one of the problems is, of course, under diagnosis and lack of diagnosis.

And the more you look for it, the more you find. So when you see the -- all these numbers on here, we always have to take them with a little grain of salt, like the 48 per 55 cases per million for PAH makes you obviously a very rare disease. It's a lot less rare than that, in my opinion. I mean, done this for a long time. And many, many patients are not diagnosed with PAH when they have it.

Even more so, when we're talking about PH associated with ILD, you see these kind of percentages depending on what kind of ILD from up to 86% with IPF. We're not going to go through every form of interstitial lung disease, but it's complicated, right? And so we have NFIP. We have connective tissue diseases and pulmo hypertension. We have hypersensitivity pneumonitis CPFE. So these are all sub forms of ILD. And you can see the numbers there in terms of the percentage level develop PH in those diseases, pretty darn high, ranging from 20% up to over 80%. So this really steps up the importance of looking for pulmo hypertension in a patient with interstitial lung disease.

And again, this is what we spend a lot of time hitting home. The other point related to that is that if you do have pomapetension in the setting of interstitial lung disease, it significantly and negatively affect survival. And there are data from a number of recent registries. This is one called Go Deep, but there are several others showing that, in fact, on the curve on the left, Patients with PH-ILD do have a significantly worse outcome survival than even patients with PAH.

And importantly, and this gets to how big the market is for these patients, even in the setting of mild, what we might call mild pulmo hypertension in the setting of ILD, as shown on the right-hand graph, it still has a pretty poor survival. You can see there with a wood unit, actually a measure of the resistance or PVR, less than or equal to 5 may be pretty mildly elevated, greater than 5 is more severe. But you can see poor survival in both of those groups.

So the take-home message is that even with relatively mild and there are some studies showing even with very mild PH with ILD, outcomes are worse, another call to action for recognizing and treating early. One of the problems, however, is making a diagnosis. And as a clinician who sees thousands and thousands of these patients, one of the problems, and this more gets to the clinicians is that the symptoms of pumipetension overlap the symptoms of interstitial lung disease.

So short of breath or light headed. There are a number of symptoms. So in the trenches, when a doctor is looking for pulmonary hypertension, it can be hard to unmask it in a patient who has a lot of underlying lung disease. But the vigilance required for repeated testing and the high index of suspicion for finding PH, again, is a critical part of the messaging and the education that experts like myself, spend our time doing to try to teach clinicians to find it and routinely screen for pulmonary pretension, again, now that we have effective therapies for these patients. And even going a step further, when we're talking about how mild is mild, we have the hemodynamic definitions.

I don't know how familiar you are with these, but the hemodomic definitions change and they keep getting lower and lower. In other words, the level of pulmonary artery pressure and the level of resistance that we call abnormal now keeps decreasing. And the reason why that is, and you can see that laid out here in these different guidelines is that there's pretty good data and that's shown on the right that mortality goes up even when you have mild, and so much to say, even borderline pulmonary hypertension.

And this is just a study showing that inflection at a PVR of like 2 wood units, which 10 years ago, we would have said it was completely normal doesn't look like it's normal. And increase in mortality at a PVR above 2 wood units was actually a surprise to me. And I think really, again, indicates why it's important to diagnose this early. Well, why do we diagnose it early? Because we now have effective therapy.

And now we're going to turn to the prostacyclin pathway, which is obviously what we're talking about today with the therapies you're going to hear about. So again, I've been doing this as long as Roger and he was involved in the very first study with a very first drug for pulmo hypertension, which was epoprostenol or Flolan. That's a prostacyclin that was developed to augment what was deficient in patients with pulmonary to hypertension.

And we know even 35 years later, the prostacyclin is a critical pathway in the development and progression of this disease. And that replacing prostacycline, targeting prostacyclin, we believe, is very critical and will remain critical in the future. The prostacyclin that we're delivering does a lot of positive things like relapsing the blood vessel, preventing proliferation of the blood vessel wall, preventing things like platelet aggregation.

So there's a number of effects that prostacyclin has that will be desirable in a patient with pulmonary hypertension. So the prostacyclin pathway continues to be critical. And this is just a brief time line showing how this developed from the early days of the early '90s when -- again, we came on the scene, so to speak, when we had IV epoprostenol approved in 1995. Then you had a longer-acting treprostinil formulation delivered as continuous parenteral therapy in the late '90s, early 2000s. You then have the oral prostacyclin pathway drugs and then the inhaled drugs, starting with inhaled iloprost inhaled treprostinil, given as a nebulized form in TYVASO, followed by a DPI formulation of TYVASO.

And we'll talk a little bit about some of the challenges with that drug related to cough and irritation. Now to the latest formulation, which is YUTREPIA, recently approved. And I'll give you my own personal experience with this evolution and what we've seen. Clearly, when it comes to inhaled therapies, there's some theoretical benefits. It doesn't take a gets to figure out that if you have a disease in the lungs, getting a drug directly to where the disease is and not delivering it systemically seems to make sense.

And so the ability to reduce systemic side effects, deliver a drug directly to the lungs, maybe have less specificity, higher local concentrations, maybe improving what we call the ventilation perfusion matching and then importantly, in a way that patients will be willing to do. The worst treatment is one that the patient throws out the window because they don't want to do it. And that's a critical part. Drug can be really effective. But if they don't use it, it doesn't help.

So let's turn then to the inhaled treprostinil. And that's where we're going to really go with the rest of this day today. So one of the things we know, and there's a few general themes that I've observed over many decades working with prostacyclins. One of them is that dose seems to matter. And I would unequivocally state that if you can get a patient to higher doses, a higher exposure of prostacyclin and they tolerate it without dose-limiting side effects, you'll likely get better benefit and the patient will do better.

One of the challenges, frankly, with the previous form of TYVASO, nebulized and that's shown here is the ability to get patients to high enough doses. And this is just a study showing that only 28% of patients to get above 9 breaths and we'll talk a little bit about the breadth equivalents with the other speakers when you look at some of the other data. And you can see here that, that seemed to make a difference.

So the less you can get on with that drug the less effective seemed to have on something like exercise capacity. And that's a problem. And it's an opportunity for a new drug to come on to hopefully get those doses higher. Another issue, real-world issue, and now we'll get it a little bit into sort of the real world. So this is a paper presented by the National Jewish group that looked at actually a dry powder formulation of TYVASO, the TYVASO DPI and showed a problem with it in patients with PH-ILD.

And I will certainly attest that this is likely a real problem. Like the tolerability as it relates often to cough with patients with significant lung disease who are delivered that particular DPI. And this particular study presented for the National Jewish Group, a significant majority of patients discontinued the drug, whether they had -- were naive to prostacyclin or were transitioning from the nebulized form. You can see in the circle there, that very high discontinuation rate.

And it happened pretty early, like within 40 days or so. So it seems to be a challenge and again, an opportunity to develop a DPI maybe specifically in patients with PH-ILD but maybe other forms of PAH that's tolerated in terms of the local effects on cost. And I think we're seeing that benefit with YUTREPIA. That's been my experience at least. So we're not going to go into detail on the drug and the delivery of it.

But based on the way these particles are made, you get this deep lung delivery. You have a what's called a low-resistance device because the particles don't aggregate and can get deep with very little patient effort. And it appears that we can get to significantly higher doses with the drug with YUTREPIA. So that's a good thing.

One of the things that the [indiscernible] data was the INSPIRE study, which looked at PAH patients who are transitioning from TYVASO to YUTREPIA. And you may have seen some of this in patients who are naive to prostacyclin and this just shows some of the local side effects. We don't want to get in the weeds on this. We certainly can answer it during the question and answer. But the 2 things that we looked at that are reported here were cough and throat irritation and one can see here that in both populations, the naive patients, and the transition patients.

Cough did occur as throat irritation, but it actually seemed to decrease over time and was rarely a reason for discontinuation of the drug. Patients almost never had to discontinue YUTREPIA due to those local effects, which is a reassuring finding. So again, I didn't show you that much data we can talk a lot more about. You're going to hear a lot more data.

What I wanted to do in the last slide is to really give my perspective, again, as somebody who's done this for 35 years as to where I think this field is going. And what I think this drug and maybe the drugs that come are allowing us to do in a center like ours and others that see thousands and thousands of patients. I think the issue of dose is clearly critical. And many of our patients up until now have been dose limited due to side effects.

The ability to deliver inhaled prostacyclin at those adequate doses and we're seeing it with YUTREPIA for sure, has allowed us to in some cases, completely avoid and in other cases, certainly delay the institution of a parenteral prostacyclin. I can tell you -- and this isn't just me. I can tell you, others have the same experience.

So the number of patients were starting in real world on parenteral prostacyclins is clearly decreasing as we're using this drug more and more. Maybe even more excitingly, it's allowed us to start to transition patients off parenteral therapy. And we have a series of patients who were actively or have already transitioned off of the pumps to YUTREPIA at high doses.

We think that the addition of the drug sotatercept that I'm sure you're familiar with as well, the subcutaneous active and signaling inhibitor has helped facilitate that. I don't know if it's 100% necessary, but that's been -- we have a written protocol for adding sotatercept and then eventually transitioning patients off of parenteral therapy now to urea. And I think even broader when we talk about the treatment algorithm in our practice, in our large center and others, this question of when we should start our prostacyclin now in the era with all these other drugs is something that we talk about all the time.

And I think, again, having a convenient form of inhaled prostacyclin that can get to higher doses and is well tolerated, has pushed it earlier. So -- I'm personally -- will start our prostacyclin a lot earlier than I would have when I was more worried about side effects, route of delivery, convenience of delivery. So that's also, I think, pretty exciting real-world experience.

I think, again, the dosage that we're getting to are much higher than we've been able to deliver with other non-parenteral formulations like oral formulations or other inhaled. And I believe, and that's just hypothesis, I say that over time, giving a drug like this than high doses will give a patient a better exposure to higher dose uprostacycline, which I believe and hypothesized will give them better long-term effects, not just acute effects on how far they walk, but actually cumulative effects on their disease course.

That's what we hope, and that may replicate what we've seen with parenteral therapy in the past. So very exciting stuff. And we're doing it also transitioning from the oral prostacyclins to the inhaled formulation. So lots of exciting things happening in the field. I think I've sort of set it up for you by talking about how common this is more than we think, how severe it is the importance of looking for pulmonary hypertension in the setting of all forms and certainly, PH-ILD and then the importance of prostacyclin and the prudential convenience of inhaled process cycling and why our experience with YUTREPIA to date has been so positive and then looking towards the future, where we think this might all be headed. So with that, I'll stop, and we'll go on to the next speaker. Again, plenty of time for questions afterwards.

So now I'd like to introduce my partner and colleague UCLA, Dr. Rajan Saggar, who's going to present data from the ASCEND study.

Thank you. Thank you for Dr. Channick, nice talk. So I'm Dr. Rajan Saggar. I'm at UCLA. I'm a pulmonologist. We are a program -- I'm specifically a professor of medicine. I actually have a keen interest in pulmonary vascular disease. I co-direct the program with Dr. Channick at UCLA. And we have about 2,000 patients that we follow with pulmonary hypertension. I think a conservative estimate would be about 10% to 12% of those patients have some form of interstitial lung disease. We're also a certified center for pulmonary fibrosis and for scleroderma.

Scleroderma, you might know, is the most common autoimmune cause of PH-ILD. We've had a very keen interest, as Roger mentioned earlier, in the molecule treprostinil and how it affects patients with PH-ILD. And that goes back about 20 years. We have used it in all its forms, including parenteral delivery. So it's very exciting to see this field in PH-ILD sort of manifest with inhalational therapies.

And as Dr. Channick mentioned, it makes a lot of sense to deliver the drug directly to the lungs. So I'm here to really talk to you about YUTREPIA and look specifically at this very exciting data that's out from the week 24 data in the ASCEND study. And just to remind everyone, the ASCEND study was an open-label randomized multicenter study really to look at primarily at the safety and tolerability of YUTREPIA in patients with PH-ILD. There were 54 patients in this study who all had right heart catheterization proven pulmonary hypertension, precapillary pulmonary hypertension. And these patients all had some form of interstitial lung disease or combined pulmonary fibrosis and emphysema on a CAT scan, okay? And all of these patients had a baseline walk distance of greater or equal to 125 meters.

What's important is the dosing strategy in this study. And as Dr. Channick mentioned, we were informed initially by the INSPIRE study, which Dr. Channick mentioned earlier. And the dosing in the INSPIRE study allowed us to really challenged the concept of the idea that doses need to be higher or could be higher when treating patients with PH-ILD and PAH.

