Great work here. I have one detail on the '066 patent that I want to understand. You state:
"The declined IPR on the ’066 patent wouldn’t matter in the end. Eventually Judge Andrews at the Delaware District Court would rule the ’066 patent to be invalid, knocking the ’066 out of the federal court litigation."
But the DC decision does not knock it out of litigation. The DC decision has been appealed. I am not trying to nitpick as I understand that the DC decision is likely to be upheld. But how do you think about the '066 appeal?
Everyone seems to be focused on the more-interesting '793 dynamics, but unless I am making an error, we also need to handicap the '066 appeal.
Lionel, thank you for all your work on LQDA. Been incredibly helpful. I have been trying to get information on Mercks drug Sotatercept since they were out today with very promising results in PAH. As I continue to evaluate my continued position in LQDA, I’m wondering if you have any comments/insight into how a potential approval of Sotatercept may impact the market for the inhaled therapies such as those marketed by UTHR and eventually LQDA. From a lay persons point of view it appears to be a compelling drug (albeit not yet approved) that could really challenge these current inhaled therapies. Thanks in advance…..
From what I read, Tyvaso DPI is a better drug. It delivered better 6mwt and while delivering a lesser dose of Treprostinil. It requires a single inhaled dose vs 2 inhalations for Yutrepia. In comparisons of patient satisfaction Tyvaso DPI performed slightly better as well with patients. Keep in mind Yutrepia was only compared to Tyvaso solution delivered via nebulizer and not to Tyvaso DPI. The article shades this relative comparison.
I also understand that in IPF that Tyvaso has been granted orphan drug designation which provide 7 years exclusivity and incentives to UTHR in the US and up to 10 years in EU.
A few other points, the likelihood that PTAB refuses rehearing became less likely after the POP hearing since they identified issues to be addressed by the PTAB. Lastly, LQDA faces a theft of secrets federal lawsuit which apparently was supported during discovery. The path to marketability is not so clear cut as the author suggests. Truth is usually found somewhere in between both arguments. I suggest a comparison of both companies 10K reports to start.
Hi Hammer, thanks for the feedback. A couple of quick notes--
There are a few reasons why Yutrepia is likely to be more well-tolerated. In addition to the points I note, above (fewer breaths and storage ability), there appear to be early results indicating the smaller particle size of Yutrepia mitigates some side effects like cough and throat pain.
Regarding the trade secret suit, the suit looks to be another delay tactic. The complaint is fairly threadbare, and only seems to have survived the MTD based on the optical issue that Roscigno worked on the treprostinil line at both companies. It’s a good sign for Liquidia (albeit a mitigated one) that the conversion claim was dropped by UT. It’s also good news to me that the trade secrets themselves seem to be financial and regulatory/application related, rather than technology related. Even in a worst-case scenario, I’m not sure the damages would be material, as there isn't an allegation that Liquidia could not have developed Yutrepia without UT trade secrets.
Perhaps most significant is the fact that there’s a 4 year gap (2007-2011) between Roscigno’s work with Lung Rx and his work as a LQDA consultant. I’ve litigated a number of trade secret cases, and I don’t think I’ve ever seen a gap that large where there’s no evidence of contact in the interim.
Respectfully, let me say this. I do believe Yutrepia is safe and effective, a bit more than nebulized Tyvaso in effectiveness. In regards to Tyvaso DPI it does not match up as well. Case in point your reference that smaller particle size mitigates cough and throat pain is not born out by studies. Per the Yutrepia study. 51% of patients reported cough and 18.2% of patients reported throat pain. Of note cough is not broken down by first or second inhalation as required by Yutrepia. In comparison the Tyvaso DPI study revealed 18% of patients reported cough and 2% throat pain. Those stats reported direct from study results. Granted, Treprostinil alone regardless of delivery is an upper airway irritant which results in cough. If you have ever clinically watched a PAH patient deliver their dose this cough is evident with each inhalation. If logically reported observed cough in studies was 51% Yutrepia and 18% Tyvaso DPI, logic would also dictate it is perhaps worse since Yutrpia requires 2 inhalations to complete treatment.
I would caution high expectations of Yutrepia success based solely upon comparison between Yutrepia and Nebulized Tyvaso Solution but rather the comparison between Yutrepia and Tyvaso DPI in which your conclusions quickly become muted.
I do think if Yutrepia is marketed in the short term, 2024, it will garner some success competing in the PAH and Class 3 subset but with United saturation of the market for 2 years the success will be marginal. This was perhaps the primary reason why Liquidia chose the quickest pathway for approval and presumably filed the FDA Citizen Petition Letter by Lassman, et al., to be the first DPI approved on market.
