Liquidia settles disputes with United Therapeutics for net payments of $380.7 million
Key Facts
Liquidia announced a settlement with United Therapeutics on October 13, 2026, involving total net payments of $380.7 million and allowing continued marketing of its drug YUTREPIA for patients with pulmonary arterial hypertension. The company said the payments are spread across 2026 and 2027 and include settling the interests of parties in the competition dispute. In exchange for continued marketing of the treatment for this disease, Liquidia must remove the indication for pulmonary hypertension associated with interstitial lung disease from the drug's label. It must also immediately stop promoting YUTREPIA for that use, according to United Therapeutics' filing with the U.S. Securities and Exchange Commission. The agreement settles pending lawsuits between the companies, with their dismissal still contingent on the initial payment.
Under the financial terms disclosed by Liquidia, an initial net payment of $175.0 million to United Therapeutics is due within 30 business days of the agreement taking effect. Liquidia is also committed to additional payments to the same company totaling $145.4 million, payable in equal installments. The financial arrangements associated with the settlement include obligations involving bank letters of credit, according to an amendment to the financing agreement filed with the SEC. Liquidia secured its lender's consent to these obligations under the existing financing agreement. The amendment designated them as "permitted indebtedness," establishing their contractual treatment within the company's financing arrangements.
The settlement comes as Liquidia reported preliminary, unaudited net sales of YUTREPIA of $222.7 million in the third quarter of 2026. The company had recorded net sales of the drug of $170.4 million in the second quarter of the same year, according to its previous quarterly results. Its cash and cash equivalents stood at $396.1 million at the end of September 2026, according to its accompanying financial disclosure. Liquidia describes pulmonary arterial hypertension, for which the drug will continue to be marketed, as a "rare, chronic and progressive disease." According to the company's description in its second-quarter results, the disease results from the stiffening and narrowing of the pulmonary arteries and can lead to right heart failure.
The agreement followed a legal setback for Liquidia, as a Delaware court ruled on September 30, 2026, that claims in the disputed patent were valid, according to a litigation update published by the company. The court concluded that Liquidia infringed those claims, in a ruling addressing multiple claims asserted by United Therapeutics. At the same time, the court found the other asserted claims invalid, according to the same update. United Therapeutics had sought an injunction that would restrict YUTREPIA's availability in the market before the settlement was reached. Under the agreement, Liquidia waived "any and all rights of appeal" relating to the ruling preceding the settlement.
The settlement between the companies covered disputes extending beyond patent litigation to trade secret claims, according to SEC filings. United Therapeutics' disclosure excluded from the settlement the possibility of pursuing its trade secret claims against Robert Roscigno personally. The filing stated that the company "may continue its trade secret claims against Dr. Roscigno." In a separate arrangement linked to the settlement, termination of the promotion agreement between Liquidia and Sandoz is contingent on satisfying the payment condition, according to the filed settlement and termination agreement. Certain obligations remain in force after termination, as the agreement provides for the promotion arrangement to end "except for provisions that survive."
In the market, Liquidia shares rose about 40% in after-hours trading on the day the settlement was announced, according to an Investing.com report published on October 13, 2026. On the legal implementation, the companies will file requests to dismiss the covered lawsuits with prejudice after United Therapeutics receives the initial payment, according to the agreement. Liquidia plans to provide a broader update on its performance, financial position and development priorities during its third-quarter earnings call scheduled for November 2026, according to the same report. The payment schedule sets January 31, 2027, as the due date for the first installment of the additional payments. The next installment is due on April 30, 2027, with any due date falling on a holiday moved to the next business day, according to the settlement agreement.