Welcome to the Jefferies Global Healthcare Conference. My name is Kambi Ziazi. I'm a biotech analyst here at Jefferies. Today, it's my distinct honor and pleasure to welcome Liquidia Corporation CEO Roger Jeffs and CFO Mike Kaseta, coming off a recent drug approval for YUTREPIA. Welcome, gentlemen. Thank you, Kambi. Roger, maybe I'll allow you to have some open remarks because YUTREPIA was so recently approved. We'd just love to hear your perspective, anything about the approval, the label, and how the launch is going because you're already shipping. Correct. First, pleasure to be here with you, Kambi. Always enjoy coming to the Jefferies Conference. I'm here with Mike Kaseta, our Chief Financial Officer and Chief Operating Officer, and Jason Adair, who's our Chief Business Officer and Head of IR. If you have follow-up questions, I'd encourage you to talk to Jason after the meeting. As Kambi said, on May 23, we got approval for YUTREPIA for both PAH and PH-ILD. Very excited that we can launch into both indications simultaneously with YUTREPIA, which is an inhaled treprostinil formulation. It's enabled by a platform technology called PRINT. PRINT allows us to print in the lower end of the respirable range or manufacture dried particles in the one-micron uniform size, shape, and form composition. The beauty of that is that PRINT enables a product profile that is clearly differentiated on three critical elements: efficacy, safety, and convenience. If you look at safety, for example, because we're in the low end of the respirable range and preferentially fly to the lower distal airway, we avoid upper airway deposition. We avoid transient cough and throat irritation, which is dose-limiting for the incumbent brand product. The benefit of that also allows us to dose to a better effect. Because we don't have intolerance in the upper airway, we can drive to three or four X the current historical therapeutic dose standard for the incumbent brand. We can do it conveniently through a device that is a low-resistance device because, again, we don't need energy from a device to deaggregate the product. It comes as a monodispersed formulation. We think those are three critical and important levers. If you can differentiate on safety, efficacy, and convenience, that will port a significant share over time. I do not say that without precedence. If you look back in the PAH landscape, the first drug approved was epoprostenol. It was a short-acting intravenous therapy for patients who were in extreme class four condition. It required a central venous catheter. The risk of that drug, though, however, if that catheter was pulled or kinked during sleeping, for example, the patient could suffer rebound pulmonary hypertension and death. We developed Remodulin while I was at United Therapeutics. Longer half-life gave us a larger safety margin. The Flolan market converted almost uniformly in about 12-18 months. If you look at endothelin receptor antagonists, similar story. Actelion developed their first drug, which was Tracleer or bosentan. It was an endothelin A and B antagonist. It had potential for liver toxicity and was given twice a day. They then ported to a once-a-day formulation called ambrisentan or Letairis was the brand name. It was an endothelin A selective antagonist, so better on safety, better on convenience because it was once a day. That market ported in 12-18 months. Look directly at inhaled prostacyclins. Actelion had a drug called Ventavis. Twenty-minute half-life. It was recommended to be given six to nine times a day. Same efficacy as treprostinil. Tyvaso was developed as a four times a day, 12-18 months. That market converted almost universally to Tyvaso. There is good precedent if you can attend to one or two of those critical elements that you will port significant share. We have actually, as you heard, attended to all three critical elements: safety, efficacy, and convenience. We think that will speak and bode well for the presence of YUTREPIA in its product profile and uptake. Amazing. Maybe some other factors that will help YUTREPIA adoption. Maybe you could speak a little bit about parity pricing with Tyvaso DPI, and how will your voucher program enable rapid YUTREPIA adoption in addition to your suite of patient access services? Yeah, I'd love to have Mike talking there. Yeah, thanks, Kambi. As we mentioned at approval, we have priced the product at parity to Tyvaso DPI. One of the things that's most important for us is patients to be able to have access. We've also released a significant amount of patient support services. The suite of services are what patients are used to in their current treatment, with some additions, one of those being the 28-day voucher program that you mentioned. What this simply does is it allows patients to get on therapy immediately. It is available for all eligible patients and allows patients—it does take time to go through the adjudication process with reimbursement—allows patients to get on the product, see if it's something that they are able to tolerate, which we absolutely believe they will be able to, and then move straight into the commercial landscape. What we feel and what we're going to differentiate ourselves on is being able to provide services to patients to get access to YUTREPIA and then ultimately continue on therapy and support them through their entire patient journey. Now, in terms of actually shipping product, we saw the press release that you have shipped some product. When will patients