So it brought up this concept that, hey, maybe we're able to get patients on much higher doses of inhaled treprostinil and maybe even do it faster. We were also informed by post-hoc analyses of the INCREASE study. Remember in the INCREASE study, it's very clear that more is better, getting to 10 to 12 breaths per session or higher is really what led to the primary and secondary efficacy endpoints. In addition, there's also data from post-hoc analysis from INCREASE showing that treatment delay, which is really a theme in pulmonary hypertension. If you delay therapy, the placebo arm never catches up or never does as well. So the idea is, can we get to higher doses and can we do it faster?

And if you can do those 2 things effectively and maintain tolerability, I think you've really met the burden of an ideal drug, in this case, inhaled treprostinil. So here's the dosing strategy on this slide, which was prescriptive to the investigators, and we were an investigator in this study. We enrolled about 10% of the patients in the study. And you can see here at week 8, week 16 and week 24, the investigators were asked to try to get to this peak dose, okay, or that dose, that specific dose at those weeks.

How they did it was up to them. They could titrate as fast as every 3 days. So 132.5 micrograms of YUTREPIA at week 8, 159 at week 16 and 185.5 micrograms at week 24. These are -- the comparable doses of Tyvaso here would be 15, 18 and 21 breaths QID. If you talk to multiple practitioners today that manage PH-ILD, you'd be hard-pressed to find people using those types of doses with the other inhaled treprostinil. We did have exploratory endpoints. I'll talk to you today about the 6-minute walk distance.

I won't get into the other ones, but they did look at some quality of life metrics or dyspnea 12 index as well as the EphasSIS 10, which is actually a validated questionnaire, quality of life questionnaire in PAH, not in PH-ILD necessarily. But we will look at the 6-minute walk.

And the other thing we're going to talk about is cough. This was actually the first study that I'm aware of using inhaled treprostinil that looked at some quantitation of cough going into the study and not just treating cough as a binary sort of issue like yes or no, but actually, okay, how much cough did you have going into the study and did it really change during the study? And I'll get more into that in the future slides.

So out of the gate, we can see that at week 24, the majority of the patients, over 70% of them were still in the study. There were 15 discontinuations. None of them were related to the actual therapy. There were no discontinuations related to the treatment itself. This was a 27.8% discontinuation rate. And to be fair, this is the same discontinuation rate. If you look there at week 16, the discontinuation rate in this study was 18.5%.

In the INCREASE study at 16 weeks, the discontinuation rate was around 24%, fairly comparable using nebulized treprostinil. But actually in stark contrast to what we saw at least in the real-world experience that Dr. Channick mentioned from National Jewish, where the Tyvaso DPI, the discontinuation rate in the naive patients that went on to Tyvaso DPI with PH-ILD, the discontinuation rate was 70% at a median of 40 days after starting the medication. So we want to make that parallel there. The other thing you can see here is the adverse events here. The patients came out of the study discontinued for -- remember, this is an agent population, mostly in their late 60s.

They have other comorbidities. Two of these patients had lung cancer, one had chronic pancreatitis, one had coronavirus. Three of the patients got transplanted, one of them after an acute exacerbation of the interstitial lung disease. So this is all kind of real-life cohort. And one of the main messages here is that ASCEND, among other studies that we're going to talk about today, really represent what we see in real life in real clinical practice, and this is that. So let's move on here. So let's talk about the demographics.

So as mentioned, these were aged patients, mostly in their late 60s. I guess it depends who you talk to when you say aged. These were mostly males. They mostly had prevalent ILD. So these were patients who had established interstitial lung diseases. However, they were newly diagnosed with pulmonary hypertension. The interstitial lung diseases really ranged much like increase did. There were multiple etiologies of interstitial lung disease. So you have idiopathic interstitial pneumonias, of which IPF is the most common. You have autoimmune interstitial lung disease.

I mentioned scleroderma as the most common cause of that. And then you had other more uncommon stuff like hypersensitated pneumonia. And then also as with INCREASE, combined pulmonary fibrosis and emphysema was also enrolled. As you know, PH-ILD has the word ILD in there, and we have antifibrotic therapies that are also on the market.

And as with INCREASE, these patients were on background therapy, but the rate of background therapy here with antifibrotics was twice as much as it was in INCREASE. About 40% of patients here were on antifibrotics background, about 20% in INCREASE. And most of the use in the U.S. here is with nintedanib. But what also distinguishes this study, and I want to point this out, unlike in INCREASE, these patients were allowed to be on background therapy, specifically with the PDE5 inhibitor, either sildenafil or tadalafil.

And that's really important because Sildenafil is a medication that is used in the United States and frankly, in other countries as a therapeutic for PH-ILD. It's just a fact. It's easy to get and many patients will benefit from it. And there is data that suggests that there may be a subgroup of patients with PH-ILD that do benefit. The drug was YUTREPIA was studied over a broad range of peak inspiratory flow rates, and it worked beautifully. Just to point out here that there was a broad range of peak inspiratory flow rates.

Dr. Channick brought up the low-resistance circuit in the inhaler device itself. This worked beautifully as anticipated. The hemodynamics in the study, you can see that the pulmonary vascular resistance was 6 wood units on average. Keep in mind that the definition of severe PH complicating ILD, 5 wood units is sort of that threshold. So above that is considered severe.

So on average, most of these patients had severe pulmonary hypertension complicating their ILD. Most of these patients based on pulmonary function tests were moderately restricted. They had severe loss of infusion capacity. These are typical features of pulmonary hypertension associated with ILD. And just a few things on clinical characteristics. The walk distance at baseline in the study was just below 300 meters. This is a little bit higher than you might expect for a PH-ILD population.

We explained that in the context of -- in this study, we actually did enroll patients who had a milder PH phenotype. I sort of forgot to mention that. So patients who had a mean PA pressure of 21 or higher were also included in the study, which is a little bit different from the INCREASE study. So there was a milder population, which probably increased the baseline 6-minute walk. The other thing is we did allow for background therapy with PDE5 inhibitor, as I mentioned earlier, that also probably brought up the 6-minute walk at baseline and hence, why you see a little bit higher than what you might anticipate.

I mentioned the simplified cough score here as well, which we're going to get into in a future slide, but this was that semi-quantitative scale that I'm going to get into in a future slide. So this is really -- let me just set the slide up for you. So on your right is the YUTREPIA dose on the Y-axis. And the opposite of that is the comparable nebulized treprostinil dose, okay? And you can see here, it's broken up by week 8, week 16 and week 24.

And what you can see -- in the red lines there are the median dose of YUTREPIA and the comparable dose of nebulized treprostinil. And at week 8, week 16 and week 24, the median doses in this study are 132.5 micrograms of YUTREPIA, 159 micrograms of YUTREPIA and 185.5 micrograms of YUTREPIA, which correlate to comparable doses of nebulized treprostinil of 15, 18 and 21 breaths per session, okay? So I think the bottom line here is that we were clearly dosing this drug at comparable doses of nebulized treprostinil, which are very high. And we were able to get to such doses in a very fast manner. And I'll remind everyone that at week 16 in the INCREASE study using nebulized treprostinil in PH-ILD, the median dose was 12 breaths of nebulized treprostinil QID.

In this study, the comparable dose was 18 breaths of YUTREPIA -- sorry, 18 breaths of nebulized treprostinil equivalent of YUTREPIA at the week 16 median dose. So well, that's all great. You can get the drug high, you can get the drug high fast, meaning quickly, all novel thing or all very noble things that get done here in the ASCEND study. But if that's at the expense of tolerability, you got a problem, which we did not see in this study. So here, you can see week 8, week 16, week 24, you can see the median doses just beneath that, okay? And those correspond to the 15, 18 and 21 breaths of nebulized treprostinil breath per session.

The most common adverse event was cough, not surprisingly, about 40 -- somewhere in the mid-40s to high 40s of the patients had cough -- but what's really important is the investigators were asked to label the cough as mild, moderate or severe. Almost all of the cough was mild. There were no discontinuations in the study related to cough. I mentioned that earlier as well. Nothing -- no discontinuations related to the medication at all. And importantly, the second most common adverse event was headache. And this is a common prostacyclin side effect.

It was about 13% to 18% as you go from week 8 to 16 to 24, and the other side effects there were minimal. So very well tolerated. And really, it looks like the cough as you go through time, week 8, 16 and 24 sort of stays relatively stable, right? Now we're going to talk a little bit more about that cough. So the cough scale here was a simple -- it's a non-validated scale, but I think it's the first time that someone has taken a look at quantitating the amount of cough that someone enters the study with PH-ILD.

So here, you can see the scale is 0 to 3, 0 is no cough, 3 is frequent cough. And you can see at baseline, the patients had cough. And as we go from week baseline to week 8, week 16, week 24, as sort of was intimated in the last slide, there's really no change in the report of cough as we go through the study. And as I mentioned, all of the cough that was reported or almost all of it was mild in nature.

So I think that's important to keep in mind and really a big, big deal in terms of tolerability and really brings this home nicely. So let's talk about the exploratory endpoint. This is one we're going to speak about today, which is the 6-minute walk distance. And you can see, just to set it up here, this is the walk distance changes, okay? These are -- there's no placebo arm here. So this is just straight up walk distance changes at week 8, 16 and 24 in black are the median values by the bars. And then if you want to see the mean values to the left of your screen -- sorry, to the right of your screen. So at week 8, you had a 21.5 meter at week 16, 31.5 meter and week 24, 41-meter improvement.

Well, that's just a lot of numbers. What does it really mean? Well, in pulmonary vascular disease, one of the critical numbers you need to remember for significant walk distance improvements is actually 30 meters. It's a very important threshold. In PAH or Group 1 pulmonary hypertension, this has been validated and anchored to patient-reported outcome measures of improvement -- improved quality of life.

So 30 meters or above is the magic number where at least in PAH, it's considered to be clinically relevant for that patient, okay? We don't know what that number is for PH-ILD. But again, these patients are being treated for PAH. We feel that this is still a relevant number. We'll keep in mind, these patients are much thicker. The number may actually be less. But the point is that by week 16, the median change in walk at 31.5 meters surpasses that threshold.

And certainly, at 24 weeks, it's even more past that threshold of 30 meters. So just to get more granular, these are the 37 patients at the end of 24 weeks that actually were able to walk. And you can see here that more than half the patients walk 40 meters or more at 24 weeks. And in fact, over 40% of them walk 50 meters or more. And again, 30 meters being that magical threshold for clinical relevance, at least in the field of PAH, okay?

So in summary, I mentioned this earlier, but UCLA enrolled about 10% of the patients in the ASCEND study. I want to second what Dr. Channick said and echo what he said. We have a long-standing experience with inhaled treprostinil prior to YUTREPIA. And this was -- we certainly dealt with a significant amount of cough and other side effects, throat irritation, et cetera. In this study, and again, this is an open-label study, so you have to take it with a grain of salt. We had anecdotal experience from this study that this was, in some ways, different, very different for us.

We didn't have the patient calls. We weren't -- they weren't being bothered. We weren't being bothered. Everyone was happy, and there was clinical efficacy at doses that were much higher in terms of comparable nebulized treprostinil doses with YUTREPIA than we had seen before. If you go around the country today and ask people how much inhaled TYVASO they use standardly in their practice for PH-ILD, they're not going to tell you 15 breaths or higher. That just doesn't happen. It's just not a thing. And that's usually because of lack of tolerability.

The other thing is we saw this 6-minute walk improvement. I think we talked about this 30-meter threshold. So that's very important. This drug was approved, as you know, in May of 2025. So we have about 5 months of experience. We've used this drug extensively since our experience with ASCEND and Dr. Channick and can attest to this as well. We've seen the ongoing experience that we anecdotally saw in ASCEND has continued gloriously since then, and we're very happy and so are the patients, most importantly, with the medication. So I want to thank everyone for their attention, and we'll move on to the next talk here.

So I'm going to introduce another Sagar, my brother, Dr. Rajeev Sagar, who is the Chief Medical Officer of Liquidia. I want to thank everyone for coming here today. It's an honor to be present and speaking on behalf of Liquidia about our next-generation formulation program to take treprostinil to the next level. This is known as L606, which is our liposomal sustained release formulation. Before I started, I think it's an honor. It's the first time I'm speaking actually with the very people who mentored me trained Dr. Channick when I was a fellow and then underneath my brother when I was a senior fellow to a junior attending. So it's fantastic.

I also want to thank Roger Jess for giving me this opportunity to take my passion from clinical medicine and drive it into drug development. We proposed treating patients with PHLD, my brother and I as early as 2006 to Roger saying that this molecule is magic. And it shouldn't just be positioned in Group 1. It's going to change how we manage patients even in Group II and I think beyond. And we look forward to leading that charge here as Liquidia advances forward.