I do agree with your evaluation of likelihood of Treprostinil for IPF. This market dwarfs PAH and PAH-ILD. With exclusivity in this market to potentially 2032, brand name recognition throughout the market spectrum will be dominated by Tyvaso DPI and United. I would predict market share for Liquidia to be in the 10%-13% of a market potentially worth about 5-6 Billion. In all a good achievement but still not blockbuster.
As a LQDA long this is pretty much my nagging concern- even in their most recent earnings transcript they compare yutrepia to the nebulized tyvaso instead of the DPI. As I understand LQDA has a superior inhaler and may be able to dose higher, but UTHR says tyvaso DPI can be stored at room temp so I'm not sure there are any other substantial differences
I've spoken to them about this. Neither company can compare itself to the others DPI. There is no head to head trial. The only comparison they may legally make is to nebulized. Docs will use transitive math to comp the DPIs directly
isn't the whole point author is making about the ptab rehearing that it doesn't really matter? catching them on the inadequacy of the non-primary argument still means the primary argument holds
Thanks Hammer for the insight. A question about "Tyvaso has been granted orphan drug designation which provide 7 years exclusivity and incentives to UTHR." Assuming that is true (and I think you are right), given that Tyvaso and Yutrepia are essentially the same drug (dry powder treprostinil) with a different delivery system, can't doctors just ignore the "exclusivity" for IPF patients? For example, can a doctor prescribe Yutrepia off label to an IPF patient if the doctor believes Yutrepia's delivery mechanism works better than Tyvaso's delivery mechanism(because of the ease of use, dosage, etc)???? Happy to hear anyone's thoughts on this; and full disclosure I have no expertise in this area and I am long LQDA.
I believe one of the two reference articles was actually published before the critical date. You can see in the search exhibit referenced in the lqda witness declaration.
But as you say it's a strong argument on the published abstracts. The declaration of the lqda library science expert is very compelling. Uthr's expert is a joke. What risk do you see here?
The ptab is taking forever to review the rehearing request.
I do not understand why the prices of brand-name Rx meds continue to go upward. Would it not be a better policy to price them not too far above their generic counterparts ? (Just asking.)
Fantastic job. An excellent read; thorough, accurate, insightful, and at times funny. You make a compelling case. I note that insider buying fully supports your bullish position. Please keep writing and sharing your ideas with us, much appreciated.
Lionel:
Great work here. I have one detail on the '066 patent that I want to understand. You state:
"The declined IPR on the ’066 patent wouldn’t matter in the end. Eventually Judge Andrews at the Delaware District Court would rule the ’066 patent to be invalid, knocking the ’066 out of the federal court litigation."
But the DC decision does not knock it out of litigation. The DC decision has been appealed. I am not trying to nitpick as I understand that the DC decision is likely to be upheld. But how do you think about the '066 appeal?
Everyone seems to be focused on the more-interesting '793 dynamics, but unless I am making an error, we also need to handicap the '066 appeal.
Lionel, thank you for all your work on LQDA. Been incredibly helpful. I have been trying to get information on Mercks drug Sotatercept since they were out today with very promising results in PAH. As I continue to evaluate my continued position in LQDA, I’m wondering if you have any comments/insight into how a potential approval of Sotatercept may impact the market for the inhaled therapies such as those marketed by UTHR and eventually LQDA. From a lay persons point of view it appears to be a compelling drug (albeit not yet approved) that could really challenge these current inhaled therapies. Thanks in advance…..
Hi Lionel,
Thanks for the wonderful summary. Any thoughts on the royalty agreement?
Thanks in advance.
From what I read, Tyvaso DPI is a better drug. It delivered better 6mwt and while delivering a lesser dose of Treprostinil. It requires a single inhaled dose vs 2 inhalations for Yutrepia. In comparisons of patient satisfaction Tyvaso DPI performed slightly better as well with patients. Keep in mind Yutrepia was only compared to Tyvaso solution delivered via nebulizer and not to Tyvaso DPI. The article shades this relative comparison.
I also understand that in IPF that Tyvaso has been granted orphan drug designation which provide 7 years exclusivity and incentives to UTHR in the US and up to 10 years in EU.
A few other points, the likelihood that PTAB refuses rehearing became less likely after the POP hearing since they identified issues to be addressed by the PTAB. Lastly, LQDA faces a theft of secrets federal lawsuit which apparently was supported during discovery. The path to marketability is not so clear cut as the author suggests. Truth is usually found somewhere in between both arguments. I suggest a comparison of both companies 10K reports to start.
Hi Hammer, thanks for the feedback. A couple of quick notes--
There are a few reasons why Yutrepia is likely to be more well-tolerated. In addition to the points I note, above (fewer breaths and storage ability), there appear to be early results indicating the smaller particle size of Yutrepia mitigates some side effects like cough and throat pain.