actually—the first patients actually be receiving YUTREPIA? Yeah, so we were approved on May 23. Referrals began that day. Shipments occurred in five business days, which we think is record-setting pace. Patient scripts were filled starting yesterday. Amazing. Yeah. Wow. For launch, I guess, how robust is the supply of your DPI inhaler for YUTREPIA? And kind of what are kind of key KPIs you're going to be sharing and how much transparency will you be providing the street into launch metrics? Yeah, as it relates to commercial supply, we've been building commercial supply for the last couple of years. As Roger said, we were able to ship product within five days. We are very confident in our ability to supply as it relates specifically to the inhalers. We use a device that's manufactured by PlastiApe. It's manufactured in the millions. We purchase a very small percentage of their overall output. We have sufficient on hand in kits that are already sitting at specialty pharmacies, but also in our inventory as we move forward. We are very confident in our supply, very confident in our ability to service all of these patients as we move through what we believe is going to be a very successful launch. As it relates to metrics, we will have access to a lot of information around our launch. While especially as we are early in the launch phase, where revenue may not be the direct indicator of success of launch given the time of year that we're launching, we will be prepared to share other information, whether it's new patient starts, unique prescribers, things like that, where we will have access to that information. We do understand it's important for us to convey our confidence in the launch and do that with certain metrics. We will be prepared to do that starting with our first earnings call after launch in August. Great. One big question I get from investors is there may be a perception of a discrepancy in Salesforce, how Liquidia will compete with incumbents. Of course, we have a very experienced management team sitting with us right here, but would love to hear you go a little bit in more detail of how Scott and the work he's going to do is going to really help YUTREPIA adoption. Yeah, so we've done a number of Salesforce sizing exercises. We have about a 60-strong Salesforce team. There is ancillary support with medical affairs and other groups as well. Maybe what I'll talk about is the prescribing landscape a little bit. We think there's about 6,500 upper-tier critical prescribers for PAH and PH-ILD. About a third do PAH only, about a third do PH-ILD specifically, and about a third do both. We need to call on those 6,500 targets. Those 6,500 targets reside at about, and again, these are rough numbers, about 150 key centers of excellence and about 750 community centers. The sizing exercise is around our ability to call on those doctors with a certain level of frequency. We feel that is equal to the competitive brand. Remember, we're really detailing mostly just YUTREPIA, whereas they have multiple products that they have to detail. Our share of voice, we feel, will be equal, if not better. Excellent. You are kind of coming hot off of some great data you shared at ATS. I was there as well. What was kind of the reception there by doctors? Do doctors think that ASCENT Cohort A, the 20-patient data that is available so far, demonstrated a differentiated profile for YUTREPIA and PH-ILD? What is just the general reception there? Yeah, so we weren't approved when we were at ATS. So we had an ad board. So we were able to share our first sample, and we did have an abstract at ATS. The ASCENT study is a prospective trial in patients with PH-ILD. What we're trying to look at is, can we port the same tolerability and dosing profile that we've observed in PAH and PH-ILD patients? Because it's clear in the marketplace that Tyvaso DPI is having a struggle in terms of tolerance, probably because they're using an aggregated moiety on an FDKP backbone that requires a high-resistance device and the energy of that to disaggregate that product. Those patients with inspiratory issues due to their interstitial lung disease, as well as their PH, are struggling with that therapy and are coming off as fast as 40 days after starting. What we've seen with ASCENT is a very, very different picture than that. In the first 20 patients through eight weeks, we're seeing only one dropout due to a respiratory infection. We're seeing the ability to tolerate the drug with only mild cough. In fact, we did a sequential cough score. The cough is not changing from initiation of therapy to end of therapy, even though we're escalating doses by two to three orders higher. We're seeing to be providing a product profile that's quite different where the tolerability is there, which allows us to port the efficacy. We're doing it with this low-resistance device, which is easy and convenient for the patients, particularly with PH-ILD, to use. There was a really enthusiastic reception to that data. There were comments, and it's a spectrum. I think some people want to see—so we announced earlier that in March, we had enrolled a full sample, which is over 50 patients. Some docs want to see the full 50 patients through eight weeks. I can tell you now that it's looking very similar. We will present that data in the late summer, early fall. We do not think it will materially change from what we're seeing already. After that, we will show the 16-week data. We have a number of sequential data sets and