I think Dr. Channick set up the concept so eloquently in the late '90s to probably the first decade of the 2000s, the concept of delivering prostacyclins was game-changing for patients with pulmonary arterial hypertension. It took the prototypical young female who had less than 3 years to live to completely revolutionizing their life in terms of quality and longevity. And it was known at that time that if you can dose the patient continuously 24 hours, 7 days a week, clinically, it was impressive results that you saw.

People who were short of breath, literally walking to the bathroom to normalizing relatively their lifestyle. It's all relative to their disease state. But that came at a cost. And the cost was being hooked on to a pump and all the complexities that occur with that and also the complexities of every time you increase the dose, it rechallenged the patients with classic prostanoid side effects, headaches, jaw pain, leg pain, diarrhea, nausea, et cetera.

But what was very clear is that in clinical practice, the anecdotes, the case reports, the publications started coming in at unbelievable rates that patients with severe pulmonary hypertension lo and behold when they repeat the catheter after months or years on continuous therapy showed almost relative normalizations of their pulmonary pressure. So the take-home message was that if we can develop a drug that is very tolerable and can maintain 24-hour exposures, I think you've hit sort of the best ideal formulation for these patients.

This was followed with the construct of trying to use oral therapy, but what can never be fixed with oral is the intolerability to the very side effects of the prostanoid therapy, leaving it to be less used. And that's where inhaled came in. And Dr. Channick and Rajan eloquently already showed you why delivering to the lungs has tremendous advantages for a field that has -- that is a pulmonary-driven disease, we know with COPD and asthma, you don't give pills, you don't give infusions, you give inhaled medications. And while this formulation

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Liposomes have been approved in intravenous formulations, transdermal depots as well as inhaled anti-infective agents, but it's never been used in rare pulmonary conditions such as pulmonary hypertension.

Specifically with L606, as I noted, we use particular concentrations of phospholipids, and we stabilize the liposome with cholesterol. We also enhance the physiochemical properties of our liposome such that it avoids certain pulmonary barriers because as you know, our lungs are full of mucociliary elevators. We have macrophages we need to avoid. And it does so by avoiding those barriers, and it also is designed to interact with pulmonary surfactant. What is most unique is the size. The size embeds itself in the alveolar epithelial membrane.

And I will talk on the next slide because the alveolar is a site where gas exchange occurs, we take advantage of the high carbonic acid level inside this tissue to allow treprostinil to diffuse across the liposome and directly into the site of action into the capillaries and hitting the bloodstream directly. Of course, once the liposome has released the treprostinil, the standard at that time, it is removed with alveolar macrophages through phagocytosis as well as mucociliary clearances, we cough it out or we swallow it. I think what is exciting about this slide is it shows the high level of science in the design of the liposome.

Unlike the upper respiratory tract, the lower respiratory tract, i.e., the distal alveolar regions contain -- where the gas exchange actually occurs, contain a very prescriptive level of carbonic acid and bicarbonate buffers that maintain a very tight PH balance within this area. And those of you that practice medicine, we study this all the time about acid-based disorder and how the lung is involved with keeping that PH balanced in our blood. It just shows that we have a high level of carbonic acid in the distal alveolar fluid and inside the liposome contains a deproteinated treprostinil.

The carbon -- high-level of carbonic acid through osmosis diffuses into the liposome, hydrogenates the salt, in this case, treprostinil that allows it to selectively diffuse out of liposome in a very systemized release kinetic profile as you see in the simulation on the right side of that curve. But what is really remarkable is that we have virtually no release of treprostinil from the liposome in the upper respiratory tract.

And the reason why is because there is no involvement with gas exchange, and therefore, there is a low concentration of carbonic acid. And as such, there's trivial release of treprostinil. And that would tell you, and we can hypothesize when we license this drug that as a result, we think and we should see that we have minimal amount of throat irritation, and we have minimal amount of cough, and we maximize our tolerability profile of the drug.

And Dr. Restrepo will share the data about the results of that. But how do we inhale the drug? And we've spent, I would argue, the last 1.5 years really optimizing the device to our formulation to maximize and improve deliverability of the drug and to ensure that the patient has a good response, and this is very easy to use. And I'm proud to say that we have partnered with Philips Medicis to bring forward with you what I believe is a very novel and exciting nebulizer, which is known as the FOX vibrating mesh nebulizer. This is breath actuated. It's handheld, as you can see in this picture. It's battery powered, and we are convinced that it's the best device to maximize the performance of L606 in patients both with PAH and with PH-LD.

You can see the older technology to the right. And let's just be honest, there's no comparison here. This device here, if you look at it in my hands right now, the base unit is about 2/3 the size of your iPhone. This weighs about 128 grams or a little less than 0.3 pounds. You can hold it with 3 fingers. It contains 4 different parts. It contains a base unit. This is a plastic disposable mouthpiece. This is the actual mesh nebulizer that sits on top, you set it in. You can't see here, but there's a little hole or like a neck.

And we use what's called blow field seal ampules to deliver treprostinil, our L606 formulation of treprostinil. As you know, every eye dropper that ample has a little neck. You stick the neck right into the hole, you squeeze it in, you cover the cap and you turn it on. There's no liquid in here. So you'll see 2 lights. The first light you'll see is a green light that tells you it's on. And then when it finishes, it will turn orange and beep and say there's no more liquid. Now some will argue, well, why do you have such a long nose, not my Indian nose, but this nose here. This actually is very purposeful. This is because in order to see the light, you need to have a distance from your eyes to the actual frequency of the light. This is very important that the patient gets positive affirmation that they're taking the drug.

The device will sense the patient's inspiratory flow and we will guide them on how to breathe in and to set them at a continuous inhalation time, and then they will exhale into the ambient air. As you can see, we use a very high concentration of L606, where our volume are less than 0.5 milliliters or 500 microliters. Now the total nebulized time is going to be around 1 minute, inclusive of inhalation and exhalation. Now I've been a practicing pulmonologist since 2005. I've never seen a nebulizer that can deliver so efficiently and effectively and in a manner that we allowed for portability as well. This obviously can be put into your pocket and taken where you need to.

So let's get into the kinetic profile of our drug. So we did a Phase I healthy volunteer crossover study using single ascending dose. We first treated the patient with 54 micrograms of Tyvaso, and then we crossed over to 51 or a comparable dose of L606. And you see 2 things. One, our AUCs are comparable. with a single dose. But you see one key signature here, and that's our Cmax. And our Cmax is sevenfold lower than what you would get with a single dose of Tyvaso.

And why is that important? Because we know the systemic side effect profile of virtually most drugs is based on your Cmax. And while it's -- while the liposomes, we believe can protect the throat and throat irritation, we want to further offset headaches, diarrhea, jaw pain because we want to titrate this drug even higher. So we needed 2 things. We needed great tolerability in the oral pharynx and the throat and the upper respiratory tract, and we also need the systemic tolerability to be robust. And what was really remarkable about this study is that we right away knew we had the right tolerable drug because in a healthy volunteer with a single dose, 66% of the patients with Tyvaso complained of a cough and 1% or 8% of the patients with L606 complained of a cough.

So we already knew there was a tolerability profile difference. But how does this look when you actually take it twice a day? As you know, 4 times a day inhaled treprostinil short-acting is in the market, both with -- inclusive of YUTREPIA, and we understand the pharmacokinetics very well. And as Roger said, we solved many problems, but one thing we haven't solved is dose frequency. And again, creating that twice-a-day profile is so critical. You can see here, we used the 102-microgram L606 twice a day in the simulation.

And when we look at this from a 0 to 12-hour AUC and a 12 to 24 AUC, this is the signature that I talked about. We talked about creating a steady-state kinetic profile similar to what you can do with an infusional and do it in such a way that the patient doesn't feel the ebbs and flows of the drug leaving their system or adding on to their system, minimizing the peak and trough, limiting the cross tolerability as you go up higher, okay? This is what we're aiming to do. So it's a pleasure to give the next speaker an introduction. This is Dr. Ricardo Restrepo from the University of South Florida. He will tell you about our open-label study with L606.

Okay. Here we go. So thanks, Rajeev. Good try with rolling the as, Roger, the same. My name is Ricardo Restrepo, pulmonary doctor at the University of South Florida, Director of the Pulmonary Vascular Disease Center. for the last 11 years. So my experience is not as robust as my prior speakers.

But I think those 11 years have allowed me to see a little bit more than 1,000 patients currently in our center with the forms of pulmonary hypertension and our certified ILD center carries more than 2,500 patients currently, which have allowed us to participate on most of the studies with all the type of prostacyclin and lately on all the studies with inhaled treprostinil. So I can say that it's very honoring to be witnessing the evolution of inhaled treprostinil. And I need to thank Roger, Rajeev, Jason and the Liquidia team for bringing me here to present to you the clinical data from the U.S. open-label study using treprostinil liposomal inhalation suspension.

So this was a prospective open-label study to assess safety and tolerability on patients with PAH or patients with PH-ILD. To do that, we enrolled patients on 2 cohorts. The Cohort A were patients with PAH or PH-ILD who were transitioned from stable doses of Tyvaso to a compatible dose of LLC-06. Cohort B were patients with only PAH who were naive to prostacyclin and they were initiated on the compound of L606. The primary safety endpoint was defined as any incidence of treatment-emergent adverse event at week 48. And we also wanted to explore some exploratory endpoints defined as the change at the peak and trough of the 6-minute walk at week 48.

And we wanted to hear the satisfaction of patients who were transitioned from Tyvaso using the treatment satisfaction questionnaire medication also at week 48. Most of the patients were able to be evaluated at 48 weeks. We enrolled 28 patients initially. 4 of those patients needed to be excluded from the study, one of them due to protocol violation due to the use of illegal drugs. And the other 3 were secondary to adverse events that I'm going to explain a little bit better in a later slide. So we were able to complete the analysis at week 48 for 24 patients.

Here, you can see the basic description of the demographics, and we are pretty well versed reading statistics or numbers like this. But I just want to point a few key information of these baselines. And the first one is the age. In our overall population, the age was 61. And 61 seems to be a little bit on the higher side of the age on the newer studies with inhaled treprostinil, but it's consistent with what we see in our center and which has been reported on the major registries for pulmonary hypertension and pulmonary hypertension in ALD.

The vast majority of them were female. And I have to say that it's really important to note that these patients were prevalent diagnosed with pulmonary hypertension or pulmonary hypertension in ILD. That means that they were diagnosed with a median of 6.5 years of diagnosis when they were enrolled in the study. And this is going to be important in a subsequent slide that I'm going to talk about. It's also important to mention that the vast majority of patients in PAH on the Cohort A, 17 out of the 18 or 94% were pretreated with 3 therapies.

One was the inhaled Tyvaso that they were transitioned from and the other 2 were therapies with PD-5 or receptors. Out of the patients with PH-ILD that were transitioned from Tyvaso, 80% were on dual therapy. They inhaled prostacyclin or the Tyvaso and PDE5 inhibitor. And as Regan mentioned, we have evidence that PDE5 is a medication that have a positive impact and clinical impact on patients with PH-ILD.

As far as the functional class, we saw basically what we saw in all the studies. Overall, patients were functional Class II, 55% of them when compared with 44% in functional Class III. Again, this is a spot with all the data that has been reported for patients with PAH or PH-ILD. Here, I'm going to point to really something important in the clinical base characteristics on our population. And it is that overall, the patients who were able -- at baseline were able to walk 395 meters. Remember, these were patients that were prevalent and these were patients that were treated with 3 therapies for PAH and 2 therapies for PH-ILD.

The mild elevation on the proBNP of 168 in the overall population speak itself of the same. They were prevalent patients, and there were patients that were treated with multimodal therapies as a baseline, which is not common -- it's very common to see on patients who are well treated and in prevalent disease. If I can reinforce something really important measures today is this slide. L606 was very well tolerated with no treatment-related severe adverse event. That means that in overall population, 89% of them report any treatment-emergent adverse event. This is pretty common. We see this. All the studies report very similar numbers of treatment-emergent adverse event. But only 10 of them or 35% of those patients were treatment-related TAEs.

Also, it's important to note that there was no treatment-related severe adverse event. Only 1 patient on the group of PAH from the Cohort A lead to the treatment-related adverse event lead to a diminution of the dose. There was no death on the overall on the group of that we study. And there, I can explain the treatment discontinuation of those -- the 3 patients that I referred before. One patient on the group of PAH from the Cohort A developed shortness of breath, which was mild in nature, and it was stopped around 28 days from the initiation of the LC-06.

One patient on the cohort 8 with PH-ILD after 259 -- and this one was my patient, 259 days after the introduction or the treatment with LC-06, the patient developed hypoxic respiratory failure that was severe. It was felt to be related to a worsening or an acute exacerbation of the interstitial lung disease and that exacerbation lead the patient to lung transplant. As a consequence, he was excluded on the study.

