Liquidia Corporation
Q4 2020 Earnings Call Transcript

Published: 23 Mar 2021

[Operator:]

Good morning and welcome, everyone, to the Liquidia Corporation Full Year 2020 Financial Results and Corporate Update Conference Call. My name is Victor, and I'll be your conference operator today. Currently, all participants are in a listen-only mode. Following the presentation, we will conduct a question-and-answer session. Instruction will be provided at that time for you to queue up for questions. I will now hand the conference over to Jason Adair, Vice President Corporate Development and Strategy.

[Jason Adair:]

Thank you, Victor. It's my pleasure to welcome everyone to today's conference call to discuss our full year financial results for 2020 and to provide a business update. Before we begin, I'd like to remind everyone that today's call will contain forward-looking statements based on current expectations. Such statements may involve risks and uncertainties that may cause actual results to differ materially from these stated expectations. For further information on the company's risk factors, please see Liquidia's filings with the Securities and Exchange Commission at www.sec.gov or on Liquidia's website at www.liquidia.com.

[Damian deGoa:]

Thank you, Jason, and good morning, everyone. We hope you and your families remain healthy. I'm excited to speak with you today on my first earnings call for Liquidia. I began with Liquidia mid-December. As you might expect the last three months have been busy as we position Liquidia for the future. But before we jump into the full corporate update and review of 2020 financials, I would like to take a moment to introduce a few of the new members of the management team. Joining me on the call today are Mike Kaseta, our Chief Financial Officer who joined in November; Scott Moomaw, our Senior Vice President of Commercial who joined as part of the RareGen merger also in November; and Dr. Thushar Shah, our Chief Medical Officer and Head of R&D who joined in May. The rest of the Management team includes Rob Lippe, our Chief Operations Officer, who has helped scale print technology over the last six years; Jason Adair, who you've met and continues to lead Business Development and Investor Relations. And lastly, I'm pleased to announce that effective next week, Rusty Schundler will join Liquidia as Senior Vice President and General Counsel. Rusty has served as General Counsel at PBM Capital Group where he and I worked together for more than five years. What can you expect from our leadership team? We will operate with a sense of urgency; we will be decisive and results-oriented; we will be financially-disciplined and efficient; we will focus on value-creating objectives; we will be entrepreneurial and approach growth as an investor and manager. As the newly assembled management team, our initial thoughts on the company are as follows. LIQ861, our inhaled dry powder formulation of treprostinil is a great product with very good market potential. The patient benefits are clear. We recognize that we have work to do to achieve final approval, including

[Michael Kaseta:]

Thank you, Damian, and good morning, everyone. Our full-year 2020 financial results can be found in the press release issued earlier today and on our Form 10-K to be filed with the SEC in the coming days, both of which will be available on our website.

[Damian deGoa:]

Thank you, Mike. Having reflected on the major activities of the company in 2020 and my first three months on the job, I'd like to make a couple of points for you before taking your questions. First, we are committed to 861 and doing everything we can to achieve FDA approval. It's a great product with tremendous market potential. Second, we will exercise financial discipline and look for value-creating opportunities in R&D and business development as we look to build value in the near and midterm. I will now turn the call over to the operator to take your question.

[Operator:]

Our first question will come from the line of Chris Howerton from Jefferies. You may begin.

[Chris Howerton:]

Excellent. Thank you. Good morning, everybody and thanks for taking the questions. I guess the first one for me would be just kind of if we can have any more color in terms of what the operational activities would be required to kind of satisfy the deficiencies with respect to the biocompatibility information? I guess I'm just trying to find out what technically or tactically you have to do to kind of accomplish those goals. And then the second question for me would be just kind of remind us in terms of where we're at in terms of the ongoing litigation from a just procedural perspective and what news flow we might be able to expect out of that process over the coming months? Thanks.