opportunities to, again, promote the benefits that we're talking about on these three critical levers: safety, efficacy, and convenience. What caught me a little off guard, frankly, and even though I've been in this a long time, is it has generated a lot of enthusiasm for transitions, particularly from nebulized Tyvaso. The nebulized Tyvaso still enjoys about a 35% share, which is inexplicable, really, if you have a more convenient dry powder option. That alone tells you that the DPI is having issues with Tyvaso DPI. I think what I'm more encouraged about after hearing the doctors respond to that data was their eagerness to transition to nebulized patient base that's captive and retained, but looking for something different and better. I think we had talked about doing a sort of a biphasic launch, Kambi, where we would look for new patient starts, compete with those, prove ourselves, get breadth and depth of prescriptions. I think we're going to pull forward the transitions as well. I think based on the data we're showing and the clear differentiation, there's an opportunity to give those patients a potentially better option for them. Yeah, and ASCENT Cohort A is only just starting to develop that kind of important data set. You're also going to be directly—you’re going to have another cohort, Cohort B, that's going to be directly studied in transition patients. Maybe can you tell us a little bit about that? That'll be a directed—so in our original approval study called the INSPIRE, we had two patient populations with PAH. One were naive or de novo, and the other sample was transitions from nebulized Tyvaso. We've already shown in PAH, you can transition patients. You can do it rapidly, and you can just do it on breath equivalence with ease. The dose equivalence makes that quite simple. What we want to now do in PH-ILD, particularly with nebulized and Tyvaso DPI, is do a prospective study where we show directed transitions, show that patients that were either underdosed and underperforming can be tuned up because now they get a drug that's better tolerated, and we can get to a more efficacious dose. That study is going to start very, very soon. It'll be a similar size study in the 30-patient range or so. We don't think we need much more than that. We'll also have ongoing commercial data for transition patients that we're going to collect as well from centers. I think that's going to be a growing data set that will, again, push us to the preferred prostacyclin or first choice because, as some doctors are saying, the way Tyvaso DPI got approved, it was switches from nebulized. Some practitioners are starting on nebulized and then switched to DPI. Now they're saying, why ever start on a nebulized if you can use YUTREPIA from day one? I think, again, it's paradigm shifting. Really, what we're trying to do here is change the standard of care. I think YUTREPIA has the real and true opportunity to become the prostacyclin of not only best in class for the inhaled, but prostacyclin of first choice. The next thing we'll do is consider how do you take patients on oral prostacyclins who are having significant GI toxicity and move them to YUTREPIA, where we can solve for any off-target effect and give them the same dosing flexibility that they can get with oral if they tolerate it. Again, a lot of opportunity. The oral market's $2 billion in revenue currently in North America. Tyvaso DPI is doing $2 billion. If you broaden out your lens, we're already going to go after what is a $4 billion today opportunity. PH-ILD still hasn't been touched. It's only marginally penetrated. I think it's only in the low double digits. Huge opportunity for us. We don't have to necessarily displace competitive share. I think that will happen naturally, but just huge opportunity to do a lot of good things for these patients and our stakeholders. Yeah, and maybe just to dwell on that point a little bit longer, how do you counter-detail those oral prostacyclines today? What are some ideas you have long-term? Is there any data you could generate to help your efforts on that front as well? Yeah, so nobody's counter-detailed orals to date because United Therapeutics has both an oral program and one in development and an inhaled program. Their pitch was, "Choose what you want. We can give you both." Our view is going to be oral is potentially toxic. And if you can't tolerate the drug, you then can't titrate it well. You can't get the best benefit. And if YUTREPIA is direct to the site of injury, you're going to have a better outcome with potentially no GI toxicity. It is paradigm shifting. That is a behavioral change that's going to take more time, admittedly. Again, this is very terse and generic. Cardiologists tend to use orals. Pulmonologists tend to use inhaled therapies. We'll have to change behavior in the cardiology practice that there's now a prostacyclin that you can use for your patients who you before would have used either Orenitram or Uptravi, J&J's product. What we'll probably have to figure out, how do you transition the dose? Does it require a dose titration off of the oral and an up titration of inhaled, or can we do it sort of boldly and full force where we just switch them? That's the work that we need to do so we can inform the market how to do the oral switches. That will take more time than just penetrating the naive and transition markets in PAH and PH-ILD that it's currently looking at inhaled. Great. Maybe a question for Mike. You guys have been very consistent in