Only one patient on the PAH Cohort B was excluded, and it was associated to a chest tinness sensation really soon after 8 days after initiation of the AL-606. And we believe was associated with bronchospasm. The patient had history of asthma and it's pretty well known, even though it's rare, but it's a very well-known side effects of any of the inhaled treprostinil. And as I said, no deaths were reported on our group of study. This slide is to analyze the doses that the patients were able to be reached when they were medicated with ALC-06. Remember, for patients on the Cohort A, those patients who were transitioned from Tyvaso, there was no specific instruction to titrate the medication.

That titration was done solely on the estimation from the principal investigator depending on efficacy and tolerability. For patients in the Cohort B naive to prostacyclin, they started on LC-06 and the titration was done based on efficacy and tolerability. So on the left of your screen, you can see the numbers at week 12.

And as Regan explained, at the left of the graph, you're going to see the median dose -- sorry, the median dose of the LC-06. -- and on the right, the compatible dose of the Tyvaso nebulized given 4 times a day. So at week 12, our patients were able to reach 169 micrograms, which is equivalent to 13 breeds 4 times a day of the Tyvaso nebulized. On the right, our patients were able to reach 229 micrograms of LC-06, which is comparable to 19 breaths per session of the Tyvaso. What is really more striking about this graph is the fact that on week 12, you have 31% of those patients reaching more than the comparability of 19 breaths of the inhaled Tyvaso 4 times a day.

And on the right, you have close to 30% of those patients reaching more than 25 breaths per session of the inhaled Tyvaso. So very significant higher doses than what was recommended at the point of the study of 9 to 12 breaths per session of the Tyvaso, very significant higher doses. LC06, you can see here, was very tolerable. Out of the whole cohort, 9 patients develop cough, 32%.

Remember, when we are talking about inhaled treprostinil or inhaled prostacyclins, we are talking about cough like if it's not going to happen, but when. With LC-06, that seems not to be the rule. Only 9% only 9 patients or 32% of those patients report cough as a side effect. And only 4 of them for 14.3% was thought to be related to the therapy. This is a very significant lower number to what we are used to see on the research studies and what I see in my practice. Out of those 4 patients, all of them were described as a mild. Again, this is a very lower number to what we are used to our practices treating patients with PH-ILD or PAH that are treated with inhaled treprostinil.

And I have to point here as well that there was no report of systemic prostacyclin side effects like headaches, diarrhea, muscle aches. And that probably was explained because of the seven folds lower Cmax that Rajiv eloquently speak before. So that lower Cmax concentration is allowing us to see that there was no systemic side effects associated with the use of this inhaled prostacyclin. When we went to analyze our exploratory endpoints, most of the patients were able to maintain or improve the 6-minute walk over the 48 weeks of therapy.

Out of all participants, so 24 at week 12, there was an improvement of 17.2 meters. And at week 48, it was 22.5 meters. I want to remind again, these were prevalent patients. These were patients that were treated with multimodal therapies for PAH 3 therapies for PH-ILD2 therapies. So showing efficacy, showing improvement on the 6-minute walk is way more difficult on this type of populations than patients that are not treated.

When we analyze patients on Cohort B, patients who were naive to prostacyclin and were given the LC-06, at week 12, there was an improvement of 29 meters of median change from the baseline. At week 48 was 22. Again, stating that even on this prevalent population pretreated, we are still able to -- and capable to show an improvement on the 6-minute walk from the baseline. When we analyze that endpoint between peak or the difference between peak and trough walk distance, we found that at week 48, the trough change on the 6-minute walk was 24.3 meters and peak was 22.5.

This is probably a function of that steady state over 24 hours that Rajiv explained in the prior slide. That steady state of exposure over 24 hours is what is making no difference -- virtual no difference between the trough and peak 6-minute walk difference. Remember that Tyvaso was approved based on a peak difference -- placebo-controlled peak difference of the 6-minute walk. But when they analyze and when we analyze the peak trough difference, there was a numerical gap there. There was a difference between peak and trough, again, probably related to the pharmacodynamics of the Tyvaso. Here, we are showing the individual data of all the patients with PAH in the right and PH-ILD on the left.

80% of them had any degree of improvement. 30% had that magical number that Rehan showed of 30 or more meters on the 6-minute walk, which has been associated with positive outcomes. There were a few outliers. As any study, there is always a small cohort of patients that are going to show improvement on the 6-minute walk. One of them on the PAH, that one that decreased the 6-minute walk by -- a little bit more than 100 meters was a patient that had a knee surgery weeks prior to the 6-minute walk.

On the patients with PH-ILD, 3 out of 4 show an improvement more than 60 meters over 48 weeks. And again, the small number of patients that are going to show no improvement. But this is the individual data. So you can see that at least 80% of them show any improvement or maintain that difference on the 6-minute walk. Then we went to analyze the satisfaction scores. And it's not surprising that almost all the subjects have a global satisfaction because they went or the transition.

Remember, this was done only on the transition of patients from Tyvaso. But when you go from 4 times a day to 2 times a day, you are going to find -- it's not surprising to find an improvement on the satisfaction score. They were positively influenced by the effectiveness given the increase on their 6-minute walk. There was definitely a less presence of side effects. So that's why this questionnaire is not a surprise for anyone. There's an improvement when the patients were switched to the ALC06.

And then here, you can see the summary. You can see the conclusions of my presentation. To be honest, to me, it's very exciting to see and witnessing firsthand the evolution of the inhaled treprostinil. The red definition of inhaled treprostinil is put in here with this study where we went, as we said, from a continuous IV infusion for patients with PH to have the availability to provide an inhaled treprostinil formulated only twice a day.

And that twice a day, allowing us to maintain levels 24 hours, constant levels 24 hours, minimizing the gaps between the walk distance at trough and peak is very exciting. And it's more exciting to see a signaling towards efficacy at 48 weeks with improvement on the 6-minute walk with minimal side effects. Only 14% of the patients were having cough associated to the therapy.

Remember, cough on our inhaled therapies is not if they're going to happen, but -- with ALC-06, that seems not to be the rule. And this is my personal opinion, a pharmacology, a medicine with this pharmacokinetic profile, this safety profile and this efficacy to me, seems to be the perfect companion to the new anti-proliferation medications that are being developed in the quality. And with this, I'm going to end my talk and reintroduce Dr. Sagar to talk about the new study.

Thank you, Ricardo. So it's my pleasure. As you can see, a lot of work has been done at Liquidia to not only advance YUTREPIA to approval for patients with PAH and PH-ILD, bringing what I truly believe is a revolutionary PRINT formulation to maximize and set a new standard for how we treat patients with inhaled treprostinil, higher doses, earlier onset and to get to levels that I think historically since 2009 has never been done before.

And as Dr. Channick pointed out, the results of that will have to be shown with long-term data, but I think we're taking the right steps forward. The next steps that we're taking in this frontier is to initiate the RESPIRE pivotal study, which is our global placebo-controlled Phase III study in patients with PH-ILD using L606 or our liposomal suspension formulation for inhalation. To get there, I've already shown you that we've completed our Phase I study.

We have plenty of ongoing safety data, as Dr. Restrepo just showed you from our U.S. open-label study, highlighting, I think, a world-class tolerability profile. And the next step is now to show how this drug performs in patients specifically with PH-ILD on a global basis. This will be a parallel design study, and this will be performed in at least 20 countries or more. As you know, YUTREPIA and other forms of inhaled treprostinil are only approved in the United States. Some countries do have approvals for Tyvaso.

But in general, across the globe, there's a significant unmet need, and we have spent at least a year, if not longer, talking with practitioners, explaining to them about the study. And I can tell you, the demand is tremendous. It's going to be wonderful for patients to showcase this drug. The Phase III design, as I stated, will be a 1:1 randomized placebo-controlled double-blind parallel group study. We will enroll approximately 344 patients in over 120 sites across the globe. The patients will be given L606 twice a day or placebo twice a day. The primary endpoint will be a change from baseline in peak 6-minute walk at week 16. But the secondary endpoint is critical.

We need to show durability of that response. It's something that is lacking in the literature. It's lacking in Tyvaso. We try to show it with YUTREPIA with an open-label format with ASCEND that Rajan Sagra just showcased as well. But we want to prove our durability. We will also look at a change in -- from baseline in trough 6-minute walk also at week 16. I think we feel extremely confident given our pharmacokinetics that, that gap will have narrowed to a minimal gap, but we will showcase this.

And of course, it is very important to show a time to clinical worsening in the benefit of L606 during this randomization process. Those endpoints are the long-term portion of the 24-week study. After 24 weeks and the blinded portion, patients will be allowed to enter into an open-label extension period as you see in the diagram below. We will look at exploratory endpoints, including hemodynamics. So one thing I think that there is a paucity of data is in the inhaled treprostinil world is in terms of before and after hemodynamics, specifically in PH-LD.

I think this is a high priority for the study. We need to understand that the drug not only works on exercise capacity. We need to know that it actually improves time to clinical worsening, but we need to explain how we're getting there in terms of the hemodynamics to the practitioners so that they can put the whole story together. We'll also be looking at several other data points as we point out over here. To better explain our stratification methodology, patients will be stratified using 3 methods.

One, we will be allowing PDE5 therapies as stated above. There is real-world use of this. We've come to know that in certain areas of the world, this is the only option. And of course, we understand that and the patients can be on a stable dose of background PDE5 inhibitors. This is, for the most part, Sidenofil. We will put a cap on the amount of patients that have this. We will also stratify for baseline 6-minute walk between 300 meters greater or less than that number.

And finally, we will stratify it based on CPFE and PH-ILD etiology. You can see here is that in the black shows at what point the patient will be either contacted by the site or come into clinic. And you'll see 2 very -- you'll see 3 points that are early, 2 weeks, 4 weeks, 6 weeks. The 2 and the 6 represent phone calls that we are calling patients -- not we are, the sites will be calling patients to determine their AE profile to remind them of dose titration. We will be providing guidance, which is critical. and to ensure that they're not having any unmet adverse events and also to remind them about their upcoming visit and to make sure they're otherwise in good health. This is really key.

When we designed the study, we do not only seek the opinion of key opinion leaders throughout the globe, but we also spent an exorbitant amount of time with the very coordinators and nursing staff that manage these patients in a clinical study to ask them how to make sure the study is run robustly, is easy and fast for them to do and to do it with a high-quality standard. And I can tell you, this is going to be one of the main reasons why the study will, without a doubt, in my mind, will be very successful.

Some of the key eligibility criteria is the CT scan of the chest. All patients will be required to have a high-resolution CT scan of the chest. That will be performed within at least 12 months of screening. People can ask, well, why don't you just get a new CT scan on everyone. There's actually very rigorous rules in certain countries about radiation safety. But as long as we can access that scan through a virtual portal and review the scan, that would be okay. I anticipate that the majority of patients will actually have a new scan coming into this study.

That scan will be blindly reviewed by a minimum of 2 expert ILD thoracic radiologists and a third if there's a discordance in their opinions. They will have to have evidence of fibrotic interstitial lung disease, first and foremost. The second thing is that emphysema plays a big role in this disease. As you know, in the INCREASE study, our lessons learned is that the combined pulmonary fibrosis emphysema patients may have a robust effect, but they're complicated and they're heterogeneous. And we wanted to make sure that the total lung emphysema must be less than or equal to 15%. This will be adjudicated by the blinded thoracic radiologists who are blinded to the clinical diagnosis and any history of the patient. So this is very critical in the study.

Finally, we do allow background antifibrotic therapy. And when we designed this study, we did anticipate that the PDE4 inhibitor that was recently approved would likely have been led to approval. We actually brought that in. So that would be allowed in as well. So the anticipation is that there will be patients based on real-world data, depending on where they are on the globe that are likely to be on antifibrotics.

And as I already stated, they will -- they can be to a limited degree with a cap on background PDE5 inhibitors. So at that time, I appreciate your time. I think that's the end of our presentation, and we'll move on to a question-and-answer discussion session.

Thanks, Rajeev. Okay. So we're going to ask our guests and Roger to take a seat. I'm going to play a little bit of the MC. I'm Jason Adair, Chief Business Officer. We have some other people around the room that will allow you to ask some questions. But if you saw our press release, our earnings call is next Monday.

So we are not answering questions around revenue today. We're going to focus on the R&D Day that we just did. And some of you have asked some legal questions. If you have those, you can ask me after. We're not going to answer those today. We do have the call next week.

The last thing I'll say is we're going to take some time. The questions are free to be asked by anyone. At the conclusion of this, we will have a nice social, and we also have access to the balcony outside on this nice beautiful day on this building. So with that, to get the questions going, I'm just going to call out a few people, Julian Harrison from BTIG, if you have a question.

