MORRISVILLE, N.C. - Liquidia Corporation (NASDAQ: LQDA), a biopharmaceutical company, has announced the pricing of its public offering and concurrent private placement, expected to yield total gross proceeds of approximately $67.5 million. Additionally, the company has amended its Revenue Interest Financing Agreement with HealthCare Royalty to secure an additional $32.5 million, bringing the total gross proceeds to around $100 million.
The public offering consists of 6,460,674 shares of common stock priced at $8.90 per share. Concurrently, Liquidia has agreed to a private placement of 1,123,595 shares with Caligan Partners LP at the same price per share. The closing of the public offering, scheduled for September 12, 2024, is not contingent on the private placement, which, however, depends on the public offering's completion.
BofA Securities is the sole book-running manager for the public offering, with LifeSci Capital as the lead manager and Needham & Company as co-manager.
The funds are earmarked for the ongoing development of YUTREPIA™ (treprostinil) inhalation powder, targeting pulmonary arterial hypertension (PAH) and pulmonary hypertension associated with interstitial lung disease (PH-ILD). The proceeds will also support other clinical trials, including studies for pediatric patients and the development of L606, a liposomal treprostinil inhalation suspension.
Michael Kaseta, CFO and COO of Liquidia, expressed enthusiasm for HealthCare Royalty's continued support, emphasizing the company's strong financial position to advance its clinical programs. Clarke Futch, CEO of HCRx, recognized the tentative approval of YUTREPIA as a significant milestone and expressed confidence in its potential to meet the needs of patients with rare cardiopulmonary diseases.
The Fifth Amendment to the RIFA shifts $32.5 million to the second tranche, eliminating the third and fourth tranches. Liquidia will maintain a fixed payment schedule to HCRx, which has been extended to 2031, with a one-time payment due in 2025 now split into two payments in 2026. The overall payments to HCRx are capped at 175% of the advanced amounts, with a potential true-up payment based on HCRx's internal rate of return.
This announcement is based on a press release statement, and the public offering is made via a registration statement previously filed with the SEC. The shares in the private placement have not been registered under the Securities Act and will be sold according to exemption provisions.
Liquidia Corporation focuses on developing therapies for rare cardiopulmonary diseases and is advancing its proprietary PRINT® Technology for this purpose.
In other recent news, Liquidia Corporation has initiated legal proceedings against the FDA, challenging the agency's grant of a 3-year new clinical investigation exclusivity to United Therapeutics (NASDAQ:UTHR)' drug Tyvaso DPI®. This exclusivity has delayed the approval of Liquidia's own treatment, YUTREPIA™, for rare cardiopulmonary diseases. Meanwhile, United Therapeutics has voluntarily dismissed its complaint against the FDA regarding the acceptance of Liquidia's amended New Drug Application for YUTREPIA. Amid these developments, analyst firms such as H.C. Wainwright, BofA Securities, Jefferies, and BTIG have adjusted their stock price targets for Liquidia, while Goldman Sachs (NYSE:GS) retained a Neutral rating for United Therapeutics. On the financial front, Liquidia reported a decrease in revenue to $3.7 million in Q2 2024, down from $4.8 million in the previous year's quarter, but maintains a cash reserve of $133 million. These are the recent developments for both Liquidia and United Therapeutics.
InvestingPro Insights
As Liquidia Corporation (NASDAQ: LQDA) navigates through its public offering and private placement to secure funding for its clinical programs, investors and stakeholders are closely monitoring the company's financial health and market position. With the goal of providing a comprehensive view, we present key insights derived from InvestingPro data and tips that shed light on Liquidia's current financial metrics and analysts' expectations.
InvestingPro data highlights a market capitalization of approximately $683.46 million for Liquidia, indicating the company's size and presence in the biopharmaceutical market. Despite the challenges, Liquidia maintains a solid gross profit margin of 69.52% as of the last twelve months leading up to Q2 2024, reflecting the company's ability to manage production costs effectively relative to its revenue.
However, the company's performance has not been without concerns. Analysts have revised their earnings downwards for the upcoming period, and a sales decline is anticipated in the current year. This aligns with the reported revenue decline of -16.65% over the last twelve months as of Q2 2024. Additionally, Liquidia's stock has experienced a significant downturn over the last month, with a price total return of -23.61%.
InvestingPro Tips suggest that while Liquidia operates with a moderate level of debt and has liquid assets exceeding short-term obligations, the company is not expected to be profitable this year, with net income projected to drop. This is corroborated by an adjusted P/E ratio of -6.69, indicating that investors are paying more per share for a company that is not currently generating positive earnings. Furthermore, the company is trading at a high Price / Book multiple of 10.9, which could suggest that the stock is relatively expensive compared to the company's book value.
For readers interested in a deeper dive into Liquidia's financials and future outlook, InvestingPro offers additional tips, with more details available at: https://www.investing.com/pro/LQDA. There are currently 11 additional InvestingPro Tips that can provide further guidance on the company's performance and potential investment opportunities.
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