Liquidia Corporation has secured a significant financial boost through an amended agreement with Healthcare Royalty (HCRx) that could provide up to $100 million in additional financing. The biopharmaceutical company plans to use these funds primarily to advance the commercial development of Yutrepia™ (treprostinil) inhalation powder for treating pulmonary hypertension conditions.
The financing will be distributed in three tranches, with $25 million available immediately at closing. The company can access an additional $50 million upon the first commercial sale of Yutrepia following FDA approval for pulmonary arterial hypertension (PAH) and pulmonary hypertension associated with interstitial lung disease (PH-ILD). A final $25 million tranche becomes available if Yutrepia achieves aggregate net sales exceeding $100 million by June 30, 2026.
Michael Kaseta, Liquidia's Chief Financial Officer and Chief Operating Officer, expressed confidence that the combination of this financing and a successful Yutrepia launch could enable the company to reach profitability without requiring additional capital.
Financing Structure and Terms
Under the sixth amendment to their agreement, Liquidia has committed to a fixed payment schedule extending through 2032 in exchange for the initial $25 million funding. The aggregate payments to Healthcare Royalty are capped at 175% of the total advanced amount, with potential true-up payments if HCRx's internal rate of return falls below minimum thresholds. The minimum rates of return for the three new tranches are set at 16%, 13%, and 12%, respectively.
Yutrepia Development Program
Yutrepia represents Liquidia's lead investigational drug candidate, utilizing the company's proprietary PRINT® technology. The inhalation powder formulation of treprostinil is being developed for multiple applications in pulmonary hypertension, including:
- Treatment of pulmonary arterial hypertension (PAH)
- Management of pulmonary hypertension associated with interstitial lung disease (PH-ILD)
- Potential applications in pediatric patients
- Further evaluation in WHO Group 1 and WHO Group 3 patients
The financing comes at a critical juncture as Liquidia awaits final FDA approval for Yutrepia. The agreement specifies that the second tranche of funding is contingent upon no injunctions being issued that would prohibit Liquidia from commercializing Yutrepia for either PAH or PH-ILD.
Market Significance
Pulmonary hypertension represents a significant unmet medical need, with limited treatment options currently available, particularly for patients with PH-ILD. Treprostinil is an established therapeutic agent for pulmonary hypertension, but Liquidia's dry powder inhalation formulation could potentially offer advantages in terms of convenience and administration compared to existing delivery methods.
The substantial financing arrangement reflects confidence in Yutrepia's commercial potential, with the milestone-based structure aligning investor returns with the product's market performance. If successful, Yutrepia could strengthen Liquidia's position in the pulmonary hypertension treatment landscape and provide a valuable new option for patients with these serious cardiopulmonary conditions.