With YUTREPIA down the market for about 5 months, I'm curious if you could talk a little bit about the real-world feedback as it relates to, let's see, titratability, cough profile, also the presence of company-sponsored data in PH-ILD informing use.

Rich?

Yes, the titratability, and I don't have a number count, but we have a lot of patients on it right now. I can tell you that certainly in the PH-ILD, I can give you kind of an arc of how it went. So we had, obviously, Tyvaso nebulizer and then we had -- we had a number of patients on Tyvaso nebulizer with PH-ILD. Then when the Tyvaso DPI came out, we tried switching a bunch over.

And I mean, nothing is 100%, but the vast majority really had trouble with it even at low doses. And 100% can attest to the cough. I know there's -- I mean, they had to stop. They said, I can't do this." And so it's gotten to the point then where then we would go to -- then we had YUTREPIA DPI and it was clearly better tolerated. So to the point where before we had YUTREPIA, I don't even start Tyvaso DPI on an ILDPH patient. If they'll either go a nebulizer or now with YUTREPIA they get that.

And our ability to titrate up has actually been quite simple. I mean I haven't -- and Raj can attest personally haven't really had issues with titratability in our -- either our PAH or our PH-ILD group with the drug. to sort of run it right up pretty quickly. I don't agree.

I completely agree with Dr. Channick. In our program, in our center, we have studied a significant amount of patients on YUTREPIA. And to my knowledge, I don't have any of the patients that have been stopped of the therapy because of side effects or cough.

Remember, as I said, with these therapies, cough is not if they're going to happen, but when or if they are going to be severe enough to stop the therapies. I haven't stopped any of the therapies with YUTREPIA. And I say an anecdotical case that I call my colleagues, I had one patient that by mistake, went from the initial dose of 26 micrograms.

He jumped all the way to 10 5 micrograms, skipping the middle doses. By surprise, and this is a patient with PH-ILD middle 60s, no side effects, only mild cough after the therapies. anecdotical case, but I think it represents how tolerable the medication can be.

Excellent. And then a follow-up, if I may. I heard a few times the potential benefit of YUTREPIA delaying the progression of disease in PAH, the need of parenteral treprostinil. Before YUTREPIA, how achievable was that?

And also just curious how easy is it to identify those patients where you could say, okay, this patient would have progressed most likely if they want something else.

Yes, it's a great question. I think that the real-world data from that Shelly Shapiro paper where they looked at that specialty pharmacy data of those 5,000 patients, I think drawn over about 9 years. What they were really asking there was this was a nebulized treprostinil. If you look at the patients who got to the higher doses, did that in real-world data, again, with all the caveats of real-world data, 5,000 patients, they really showed in that study, right, that there was a mortality advantage that was significant for patients who got to higher doses and that they had a delay in their transition, having the need for parenteral therapy.

And I mean that was pretty -- I mean, again, real-world data. This is not blinded, it's not placebo-controlled, et cetera. But it really brought to the light that the molecule works. The question is, can we get it up? And can we do it -- can we get to the doses that need to be gotten to? And if you can do that, I think it's pretty clear that you can avoid or at least delay going to parenteral therapy.

And I say that because I think some of the patients we have now are doing quite well. Does that mean that they'll never be on parenteral therapy? I don't know. Now we have sotatercept. So there's that playing into all this. But the fact of the matter is that we certainly see the delay. And the only reason we can see that now with YUTREPIA is because we're actually able to get to comparable doses of nebulized treprostilate are much higher.

And I just want to echo what everyone else said, I think I really -- in ASCEND, obviously, it was an open-label study, but this titration -- uptitration was seamless. I mean it was very different. And if it wasn't me saying that our staff, right, our study coordinators and our staff and everyone that runs the study and even the specialty pharmacy, everyone that's interacting with these patients, it's a consensus, right?

I mean it's anecdotal, but it was a consensus and ASCEND. And that only got propagated once the drug became available and FDA approved. And as mentioned earlier, in the last 5 months, we've used this product, YUTREPIA in a considerable number of patients. I think our experience is very skewed to PH-ILD because we see a lot of PH-ILD.

So we can be very confident in our experience over the last 5 months, which only, I think, sort of upholds what we saw in ASCEND.

Julian, one thing I'd add, Tyvaso was always viewed as treprostinil light, and it was used as a sort of temporary bridge until you needed something that was more burdensome but could be titrated even with severe consequence. So I think what YUTREPIA is doing now is really changing -- flipping that script completely to say you can now start on an inhaled formulation that has durability and longevity because you can titrate it to effect.

What really pleased us is now we're seeing oral transitions. We're seeing sotatercept added. And as they de-intensify or deescalate the parenteral therapy, they're keeping those patients on a prostacyclin because it's a critical pathway to maintain, and they're using YUTREPIA to do that because they can titrate up, take them off of the parenteral and move them up on an inhaled.

So kind of the thing that Rajeev and I dreamed about when we start -- when we talked to Rajeev about hiring them was could we have a one-size-fits-all kind of therapy that was really a game changer. And I think what you're starting to see in the field in the commercial space is that's actually bearing out to be true.

Julien, I just want to add one thing to that. The -- we have recent experience, Rich and I with 2 patients, which -- I come from -- our program with the PH-ILD patients because we're transplant bound is really -- was very aggressive in using parenteral therapy. This is what we've been doing for years and years.

The idea that we could take a patient who, let's say, with PH-ILD ended up in the hospital decompensated, let's say, because of their pulmonary hypertension, they would go on parenteral therapy because they were sick enough to require that, and they were very sick in the hospital in an ICU. We have 2 patients recently who he actually did that protocol with because they were sick enough to be in the hospital.

We initiated the parenteral therapy. We had recovery. But in the transition to going home, we actually transitioned 2 patients recently acutely from parenteral therapy after we had salvaged them with parenteral therapy and transitioned them to YUTREPIA for discharge.

And we were successfully able to do that in 2 patients. I mean, honestly, I would -- I have never -- I would never have imagined that we could do that, but we were able to make that transition successfully. And we've only tried it in 2 patients, but we're 2 for 2. So...

My idea and you were...

It was his idea. And I was skeptical. I was I don't think it. I was very skeptical and it worked, and it worked beautifully. I mean we only have about 3 to 4 months out from both of these patients, but really, everything looks quite good. And we're still able to titrate up the YUTREPIA as an outpatient, obviously. So that was very exciting for me because we've had this -- it's really a shift in our sort of a paradigm shift in our program, hopefully, the beginning of one, which is really great for the patients.

Thanks, Dr. Sager. I think, Corey, you had a question right here.

Historically, we've seen this negative stigma around nebulized formulations primarily due to the treatment burden of carrying around and using and cleaning this very large nebulizer device. Thinking about the new handheld nebulized device with L606, how amenable do you think your patients would be to a more modern approach versus some of the DPI options that are available or might available?

Yes, it's a great question. I mean it's all relative. So and we're all lung doctors, so we use a lot of nebulizers, not just for this disease, but there's a whole group of patients, maybe the already that actually prefer the feeling of a nebulized treatment. I mean we have like asthma patients, COPD patients that are convinced that they're not really getting the drug unless they're nebulizing it in there.

And like -- and we hear that all the time, and they're almost insisting on a nebulizer. It's a different story because there, they're just sort of plugging it in. It's not a thing you put together. So I think nebulized by itself is actually -- patients kind of like it in a way. So if you can sort of mesh -- pardon the pun because it's a mesh, but if you can mesh the feeling of a nebulized treatment along with a convenient device, -- that's not a big pain to put together.

Then I think it would kind of be perfect. I mean I don't know a lot about this device, but it looks pretty simple and like small. And so I think -- I don't think that, that device is going to limit the convenience for patients, but

We'll see.

And I think the time to administer is important. So a minute or less, and I think hopefully, we can improve upon that over time.

So if I can echo what Dr. Channick is talking is we all know those connotations of the nebulized therapy. But in the United States, the population of PH and PH-ILD is an older population. So in my experience, in my center, we haven't found much difficulties with the nebulizer.

Actually, when we were enrolling patients on the Breeze study transitioning from the nebulized Tyvaso to the DPI powder, I had a lot of difficulties transitioning patients from the nebulizer where patients will come to me.

Actually, one of the dropouts on the study was one of my patients that was not feeling the medication going in with the inhaled powder and he wanted to come back to the nebulizer. And this is the big -- I can say, a substantial number of my patients are very reluctant to switch to the inhaled powder because of that reason.

Yes. But just to add to that, having said that, I mean, the Breeze study is pretty clear that patients were very happy to transition from a nebulized therapy to a DPI. So -- but the reason is why, right? Is it because is it nebulizer versus DPI? In other words, that's the advantage. That wasn't the advantage. If you talk to the patients, it's very clear that this was a convenience. It was the ability to carry it around, the inconvenience of all that.

That's really what drove the satisfaction piece, if you will, in that transition study. It had nothing to do with, oh, I really prefer getting a dry powder inhaler as opposed to a nebulized device. In fact, I would echo what Rich said earlier. I think when patients -- in the world of COPD and asthma, nebulization, they love nebulizing. When they're not feeling well, everyone uses the nebulizer. Why is that?

You could argue about why exactly that is. But there -- it's not -- the nebulization piece itself in and of itself, the nebulizer versus the DPI is not the -- it's not that DPI is better. It just is more convenient. I actually think when I talk to patients about nebulization just in the world of pulmonary hypertension, that was -- they actually enjoy or they're comfortable nebulizing treprostinil. That was never an issue. And certainly, in PH-ILD, this is why we had so many -- so much difficulty transitioning to the DPI.

It was just a convenience factor. Maybe I can just add a little bit. I think we have to be careful not to compare COPD and asthma. There are COPD and asthmas here in New York City that are walking amongst you all day long, and you would never know that. The average patient with PH-LD, about 75% are pulling a tank of oxygen. The majority of patients with pulmonary hypertension, even the prevalent ones are on multiple different drugs. They are shorter breath. Their functional classes for the most part, impaired. It's always going to be 5% that are extremely functional and active.

So take those apart. These are -- this is not about convenience for a patient. This is about efficacy and tolerability. However, to your point, the nebulizers of the past that have been brought forth in pulmonary hypertension have been limiting. There are multiple parts. They're not portable. They're complex. They take a long time. And when you have to do that 4 times a day, that's a problem. We strongly believe that we're solving that issue. We've spent a lot of time trying to figure out the best device that is associated with L606 to maximize performance.

As I showed you, it's effectively 4 different parts if you include the cap. Maybe that takes 20 seconds to assemble. You push the button, it turns on, it takes you 1 minute. So in general, you wake up in the morning, you reach over, 2 minutes later, you've taken your med. You go to sleep, you reach over, you go to -- you take it, you take your meds and you're done. If you can do that in a manner that is -- limits the side effect profile but maximizes efficacy, you have the winner.

Thanks, Raj. Before we take our next question, I'll just remind we have people listening. So if you're on the webcast, you can also ask a question through the platform. So I think we'll go back to Serge right there with the next question right behind you.

Thanks for hosting us at this great venue. Dr. Channick, in your presentation, you talked about that these new delivery methods like DPIs and the next-gen inhalers would allow for better compliance and higher dose levels, which should eventually lead to improved cumulative effects. Maybe if you can just expand on what those outcomes you'll be looking for, for improvements and whether you're already seeing them now with YUTREPIA usage.

Yes. That's a really great question, very, very insightful and something I thought about for a while. I think we all have. So I'll just set up really quickly with sort of from the beginning, actually, the very first drug approved, ostensibly some people think is still the most effective drug, which is continuous infusion of epoprostinil.

And maybe continuous treprostinil is similar. Having done this for 30-some years, I think my colleagues would attest that we still have felt that there's something about a continuous infusion of a prostacyclin over a year. So it never stops that gives an efficacy that we haven't really been able to replicate. And that's why in every algorithm, if you're failing everything else, you go on to parenteral prostacyclin. Why is that?

I mean, why is the same molecule given a different way, the most effective therapy. And I don't have an answer to that. I have some hypotheses. I mean, maybe you all thought about this. It's -- if you're giving it continuously, why is it so much -- why does it seem to be better than giving it intermittently? And that could be a couple of reasons.

And my colleagues alluded to this. It could be the exposures and the levels that you're getting, the exposure over 24 hours, even when you're sleeping. -- not over hours, days or weeks, but years that can have effects that go well beyond just like being able to walk further in a 6-minute walk test.

We've all seen, for instance, that patients who get continuous parenteral prostacyclin over weeks, months and years can, in some cases, normalize their hemodynamics, normalize their echoes even to the point where you can deescalate therapy. And that's something that we haven't really been able to replicate.

