Liquidia Stock Soars More Than 26% After $380.7 Million Settlement Ends Legal War With United Therapeutics

NEW YORK — Shares of Liquidia surged Wednesday after the drugmaker agreed to pay United Therapeutics $380.7 million to settle a yearslong legal fight over its inhaled lung disease treatment, removing a major threat that had wiped out more than half of the company's market value just weeks ago.

Liquidia shares were up $7.07, or 26.4%, at $33.88 in late-morning trading on the Nasdaq. The stock had jumped as much as 44.3% to $38.68 in premarket trading, its highest level since May, before giving back some of those gains.

The shares closed Tuesday at $26.81, down 3.1%. Trading volume surged as investors reacted to the news.

Six lawsuits resolved

The settlement, announced after the market closed Tuesday, ends six lawsuits between the two companies involving patents, trade secrets, contracts and antitrust claims related to Yutrepia, Liquidia's inhaled dry-powder form of the drug treprostinil.

Under the agreement, Liquidia will continue selling Yutrepia to treat pulmonary arterial hypertension, or PAH, a rare and serious condition involving high blood pressure in the arteries of the lungs.

But Liquidia will stop promoting the drug for pulmonary hypertension associated with interstitial lung disease, known as PH-ILD. The company said it has asked the Food and Drug Administration to remove PH-ILD from Yutrepia's label and will not appeal a recent court ruling in the case.

United Therapeutics said in a regulatory filing that Liquidia would also end clinical trial groups studying PH-ILD and stop publishing related data as part of the settlement.

Payment terms

Liquidia will pay United Therapeutics a net total of about $380.7 million in installments through 2027. That includes a net payment of $175 million within 30 business days and a further $145.4 million due by 2027.

Liquidia CEO Roger Jeffs said the agreement allows the company to shift its focus from litigation to expanding Yutrepia sales and developing new treatments.

The company also disclosed preliminary third-quarter Yutrepia sales and its cash position alongside the settlement, which may have helped ease investor concerns about the cost of the deal. Liquidia said it will provide further financial and pipeline details during its third-quarter earnings call in November.

From steep losses to relief

The settlement follows a sharp decline in Liquidia's stock last month. A Sept. 30 court ruling found that the patent claims asserted by United Therapeutics were valid and infringed, raising the possibility that Yutrepia could be pulled from the market entirely.

Liquidia's shares plunged 57% after that ruling, falling from $70.69 to $30.26. Even after Wednesday's rally, the stock remains well below its level before the decision.

By settling, Liquidia avoids the risk of losing the ability to sell Yutrepia altogether, a scenario that would have threatened the company's main source of revenue.

Trade-offs for investors

While the agreement removes a major legal overhang, analysts noted it comes at a significant cost.

The settlement amount represents a large share of Liquidia's cash, with one analysis estimating it would consume about 96% of the company's available funds. The agreement also permanently removes PH-ILD, a patient population of more than 60,000 people in the United States, from Yutrepia's approved uses.

Liquidia has not disclosed how much of its recent sales came from PH-ILD patients, a key figure investors will be watching for when the company reports quarterly results.

Analyst reaction

BTIG analyst Julian Harrison upgraded Liquidia to buy from neutral and set a price target of $70, well above the stock's current level. Analysts covering the company have an average price target of about $64.

Earlier this month, after the court ruling, Wells Fargo kept an equal weight rating on the stock and cut its price target to $30 from $108.

Win for United Therapeutics

For United Therapeutics, the settlement narrows competition for its own inhaled treprostinil product, Tyvaso, particularly in the PH-ILD market. United Therapeutics shares fell about 1% in Wednesday trading.

The two companies have been locked in legal battles for years over Liquidia's efforts to bring Yutrepia to market as a competitor to Tyvaso.

Pipeline ahead

Liquidia said it will continue advancing Yutrepia and its experimental treatment L606, a sustained-release formulation of treprostinil that is in late-stage development.

The company, based in Morrisville, North Carolina, launched Yutrepia in 2025 and quickly turned profitable on the strength of its sales, reporting $51.7 million in net product sales in the drug's first full quarter on the market.

Investors will look to Liquidia's November earnings report for details on Yutrepia sales trends, the impact of losing the PH-ILD indication and how the company plans to fund its operations and pipeline after the settlement payments.

The company's ability to grow Yutrepia sales in the PAH market will be key to determining whether the settlement ultimately proves to be a favorable outcome for shareholders.