[Damian deGoa:]

Hey, Chris. Thanks. I think in terms of the biocompatibility, we've basically taken that over from our partner, plus the update and we are we are basically doing a full biocompatibility testing. That's all underway and ongoing as we speak. Those results are part of the time line in things that we need to resolve prior to being able to respond to the CRL response. However, this device has been used in millions of patients and been on the market for a number of years and in prior versions. So we feel pretty confident in it, but we just need to do the work. In relation to the ongoing litigation, I would say the next major event is the claims construction that will occur in May of 2021. And, Chris, we're probably going to take a little bit more of a higher level response on kind of the activities on a day-to-day basis, if you will, of the ongoing litigations and we'll probably let our litigators do what they do and then provide comment as appropriate.

[Chris Howerton:]

Sure, yes. Totally understood. So basically, the Markman hearing should be coming up and that's the next potentially public viewing in terms of new information. Is that kind of the correct perspective?

[Damian deGoa:]

That's right.

[Chris Howerton:]

Okay. Aright. Well, thanks again for taking the questions and look forward to the continued progress.

[Damian deGoa:]

Thanks, Chris.

[Operator:]

Our next question will come from Andreas Argyrides from Wedbush Securities. You may begin.

[Andreas Argyrides:]

Good morning and thank you for all the updates on the quarter. It's Andreas, on for Liana Moussatos. I'm going to keep it brief myself. Regarding 865, you're hoping strategic partnership development until you find a strategic partner. What might a partnership look like? What are you expecting? Any color on that? Thanks.

[Damian deGoa:]

Yes, I think it's too early to say Andreas. I think that we do have several interested parties. And I think there's a lot of factors that will go into who's the right potential partner. In terms of terms or financials related to that, it's too early to have any discussions around that.

[Andreas Argyrides:]

Okay. And then just one on the patent litigation. In the press release, you mentioned this October coming up as another potential event. How might a favorable decision by the PTAB to institute the IPR for 793 shift time lines and potential approval and launch? Thanks.

[Damian deGoa:]

Thanks. Good question. I don't think it will actually have any impact on the overall timing. The October would be when the PTAB would decide whether or not to accept the petition. And then it would be 12 months resolved thereafter. So that that coincides pretty consistently with the Hatch-Waxman Litigation resolution in October of 2022.

[Andreas Argyrides:]

Okay, thanks for the clarity, guys. Look forward to catching up later and congrats again on the quarter.

[Operator:]

Our next question will come from the line of Serge Belanger from Needham & Company. You may begin.

[Serge Belanger:]

Hi. Good morning. Couple of questions for me. First one on the generic Remodulin product. Can you just talk about your outlook for that product for 2021? And then secondly, I think when the CRL was issued last fall, the pre-approval inspection and not being completed, have you gotten any color on that or that's going to be contingent on resubmitting the NDA for that to be scheduled? Thank you.

[Damian deGoa:]

Thanks, Serge. In relation to generic Remodulin, the treprostinil injection product, we feel pretty good about that. As I kind of mentioned, it's the same product, it's AP-rated, it's same active, same inactives. We've done a lot to make sure that we provide the exact same services that the patients and the physicians have come to expect, and we do it all with a lower cost. I think all those positives should lead to continued utilization of our products. We are in a COVID environment and right now the delivery is through intravenous, which means that patients would be getting a central line. And so that certainly is a consideration for physicians as they start new patients as to whether or not they're going to bring patients in for that procedure. So there is certainly some headwinds from COVID, but this is a life-sustaining drug, so patients are going to continue to be on it even during this COVID pandemic. So, we feel good about the product. I think we're doing it in a smart way in terms of the way that we're approaching it, not just as a generic, but kind of with this branded approach to promoting the brand or the generic. And so we expect positive things there. From the prior approval inspection perspective, that was not conducted, but we fully expect that the FDA will be doing an inspection. We don't know when or what the timing would be, but we would expect it to be sometime after we respond to the CRL.

[Operator:]

And I'm not showing any further questions in the queue.

[Damian deGoa:]

Great. Well, thanks, everyone, for joining us today and we appreciate your continued interest and investment in Liquidia. And we look forward to providing more progress throughout the year. Have a great day.

[Operator:]

Ladies and gentlemen, this concludes today's conference call. Thank you for participating. You may now disconnect.