And so what I hope is as we develop -- and it's a hope, but I think there may be a reality there, as we develop, let's say, a non-parenteral drug that's given intermittently but has a pharmacokinetic profile that one gets exposure similar to what you might see from a continuous infusion and you can get to a higher enough dose that maybe we will see those cumulative effects and we'll start to see this so-called normalization that we see in so many of our sickest patients who get continuous infusions of prostacyclin.

That's, I think, where we all went ahead and want to head, and I'm optimistic and Rajeev with L606, for instance, that, that will get us closer to that point.

Thanks, Dr. Tan. Do you have a question, just go right there behind you, Wilson.

This is Bhavin Patel filling in for Jason Gerberry from Bank of America. Just 2 questions from us. First, can you help us quantify and speak to what the skew towards PH-ILD over PAH has been with YUTREPIA in your clinical practice? And do you see scaling up to a higher treprostinil dose equally beneficial in both indications? Or is it more pronounced benefit in one patient segment over another?

And then on the L606 pivotal trial design, can you help us understand the rationale behind the 3 patient stratifications and how you think that can help differentiate L606 from nebulized Tyvaso? Will this one trial be approvable for both PAH and PH-ILD? And what feedback have you gotten from the FDA so far?

Okay. So I wrote some notes down because that was a long question. So I think the first question was around how they're using YUTREPIA in the split between PAH and PH-ILD. Yes, that's correct.

Yes, I kind of alluded to that earlier. Our experience, to be honest, is mostly in the PH-ILD space. That's where the bulk of our experience is. In the PAH realm, we've -- as I mentioned earlier, we just transitioned 2 patients with parenteral therapy to YUTREPIA, as I mentioned earlier, and we've had some oral transitions as well.

And then with our sotatercept starts, we've sort of started sotatercept and then attempted to wean off the parenteral and then cotton off the parenteral by using YUTREPIA in that context as well.

Yes. If I could just follow up, like when you say most, can you help quantify 2/3, 1/3? Like how -- what's the split look like between...

I would say [Audio Gap]

Increasing the doses above the old recommendation of 12 breaths of the Tyvaso, we were escalating to even way higher doses before because we saw that there is no ceiling on the effect of inhaled prostacyclins with relatively better tolerance when compared with the other forms of prostacyclins.

The efficacy is there, the durability is there, the tolerability is there. And now starting to use YUTREPIA, we see a way more tolerability when compared with the other forms of inhaledpstinil.

Thank you. So I think the second part of your question, Pavin, was related to the L606 pivotal study and about the risk stratification as well as what was the second part, Pavin?

Yes. And then having the one study being approved for both indications, whether or not that's possible.

Yes. So just regarding the risk stratifications, I mean, every study uses stratification methodologies. We internally deliberated on what would be the best stratification methods. We also took heavy advice from our key steering committee members.

In that regard, one thing for sure is that we're allowing -- as we spoke about PDE5 inhibitors, we want -- stratification methods allow patients to be appropriately placed into placebo and treatment arm at equal distributions, right? So that protects the study in that regard. So you're not overexposing one sort of population to the next unfavorably or favorably to either treatment modality.

In regards to combined pulmonary fibrosis emphysema, as I stated, this is an important group of patients. I mean, the majority of -- with the advent of CT scans and especially with lung cancer screening methodologies, especially in the U.S. and worldwide, the use of better and better methodologies of CT scanners are picking up a lot of emphysema. ILD tends to be more akin to an older population that usually has -- that are usually former smokers. And I think that's well elucidated.

So making sure that we're not treating a different disease, i.e., overtreating emphysema, which we still need to think about. But in this study, we're trying to homogenize the patients to have ILD for the most part with the backbone of PH. So I think allowing those patients to come in, but allowing that stratification methodology to distribute patients to placebo and to L606 and equal distribution is going to be critical.

So we -- these are the 3 factors that we determined to be the most important. And as you know, any time you go above more than 3 stratification methodologies, it starts to hurt your statistics a little bit. It gets -- you start to waiver a little bit. So we wanted to keep the robustness of the study. We -- I think we highlighted, I believe, maybe a year ago or so that we had a Type C meeting with the FDA.

During that meeting, the FDA did indicate that the Phase I program, our open-label safety program in combination with a single phase -- placebo-controlled Phase III study. In this regard, they said you could do either PAH or PH-LD. We picked PH-LD for, I think, obvious reasons. We wanted to highlight the experience of L606 as best as possible against minimal background therapy. But that study when it reads out and shows a significant improvement in exercise capacity with appropriate statistical rigor that, that would be enough to allow for approval by the FDA for consideration for both PH-ILD as well as for Group 1 PAH.

Regarding the European agencies, we did align with the European agencies on the construct of the study. And of course, as you can see, that's why the study is more durable in its time frame at 24 weeks. So regarding the EMA, we've aligned on the protocol. We've aligned on the endpoints. And of course, the answer is, of course, we'll see when we reach the end result, and we'll have to see how the effect was for them to reevaluate that.

I think the only thing I'd add is the study is powered based on the INCREASE study. And my expectation here, if we can achieve higher doses, we can achieve better effect. So potentially, we're overpowered as is. So we should have a highly statistical finding if the drug works.

Just maybe I'll just add to that. I think one question maybe some of you have is, I think we set the bar pretty high with ASCEND on how we titrate. I think, hopefully, the data we showed you with the open label and the initial data shows L606 is a level above that in terms of tolerability.

One of the things that we spent a lot of time doing is titrating in a manner that we think will get us to the most efficacious dose possible to have the best chance to improve our primary endpoint. So I just want to point that out.

I think Amy, you were raising your hand right here Right.

Awesome. Just trying to make sense of the L606 data. I think a couple of things that stood out and understand small and open label, not controlled is there was a pretty big difference between mean versus median in the treatment-naive population. And you're kind of seeing mean go up between 12 weeks and 48 weeks and the median go down.

And then it looks like from the distribution data, the PH-ILD numerically looks better than PAH. So I just wanted to see how much of the study was kind of driven by some of the spottiness around baseline population? And is this kind of the study that you start to see that dose response exposure benefit versus Tyvaso?

And then if there's any comments you can give on the dose you're taking into Phase III in the titration regimen, that would be super helpful.

Yes, sure. Thanks for the question. So first of all, I think it's critical that, as you see on our slides that we showcase median. This accounts for the small patient population and the variability that you see with small patient. So those are the appropriate rules, I think, that should be highlighted. We provided the mean, obviously, to show the distribution, right, across the patient profile.

And I think highlighting is what you alluded to that there is a lot of variability in this population. It's -- there is a lot -- the PH-ILDs did end up doing well in the study. As Dr. Restrepo pointed out, we showed that 3 out of 4 walked more than 6 meters. What I can say is that when we look across if we try to parse out every single subgroup -- the 48-week peak walk improvements is roughly equivalent.

So if you just look at Cohort A PAH only, that walk distance is -- I think it's around 21, 22 meters. At 48 weeks, when you look at PH-LD, it is higher. But again, these are very small numbers as we go there. Regarding the -- go ahead.

Yes. And most were transitions. So they were on the background triple therapy, including a prostacyclin. We switched to prostacyclin. So you're driving to drive a benefit that's already been consumed a little bit before you even started them in the study.

So I think, again, all of that has to be sort of contemplated when you think about the data set. I think for us, we showed good tolerability. We showed balance in peak and trough. That's what we were trying to see is did the dosing regimen support what we wanted, which was you have a sustained effect.

If you look at the INCREASE trial, if you look at the original Tyvaso PAH trial, peak versus trough, there was typically a 35% diminution in the treatment effect. We didn't see that here. So that's what we wanted to convince ourselves that the twice-a-day regimen would hold patients up and keep them stable over the 24-hour interval.

And then for the Phase III dose, it looks like given your tolerability profile, you could probably push the dose up and even titrate faster. I'd love to hear the plans for Phase III.

Yes. I mean, again, it's a bit of an art. You're trying to do it at a pace to get the patients to the most efficacious drug while maintaining the tolerability profile. As we've heard, patients seem to be able with YUTREPI even can skip the intervening doses and go to higher doses.

I think with L606, we're going to be -- it'd be quite facile to get patients up to higher doses, which is why I said I think we'll probably overpowered because we've used the powering assumptions from INCRASE that's probably very, very conservative.

So while we won't go into the finite details of the study at this point in time, what I can tell you, as Roger alluded to, our interest is not 10 to 12 breaths, so to speak. That's 2009. 2025 and beyond is setting the bar at a higher level because as Rich -- as Rajan showed in the sent and highlighted in the INCREASE study, if you can get patients even as early as 4 weeks and optimize the dose and definitely by 8 weeks, that's the key.

And so the way we've designed the study is to maximize the dose titration to the maximum limit before the primary endpoint as long as it's tolerated, right? So that's the objective. And it's done in a very simplified methodology in the study.

Thanks, Raj. Thanks, Amy. So for the benefit of those on the web that have been submitting questions, I'll ask one from here. And this is for the physicians, the current treating physicians.

So I'll read the question. Given the product profile of YUTREPIA now that it's in the market, over the long term, how do you see it being used relative to the current inhaled products of Tyvaso and Tyvaso DPI?

I mean, I can't predict the future. I mean I can give you our own experience, and I think it sort itself fairly obvious. I mean I certainly think the ILD PH patients, we've gone pretty much solely to YUTREPIA based on that tolerability. we gave it the college try with Tyvaso, which has been around for a long time.

But I think the patients have spoken, at least mine have. And so I think that, that's what we're doing with that. With PAH, I think it's probably a similar story, but maybe a bit more of a wash. I can't say what the market -- other physicians will do.

But I would say that certainly, given the -- all the things that we've learned about and you've learned about the device itself, the ease of use, it seems to be the one that we're using overwhelmingly at this point.

Any more to add?

I will say to complement to that, yes, probably most of the ILD, PH patients are going to move towards neutropia. But having said so, pulmonary hypertension and ILDs are such a heterogeneous group with all the different types of ILD that who knows.

Maybe in the future, we're going to find that specific phenotypes are going to be more responsive to this therapy or this other therapy. I think it still is a little bit early to know also for patients with PAH. There is a huge variation between the phenotypes between the patients with PAH that we're going to start to find what is going to be the best therapy for those.

Having say so, what is common in all of them is the safety profile. If you are able to find medications that are safe, tolerable on these 2 populations, that is the medication that is going to be filling the profile of therapies for these patients.

Thanks, Dr. Repo. I'm just cognizant of the time. So I think what we'll do is we'll ask 2 more questions here in the room. We have plenty of access to people after this. I know Roger has some closing comments as well. So I don't know if anyone has a question they want to answer. All right. So there's someone Brian here. who's raising their hand?

Ben Burnett from Wells Fargo. Just a quick one on the FOX mesh device. Can you just talk about, given the formulation is a lipid nano particle, like is there any -- are there any differences in washing or maintenance that patients have to go through? And can you maybe talk about any kind of training or guidance that you gave patients in the initial study?

Yes. Sure. So the question was specifically about the FOX mesh nebulizer relative to the drug formulation with L606. So we've spent, I think, an exhausted amount of time working with our partner to ensure that the performance of the device maximizes the effectiveness of L606 -- as you know, a lot of mesh nebulizers have been problematic in terms of clogging, cleaning, et cetera.

One thing we found with this device in concert with 606 is that it delivers the device with excellent efficiency, the drug distribution of particles is exactly where we want to align. In terms of the simplicity of the device, just to highlight, if I take off the cap, this is really what needs to be washed. This is the nebulizer reservoir. So after each use, this will be rinsed. And this will need to be -- for the clinical study, this will need to be boiled at set intervals. But infrequent in that nature. And that's just to ensure that it removes sort of any potential deposition from the atmosphere as well as any particulate matter that may be on the actual mesh itself. In terms of the mouthpiece, this, of course, is disposable, but also does have to be rinsed.

As you know, people are placing this in their mouth, and we obviously want to make sure it's not getting infected. In the study, we have -- we are training sites a lot. Patient variability matters. This is global. We're trying to homogenize how the device is used, how it's cleaned, but it has to be done in a way that anyone, no matter where they are, where they're living, their social demographics can do with ease.

And so we spent a lot of time making sure that this device can meet that demand. We feel very confident that the cleaning of this device is not an issue at all. As you know, there was -- alloprost in the U.S. was used with the different the Neb was used, and that was extremely cumbersome, clogged all the time. But that also took 15, 20 minutes to nebulize.

So we're -- I think we're really excited about the performance and ease of use of this device and the cleaning is very simple.

I'll give you a follow-up there, Ben.

Maybe just one more question, Jason.

Maybe for the KOLs. For your PH-ILD patients, currently, what are you seeing in terms of the proportion of patients that are on nebulized versus dry powders currently in your practices? And is that changing? And how quickly is that changing? And a quick follow-up.