Regarding the trade secret suit, the suit looks to be another delay tactic. The complaint is fairly threadbare, and only seems to have survived the MTD based on the optical issue that Roscigno worked on the treprostinil line at both companies. It’s a good sign for Liquidia (albeit a mitigated one) that the conversion claim was dropped by UT. It’s also good news to me that the trade secrets themselves seem to be financial and regulatory/application related, rather than technology related. Even in a worst-case scenario, I’m not sure the damages would be material, as there isn't an allegation that Liquidia could not have developed Yutrepia without UT trade secrets.
Perhaps most significant is the fact that there’s a 4 year gap (2007-2011) between Roscigno’s work with Lung Rx and his work as a LQDA consultant. I’ve litigated a number of trade secret cases, and I don’t think I’ve ever seen a gap that large where there’s no evidence of contact in the interim.
Resistance for Yutrepia is dramatically lower. Easier for patient to inhale. Similar to a natural breath
Respectfully, let me say this. I do believe Yutrepia is safe and effective, a bit more than nebulized Tyvaso in effectiveness. In regards to Tyvaso DPI it does not match up as well. Case in point your reference that smaller particle size mitigates cough and throat pain is not born out by studies. Per the Yutrepia study. 51% of patients reported cough and 18.2% of patients reported throat pain. Of note cough is not broken down by first or second inhalation as required by Yutrepia. In comparison the Tyvaso DPI study revealed 18% of patients reported cough and 2% throat pain. Those stats reported direct from study results. Granted, Treprostinil alone regardless of delivery is an upper airway irritant which results in cough. If you have ever clinically watched a PAH patient deliver their dose this cough is evident with each inhalation. If logically reported observed cough in studies was 51% Yutrepia and 18% Tyvaso DPI, logic would also dictate it is perhaps worse since Yutrpia requires 2 inhalations to complete treatment.
I would caution high expectations of Yutrepia success based solely upon comparison between Yutrepia and Nebulized Tyvaso Solution but rather the comparison between Yutrepia and Tyvaso DPI in which your conclusions quickly become muted.
I do think if Yutrepia is marketed in the short term, 2024, it will garner some success competing in the PAH and Class 3 subset but with United saturation of the market for 2 years the success will be marginal. This was perhaps the primary reason why Liquidia chose the quickest pathway for approval and presumably filed the FDA Citizen Petition Letter by Lassman, et al., to be the first DPI approved on market.
I do agree with your evaluation of likelihood of Treprostinil for IPF. This market dwarfs PAH and PAH-ILD. With exclusivity in this market to potentially 2032, brand name recognition throughout the market spectrum will be dominated by Tyvaso DPI and United. I would predict market share for Liquidia to be in the 10%-13% of a market potentially worth about 5-6 Billion. In all a good achievement but still not blockbuster.
As a LQDA long this is pretty much my nagging concern- even in their most recent earnings transcript they compare yutrepia to the nebulized tyvaso instead of the DPI. As I understand LQDA has a superior inhaler and may be able to dose higher, but UTHR says tyvaso DPI can be stored at room temp so I'm not sure there are any other substantial differences
I've spoken to them about this. Neither company can compare itself to the others DPI. There is no head to head trial. The only comparison they may legally make is to nebulized. Docs will use transitive math to comp the DPIs directly
isn't the whole point author is making about the ptab rehearing that it doesn't really matter? catching them on the inadequacy of the non-primary argument still means the primary argument holds
Yes
Thanks Hammer for the insight. A question about "Tyvaso has been granted orphan drug designation which provide 7 years exclusivity and incentives to UTHR." Assuming that is true (and I think you are right), given that Tyvaso and Yutrepia are essentially the same drug (dry powder treprostinil) with a different delivery system, can't doctors just ignore the "exclusivity" for IPF patients? For example, can a doctor prescribe Yutrepia off label to an IPF patient if the doctor believes Yutrepia's delivery mechanism works better than Tyvaso's delivery mechanism(because of the ease of use, dosage, etc)???? Happy to hear anyone's thoughts on this; and full disclosure I have no expertise in this area and I am long LQDA.
Great article. Best I've seen on this.
I believe one of the two reference articles was actually published before the critical date. You can see in the search exhibit referenced in the lqda witness declaration.
But as you say it's a strong argument on the published abstracts. The declaration of the lqda library science expert is very compelling. Uthr's expert is a joke. What risk do you see here?
The ptab is taking forever to review the rehearing request.
I do not understand why the prices of brand-name Rx meds continue to go upward. Would it not be a better policy to price them not too far above their generic counterparts ? (Just asking.)
Fantastic job. An excellent read; thorough, accurate, insightful, and at times funny. You make a compelling case. I note that insider buying fully supports your bullish position. Please keep writing and sharing your ideas with us, much appreciated.