Liquidia Shares Jump 37% After Settlement With United Therapeutics

what happened

Liquidia shares rose 37% to $36.60 in premarket trading on Wednesday, Barron's reported. The rally followed a global settlement of $380.7 million with United Therapeutics that resolves all six pending lawsuits between the two companies, covering patent, trade secret and antitrust claims.

Under the agreement, patients with pulmonary arterial hypertension will keep uninterrupted access to Yutrepia. The catch is that Liquidia must stop selling the drug to patients with pulmonary hypertension associated with interstitial lung disease. The deal came two weeks after Liquidia lost a patent trial against United Therapeutics.

BTIG upgraded the stock to Buy with a $70 price target. Wells Fargo called the settlement positive and raised its target to $33 from $30, keeping an Equal Weight rating. Needham cut its target to $58 from $72 while maintaining a Buy rating.

why it matters

For investors, the key change is the removal of legal uncertainty. Wells Fargo cited preliminary fiscal third-quarter Yutrepia sales that grew 31% to $222.7 million, and analysts believe that momentum could outweigh the settlement cost. Still, the restriction on a patient group may make it harder to add new patients, although revenue should keep growing from existing ones.

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