So the question was what's the proportion of patients that are currently with PH-ILD in our practices on DPI versus nebulized. Yes. So before the YUTREPIA product, we were -- as Dr. Chani had mentioned, we had tried to sort of convert everyone to the DPI or use the DPI out of the gate, and we had a lot of trouble with that.

So we basically before YUTREPIA, we were almost exclusively using nebulized Tyvaso or treprostinil. -- became available and our experience with the ASCEND and then our last 5 months, I can honestly say we were almost exclusively using the YUTREPIA as a dry powder inhaler. So our use of nebulized treprostinil is minimal, at least at UCLA. I think I can speak for our group in PH-ILD.

In PH-ILD, and that's same across the board across generally?

I think so. In our practice also at the beginning, for patients with PH-ILD, we start the patients on nebulized therapy. And once they reach a significant dose, we used to transition them to the DPI formulation. With the introduction of YUTREPIA and the data we have about safety and tolerability, we are studying more patients directly into the YUTREPIA inhaler than nebulizers.

Okay. And then maybe just very quickly on ASCEND. It looks like there's kind of a natural separation at the 318-microgram level, a couple of dose steps away from something below it. Is there a plateauing effect going on there in between those 2? Or is there -- are you seeing sort of a rationale or an effect there for that's happening?

Yes. I think what's really remarkable is that we gave guidance to 185.5 as the goal. And as you saw out of the 39 patients, I think there's roughly 8 that were on 318, and there was actually a single patient that was at in the 400s, which is -- you're talking about 40 breath equivalents. We didn't advise that.

So there likely was a clinical rationale by the investigator to continue to up-titrate the dose we would -- we recognize that these were being escalated and we would contact them and saying, listen, are you aware how much you're giving? I mean these are three, fourfold what is typically used with nebulized Tyvaso. And the answer was our patient needs more.

They are extremely -- the hemodynamics are severe, and we seem to be having a dose effect. And there are other KOLs that felt pretty happy with the median dose. And there was a few that were a little bit below that. So all in all, I think what you're seeing is this is a real-world profile that the clinicians eventually dictated where their patients landed.

Thanks, Rajiv. And thanks, everybody. So I think we have a closing slide, if you guys could go to that and Roger.

Yes. So first, I want to thank our invited guests and speakers. I hope you got the depth and of experience and the knowledge about current usage from them that you wanted today. You can see there's a real renaissance going on in the field and inhaled treprostinil seems to now have broader uses, which will also research.

So we're very excited to be a leading, if not hopefully, the leading player in the inhaled treprostinil space. I also want to thank all of you for taking your time. I know it's valuable that you're here to share it with us today. And a special shout out to Jason and Ellie, who organized all of this event so that we could all be here in the slides that we did.

And I think we'll leave you with these messages, which is exposure drives efficacy, tolerability drives durability and convenience drives compliance. So we're taking a very physician-centric and patient-centric approach to hit those goals and developing therapies that are going to be to the best advantage of the patients.

We could do a once-a-day L606, roll the dice and see how that turned out. We're not interested in doing that because we want to get that sustained benefit that works for that patient in the best possible way. So again, I thank everybody here today, and we look forward to speaking in the reception that we're going to have now. Thank you.

Okay. That concludes the webcast portion. We can adjourn to the back and have a drink.

Good morning, and welcome, everyone, to the Liquidia Corporation Second Quarter 2025 Financial Results and Corporate Update Conference Call. My name is Nadia, and I will be your conference operator today. [Operator Instructions] I would like to remind everyone that this conference call is being recorded. I will now hand the conference call over to Jason Adair, Chief Business Officer. Please go ahead, sir.

Thank you, operator, and good morning, everyone. It's my pleasure to welcome you to the Liquidia Corporation Second Quarter 2025 Financial Results and Corporate Update Call. Joining the call today are Chief Executive Officer, Dr. Roger Jeffs; Chief Operating Officer and CFO, Michael Kaseta; Chief Medical Officer, Dr. Rajeev Saggar; Chief Commercial Officer, Scott Moomaw; and General Counsel, Rusty Schundler.

Before we begin, please note that today's conference call will contain forward-looking statements, including those regarding future results, unaudited and forward-looking financial information and the company's future performance and/or achievements. These statements are subject to known and unknown risks and uncertainties, which may cause actual results or performance to differ materially. For more information, please refer to the documents filed with the SEC available on our website. With that, I'd like to turn the call over to Roger for our prepared remarks. Roger?

Thanks, Jason, and good morning, everyone. We are very pleased and excited to share our first commercial data for YUTREPIA with everyone this morning. It's been a spectacular beginning. Just over 11 weeks ago, we were proud to introduce YUTREPIA for the treatment of patients with pulmonary arterial hypertension, PAH, and pulmonary hypertension associated with interstitial lung disease, PH-ILD. Within 1 week of approval, we were live and in the market, shipping product, supporting physicians and most importantly, delivering therapy to patients. This wasn't simply a product introduction. It was a launch executed with purpose and precision and one that has been extremely well received by the physician and patient communities that we now serve.

Today, we will share data and as promised, provide additional granularity around key metrics to improve transparency regarding this early launch period. Since May, specialty pharmacies have reported over 900 unique patient prescriptions, leading to more than 550 patient starts on YUTREPIA. That pace of adoption is unprecedented in the treprostinil space and underscores the power of our PRINT-enabled prostacyclin product. We had no doubt about the key attributes of YUTREPIA's profile to enhance deep lung delivery with an easy-to-use, low- effort device, enabling a wide range of doses.

I can honestly say in all my years of launching drugs in this space, this has truly outpaced all expectations, even mine, which were very, very high. Not only does this signal the value of what we have developed, but also that existing products fall short in addressing the needs of many patients. In conversations with prescribers and in communication from patients, the ease of use, tolerability, especially with regard to cough and ability to escalate dose to clinical effect represents a marked and meaningful improvement in the quality of care. YUTREPIA's differentiated product profile, paired with the commercial success in driving brand awareness has led to an early and enthusiastic uptake as you have seen in the prescription and start numbers.

In fact, it's been an unabated sprint since day 1 of launch. We've seen broad demand from cardiologists and pulmonologists with prescriptions occurring at both specialty centers and community practices, and they are treating a broad group of patients across both diseases who are prostacyclin naive, transitioning from TYVASO and TYVASO DPI and even moving from oral prostacyclins. YUTREPIA is truly off to a strong start and quickly positioning itself as potentially the best-in-class and first-in-choice option for patients in need of a prostacyclin therapy. Anticipating the strong interest, our market access team prepared premium white glove services and reimbursement support to allow patients to gain early access to YUTREPIA.

Health care providers have responded positively to the program's co-pay assistance and 28-day free vouchers, a first for an inhaled prostacyclin therapy. As a way of providing some insight, prescriptions received during the first 6 weeks of launch had a 75% script-to-start conversion rate. It's especially noteworthy that this early momentum has been achieved in spite of the customary period of new-to-market blocks and non-formulary positioning. We see the potential for accelerating growth and possibly higher conversion rates as we continue to expand market access during the third and fourth quarters. While the commercial team has been driving YUTREPIA's robust update, our clinical team has been analyzing maturing data from the ongoing open-label ASCENT study, which was fully enrolled with 54 PH-ILD patients in March.

This analysis includes the safety and observational exploratory efficacy data up to week 16. The ASCENT study was intentionally designed to include a real-world PH-ILD population treated with YUTREPIA. In particular, we treated patients ranging from mild pulmonary hypertension to those with more advanced hemodynamic and forced vital capacity impairments and even patients listed for lung transplantation. The observations at week 8 and week 16 are indeed impressive.

The tolerability remains very favorable, as evidenced by the fact that only 18.5% of patients discontinued the study at week 16 with no discontinuations for serious or drug-related adverse events including cough. For context, this favorable tolerability is juxtaposed by prospective data of TYVASO DPI from the National Jewish Health Center, a [ peraminent ] pulmonary care center or 69% of treatment-naive patients discontinued Tyvaso DPI in a median time of only 40 days with the primary reasons for discontinuation being cough and clinical worsening.

Taking a slightly deeper look at the favorable tolerability that we are observing in the [ ASCENT ] study of those patients that reported a treatment-related call, the vast majority or 24 of 26 patients reported mild call and only 2 patients reported a moderate cost. However, it should also be noted that in the longitudinal analysis, the main data and simplified cost scores remained essentially unchanged from baseline through week 16, suggesting the cough overall tended to be transit in nature and not worsened with the addition of [ YUTREPIA, ] even with escalating doses and therefore, likely similar to these patients' historical cough that is associated with their underlying interstitial lung disease. This tolerability is helping patients escalate to higher doses. The median dose at week 8 was 132.5 micrograms or approximately 15 breath equivalents to Tyvaso and 159 micrograms at week 16, approximately 18 breadth equivalents to Tyvaso with the highest exposure of 380 micrograms comparable to approximately 36 breath 4 times per day of Tyvaso nebulizer.

The net result of greater tolerability and higher achieved doses also correlates with a robust efficacy result with the observed median improvements in 6-minute walk distance of 21.5 meters at week 8, that increased further to 31.5 meters at week 16. Overall, this data set continues to highlight the robust efficacy and durability of [ YUTREPIA ] in a real-world population of PHL D patients. We look forward to sharing the detailed data with the medical community targeting the PH Professional Network Symposium Conference in mid-September and a major respiratory conference in October.

Now I will pass the call to Mike who continues to guide the company with a firm hand on the financials and with an eye towards supporting continued growth.

Thank you, Roger, and good morning, everyone. In order to save time for more of your questions, I'd just like to hit headlines on the financial statements filed this morning with the SEC and in our press release. We closed the quarter with over $173 million in cash and cash equivalents on the balance sheet. A solid position that will help us bridge to profitability over the coming quarters as we continue the commercial rollout of [ YUTREPIA, ] invest in our pipeline and expand operational capabilities.

On the revenue side, we generated $8.8 million in the second quarter, of which $6.5 million came from [ YUTREPIA ] product sales, which began shipping in June. The additional $2.3 million in service revenue related to our ongoing promotion agreement of treprostinil injection with Sandoz. Expenses for the quarter were in line with our expectations as we fully transitioned into commercialization mode. Looking forward to the end of the year, we anticipate increases in quarterly R&D expenses as we continue ongoing label studies and prepare to initiate the pivotal study of L-606.

SG&A expenses after excluding noncash and variable costs associated with the treprostinil should remain flat over the next few quarters. Our planned commercial spending supports the launch -- but that said, any increase would be targeted to further acceleration in [ YUTREPIA ] adoption. Lastly, with YUTREPIA approved, we are expanding our footprint in North Carolina and have signed a lease for additional manufacturing space to support continuing growth, potentially tripling our production capacity.

Targeted for occupancy in 2026 this state-of-the-art facility will include production space to house additional print manufacturing lines and analytical labs to support additional [ YUTREPIA ] manufacturing. We are continuing to execute on our plan and our cash position gives us the flexibility to keep moving forward with confidence. With that, I'll hand it back to Roger.

Thanks, Mike. In just over 2 months [indiscernible] has delivered on every front with brand awareness growing, prescriptions rapidly escalating, payer access, expanding and clinical data maturing. With a clear and differentiated product profile, we are building a foundation, not just for a successful launch but for long-term leadership in the prostacyclin market. I would like to thank our entire team who like our product, are best-in-class. One final note before we begin the Q&A session.

We plan to host an R&D Day in the fall where we will provide an update on our open-label L-606 study, which will include data for patients who have been on L-606 for up to a year. We are as excited about L606 as we are [indiscernible] but today is a [indiscernible] stay in the spotlight plus L-606 to serve its own stage to properly highlight its own unique product profile. With that, operator, first question, please.

[Operator Instructions] And now we're going to take our first question from Julian Harrison from BTIG.

Congrats on the strong launch. These are very impressive numbers. Three questions from us. First, on a weekly basis, has the trap growth generally look sequential or was there some bolus effect early on? Second, PAH versus PH PLD mix, along with percentage of patients diagnosed with underlying IPF. Are you able to disclose those numbers now? And finally, on [ Ascent, ] it was great to see the very strong 6-minute walk data out or through 16 weeks. I'm curious if you could talk more about your decision to lead with the median 6-minute walk changes instead of the average -- why are the median changes may be more appropriate here? And how does that compare to the competitive landscape?

Great. Julian, thanks for the questions. So in terms of uptake, what we said in the script is that we've had accelerating uptake over time. So as we've been in the market, again, still just for 11 weeks, each week seems to be a little bit better than the 1 before. And we think that trend hopefully will continue, particularly as we continuing to evolve the payer landscape and remove some of the things like new to market blocks that existed when you first launch drugs. So awareness is driving a lot of that. I think we had a focus on the centers of excellence, the key centers.

