Liquidia (LQDA) stock shot higher Tuesday after its new drug, Yutrepia, widely beat prescription and patient start expectations in its first quarter on the market.
Yutrepia treats pulmonary arterial hypertension and pulmonary hypertension associated with interstitial lung disease. The former is a form of high blood pressure in the arteries of the lungs. The latter refers to disorders that cause inflammation and scarring of the lung tissue.
Liquidia's drug launched in early June. As of Aug. 8, specialty pharmacies have reported more than 900 prescriptions for Yutrepia have led to north of 550 patient starts. That suggests there's been an early bolus of patients to start Yutrepia, according to Oppenheimer analyst Andreas Argyrides.
In morning trades on today's stock market, Liquidia stock jumped more than 10% to 23.42. Shares broke out of a double-bottom base with a buy point at 18.60 on July 24. The stock later fell as much as 9.6% on Aug. 1, triggering a sell rule. Savvy investors are encouraged to cut their losses when a stock falls 7% to 8% below its entry.
Liquidia expects 75% of patients to start treatment with Yutrepia after receiving their prescription.
Argyrides says it will be key to watch the rate of patients that discontinue treatment. In Liquidia's study called Ascent, 18.5% of patients dropped out after 16 weeks. These were patients who previously didn't discontinue treatment with a rival drug called Tyvaso from United Therapeutics (UTHR).
How does that "read through to 350 scripts not resulting in patient starts?" Argyrides asked.
He's also bearish on Liquidia's ongoing patent battle with United. United alleges Liquidia infringed on its patents. Both Tyvaso and Yutrepia use an inhaled version of treprostinil to treat PAH and PH-ILD.
"We still see YUTREPIA launching 'at-risk' in ILD as meaningful risk not priced into the stock," he said.
The trial now appears to be swinging in United's favor. If United succeeds, Liquidia could lose its ability to market Yutrepia to ILD patients until 2042, Argyrides said.
He kept his underperform rating on Liquidia stock.
The second-quarter was ultimately mixed. Liquidia came in with $8.8 million in sales, beating calls for $4 million, according to FactSet. Liquidia lost 49 cents per share, deepening from a year-earlier loss of 38 cents a share. That missed calls for a lighter 42-cent loss per share.
Liquidia stock has a strong IBD Digital Relative Strength Rating of 94, putting it in the leading 6% of all stocks when it comes to 12-month performance.
Follow Allison Gatlin on X/Twitter at @AGatlin_IBD.
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