And certainly, the adoption there has been rapid. I think the messages have been resonating very quickly, and that's the result of that, as you see that in the referrals and the script rate. We're not going to give the PAH versus PH-ILD split today. We want to make sure if we were to do that, that we had absolute clarity on what that is. And just because of the way some of that data has been collected, we can't really confirm exactly and precisely what the therapeutic split would be.

And then for the ASCENT trial, Yes. Maybe I'll hand that over to Rajeev to talk about why we think median data is most appropriate and more reflective. But the simple answer is, and I'll give it to Rajeev, is that it minimizes the impact out -- so particularly in an open-label study, you really want to look at medians to give a more, I think, accurate and reflective results from a population that we've studied. So Rajeev, any other comment on that?

Yes, Roger, Julian, it's here from you. I completely agree. I think it's less susceptible to being skewed to outliers or extreme values. It's important to provide the central tendency in these situations, especially with small samples. And I think it also is more akin to how larger data sets are usually conveyed. I will state that we will be showing more granular detail at the upcoming conference at PPN and in the upcoming conference in October.

But I think we could say with a high degree of confidential with the high degree of certainty that the mean and median values are fairly near each other. So I think that's really important to note as well.

Very helpful. All around, congrats again.

The question comes from line of Ryan Deschner from Raymond James.

Congratulations on a strong start to your trip launch and the Ascent results. What proportion of paid drugs associated with the reported patient starts? And is this in line with your expectations? And what proportion of patient starts are switches from Tyvaso DPI or other inhaled or oral treprostinil products?

Yes. So Rajeev, Mike, if you wouldn't mind answering the paid drug question and Scott, our Chief Commercial Officer, you can talk about proportions as you can.

Yes. Thanks, Roger. And Ryan, great to talk to you.

In terms of proportion of paid versus new start -- I'm sorry, as free drug. As we -- as everyone knows, we have a couple of programs we have about voucher program that provides the first 28 days free drug for new patients. Then we also have a bridge program that provides an additional 28 days supply at any time during -- one time during a patient's journey. So what I would say is specifically in the amount of paid versus free drug, especially through the usage of the voucher program, it's in line with our expectations of what we've seen in other launches. Less than 50% have been on free voucher drugs. But again, we wanted to make sure we gave patients an opportunity to try our drug immediately to see if it's something that works for them and allows us to start that insurance adjudication process as we go.

But we're very happy with the services that we provide, the market access services, specifically that Scott and his team have provided, and I think have been very helpful for us as we've gotten [indiscernible]

Great. And Scott, if you'll handle the second question.

Sure. So in terms of switches versus new to prostacyclin patients, I think we said in the past that our primary focus is the new to prostacyclin patients. And so commensurate with that, we've certainly the preponderance of the patients that are coming in -- we have seen switches. I think it's no secret that there are many patients out there who've been on a DPI or nebulized inhaled and are either on that and are dissatisfied or came off of it. And so I think as Roger said in the prepared remarks, we have been surprised, let's say, with the volume of those. We're not going to get into the exact numbers. And we are also seeing, as I think Roger mentioned some oral prostacyclin switches as well.

So we'll keep an eye on that as time goes along and get a feel for what the run rate is for that, but that's kind of how it's playing out currently.

Thanks, Scott. And I think the only thing I would add to that is where we said we -- even I was surprised by the upside here, I think it was because of the switches. What we found is that there is a large number of patients with intolerant cough who remain on Tyvaso DPI but are parked at low dose. So aren't really getting the benefit of the prostacyclin that they deserve and those patients have readily looked forward to receiving Nutria -- so that's been where the incremental upside has been in this near term.

And I think that will continue to grow, particularly as the experience in the new patient arena sort of shows prescribers and patients that this drug is very, very effective and is the therapeutic protege that we hoped it would be. Next question, please?

And the question comes to the line of Jason Gerberry from Bank of America.

And congrats on the launch as well. My question, thinking about second half in these patients that have started on TEPA, how should we think about sort of the gross to net? Presumably, they've already kind of gone through their 28 days voucher. And so I'm just kind of curious like if that -- those patients are going to flow through at full lack or gross to net assumption that we should assume for those patients plus those that maybe convert from the prescription referral to a start.

And that 75% conversion rate, the other 25% that haven't converted, is that just a function of time? Or is there anything structural or gating for those patients? Just trying to get a sense of what that process is like and the typical time from starting the prior authorization process to ensuring coverage.

Great. Thank you, Jason. Great questions. Mike, if you don't mind answering those questions.

Mike, you might be on mute.

Sorry. As it relates to gross to net, it's not something that we've talked about in terms of project water gross nets to be. I mean I think what we said all along is from a payer point of view, we want to make sure patients have an opportunity to choose [ YUTREPIA. ] As Roger said earlier, there have been new to market blocks, especially in areas where our competitors contracted specifically in the commercial space. We now have signed contracts with all of the major commercial payers. We expect those new to market blocks to be removed shortly.

So we would expect, like I said, more prescriptions as we move through the year to be subject to rebates but again, we're very confident in our ability for [ YUTREPIA ] to win in this space. I'm very confident for us to be at parity access. And our stated goal from the very beginning was that we would -- we want to make sure patients have a choice. And I think Scott and his team have done a great job of working towards that, and we look forward to further development there here in the second half of the year. The second question around the convert rate -- what I would say is, again, the patient support services that we put in place, which includes reimbursement specialists to navigate this landscape.

We expect -- when you look at industry standards, I think that's a very, very good percentage -- as again, as Roger said, there were some headwinds early on as it relates to these new to market blocks, is those released? We think that, that could be an accelerant as we get through the back end of the year here. And as we move forward to -- again, to make sure patients have the ability to choose and we feel very confident in our ability to deliver on that.

And Mike, if I could just squeeze a follow-up and just any commentary regarding Symphony data on a go-forward basis? Should we look at it? Have you guys interrogated that and how we should interpret that on a go-forward basis?

Yes. So what I would say is, as is pretty standard in the industry, this information is usually not available. We obviously have seen the data like you have. I would not expect to see future data to come out, and we look forward to sharing our results as we go through each quarterly earnings call.

And the question comes the line of Cory Jubinville from LifeSci Capital.

Congrats on all the progress. It seems like traction has been really great so far. As we think about launch plans throughout the rest of the year, what kind of near-term levers are there to pull to accelerate growth? And again, given the traction you've seen so far as a plan? Or is the plan to kind of largely stay on course versus pull some of these levers. And you also mentioned that you've signed contracts with the 3 major commercial players. When do those contracts kick in and you start to get reimbursement through that?

Yes. Thanks for the question, Cory. So what we -- I'll take the second question first, and then Scott, if you'll comment on the launch plans and levers that we could pull going forward. But I guess we're going to stick to the script like in the coming quarters. We think the payer landscape will improve. And then so that's going to be in place to happen and be an accelerant as we've said. And Scott, maybe you can talk about the levers that could be pulled going forward in terms of launch.

Yes, sure. So the first thing I'd point out is that I think we have immense opportunity both from a breadth and for a depth standpoint to capitalize on. So to take, for example, the amount of breadth, I think we said 350 prescribers have prescribed thus far. But we've also said in the past that we have 6,500 targets across the country. So there's well over 6,000 out there who have not had the opportunity to use [indiscernible] and from a breadth standpoint, we're just getting started. I mean we've been pleased to have physicians with 1, 2, 3, 4, 5-plus patients, but many more of them can't have that depth and will have that depth.

From an activity sort of lever standpoint, I think one is just fuel the fire. We're going to continue to work with the centers on [indiscernible] we have had community physicians for sure to prescribe, but we will now start to kind of work our way back out into the community to get PAH patients, but also to start to get PH-ILD patients. And then strictly from a tactical perspective, I mean we'll be at all the major conferences. We'll be loved from an electronic standpoint. We still have a full suite of launch marketing that's going on right now and we'll certainly continue to go on for the rest of the year.

And Scott, maybe I'll add in terms of like I think all of those activities are clearly going to be beneficial to the brand. I think in terms of the levers, I can think of 5 just off the top of my head, it's like, as Scott said, continue to increase breadth and depth of prescribers, especially as we go out into the community centers more. Because I think in this initial phase, we were somewhat focused on the major centers. as we've said, we'll get acceleration from payer engagement and coverage.

The third would be that now that there's traction in switch opportunity maybe try to leverage that more broadly and talk about that experience more widely with prescribers so that they, too, can benefit from the transition with their patients. I think the fourth level lever would be to focus on [ YUTREPIA's ] dosing flexibility to drive durability. I think just as important as starting patients is keeping patients on therapy, and that's obviously going to be a key focus for our commercial enterprise going forward.

And then I think we should also now begin to capture this initial data from oral transitions, particularly as they come off of TYVASO what we've seen early and begin to focus potentially on an initiative to support that in terms of how to inform doctors how to do that. So lots of levers that we can pull all will drive future business. So I think this is a very levered business in terms of what we can accomplish going forward.

Now we're going to take our next question and it comes from the line of Serge Belanger from Needham.

Congrats on a great start. Had some technical difficulties this morning. So apologies if you've covered this already. So first of all, on the $6.5 million, can you give us a split between channel inventory and patient demand. Secondly, regarding payer coverage, can you tell us where you're currently at and where you expect to be by the next quarter? And is the coverage similar to Tyvaso.

I have another follow-up, but I'll start there.

Thank you, Serge. Mike, can you answer those questions, please?

Yes, Serge, thanks for your question. Specifically on the breakdown on revenue, I'd say, especially for first quarter of launch, the vast, vast majority of that revenue was loaded in the channel. As you can imagine, as we previously talked about, we put product into the channel, the first week of June. We dosed our first patient shortly thereafter. But just from a pure timing point of view, there would be a lot of that initial revenue would be loading the channel -- with that being said, obviously, with the accelerating patient numbers that we've seen, we start seeing stacking of patients as we move into second scripts.

The vast majority of that has already been absorbed as we move into Q3. as we -- related to payer coverage, again, like we've always said, we want to make sure that patients have choice in order for patients to have choice. We need to make sure they have access to TPI. As I said earlier, we signed contracts with 3 major commercial payers. And as those NDC blocks are removed, we feel very confident, as we said, the product profile of [indiscernible] to win and to be the [indiscernible] of first choice, as Roger has stated, being in a parity situation with United Therapeutics, where we are not disadvantaged. And as those kick in, we feel very confident that, that will be the place that we land and feel very confident in our ability to grow.

And maybe one for Rusty. Just an update on the 327 pet litigation. I think there was a hearing a few weeks ago. I guess when you expect potential decision and what the potential outcomes could be?

Yes. Thanks for the question, Serge. So as you know, trial was held back at the end of June. At this point, all post-trial briefing is complete. The judge set a relatively accelerated post-trial briefing schedule. So post-trial briefing is now complete. As far as when we get a decision, it's always hard to predict how quickly courts are going to roll on things.

I think in the first [ Hatch-Waxman ] trial in front of Judge Andrews, it was about 2.5 months between the completion of post-trial briefing and his decision Obviously, here, he said an accelerated time line for the post-trial briefing that could indicate that his decision will similarly be a little bit faster than the last time, but again, hard to predict with any a degree of precision. And then finally, as to the potential outcomes, the same outcomes we've been talking about all along.

Again, as with litigations, we won't probabilitize what the outcome is going to be or try to get in front of the judge and guess how he's going to rule. But it's sort of the full range of these potential outcomes consistent with any Hatch-Waxman litigation. Thank you.

[Operator Instructions] And the question comes from the line of Tiago Fauth from Wells Fargo.

Let me just add my congratulations as well. A quick one for me. Just thinking about United [indiscernible] read through. Kind of what are some of the implications potentially going forward, on the beta on orphan drug exclusivity. Any implications for you tractor for the development path for 606, basically how you guys are thinking about that if that trial reads out positively.

Thanks, Tiago. I'll take that. So I think they've said they're expecting that result in September. So there's really no sense in me trying to predict what that trial result will or won't be. I think if they are successful, they will have some orphan protection for that for a period of time. So I think for us, it would be a matter of developing L 606 for that indication. So that once that orphan exco exclusivity expired that we could benefit from that market to if they are to be successful. But we'll soon see where that lands.

Thank you. [Operator Instructions] Dear speakers there are no further questions for today. I would now like to hand the conference over to Roger Jeffs for any closing remarks.

Thank you, everyone, for joining today's call. We appreciate your enthusiasm for this initial phase of launch. We remain laser-focused on the execution in the back half of the year and look forward to driving continued uptake expanding payer access and laying the groundwork for our broader pipeline. And we look forward to speaking with you very, very soon, especially in the fall when we have our R&D Day for L606. Thank you again.

This concludes today's conference call. Thank you for participating. You may now all disconnect. Have a nice day.