saying, or relatively consistent, that you may be able to become profitable within three or four quarters from launch. What kind of gives you that confidence? Is that kind of maintaining that? Yeah, so everything Roger just said, we're very confident in the launch. We're very confident in the trajectory that we believe that we're going to see. We have a very efficient process. Our P&L is already fully loaded from an SG&A point of view. Through our PRINT technology and our manufacturing process, we have very efficient COGS. We are confident that within three or four quarters of launch that we can reach profitability. We ended Q1 with about $170 million of cash. As part of our agreement with HealthCare Royalty Partners, we have access to an additional $50 million tranche upon first commercial sale. We have formally requested that. We think together with our ability to achieve profitability, the cash that we have on hand, plus that $50 million, along with the revenue that we will earn from sales of YUTREPIA, we actually feel confident that we can reach that profitability and actually reach cash flow positivity on our current cash. In terms of the blocking and tackling required to get patient access from payers to YUTREPIA, what's kind of required from now until three to four quarters from now to get full reimbursement? Yeah, so I think what's important to understand is if you look at the diversification of patients, we believe about 50% of patients come through Part D, about 35% come through commercial, and 15% come through the government-mandated channels. What's important to understand is that the Part D market, there is no contracting in Part D. This is a patient-based doctor. These doctors have the infrastructure to go through the medical exception process, the prior auth process. As part of our suite of support services, we will have reimbursement specialists. If you look at barriers that are out there, Part D is in effect open now. We are not disadvantaged right now as no products are covered, and we're prepared to penetrate that. As it relates on the commercial front, our competitor has contracted in commercial. We believe we're giving modest rebates. We've been spending the last two years engaging with payers, talking about the value proposition that YUTREPIA is going to bring. We feel that we've done a really good job in doing that, built good relationships. Ultimately, we needed to get full approval to accelerate those discussions. That obviously has happened. We are in the process of having those conversations, and we are confident that we can achieve broad access here in the coming months. Right. And then the parity pricing is flat across doses, and you're thinking of doing also kind of multi-pack? Yeah, so as we stated, our pricing, we have four SKUs of product at 26.5 micrograms, 53 micrograms, 79.5 micrograms, and 106 micrograms. One of the things Roger talked about, our point of differentiation is being able to titrate to higher doses. Part of what we are going to do is create additional NDCs of combining capsules, which will be very important from a patient affordability point of view. That is something that we could not trigger until we got full approval. We have already been working through that to get that in place. Our plan is to hopefully have that in place in the coming months. Excellent. Roger, maybe any kind of important points that we haven't hit on yet on YUTREPIA? No, I think one thing to also, when you look at Liquidia and what value we can bring, we're building strength upon strength. We have a next-generation program called L606. It's a liposomal formulation suspension that we'll use through a next-gen nebulizer because we're trying to create, again, incrementally better options for patients. Instead of a four times a day therapy, that will be a twice-a-day therapy. We think that can be market-changing as well. It just gives us long extended terminal value. Excited about what we're bringing to not only PAH and PH-ILD patients and communities, but also what we're bringing to shareholders like yourselves. Yeah, and maybe building upon kind of the L606, how it increases your inhaled prostacyclin franchise. How many patients have achieved greater than 300 microgram twice-daily dose in the open label safety study? And how have the adverse events been in that study? Has it been consistent with prior ones? Yeah, so what Kambi is referring to is there was an open label safety study. It's ongoing now. We've completed enrollment at 28 patients. I won't talk specifically about doses other than to say we're getting to upwards of, again, three to four X equivalents to traditional forms of inhaled prostacyclin. Those patients have generally, the majority have been on the therapy between one and three years. We will start presenting that patient data set in the fall. Again, it's open label, but what you should expect to see there is because they're on the therapy and it's durable, good tolerability, it's porting clinical benefit, and they're doing it easily with a twice-a-day regimen. The beauty of the reason it's twice a day is we're trying to mimic the steady state that you get with a parenteral therapy. Everybody knows if somebody comes into the hospital class four sick on death's door, you hit them with intravenous prostacyclin. The reason is you can get them to a steady state dose, and then you can turn it up until you get them to a therapeutic benefit and stabilize them. What we're trying to now do with L606 is instead of peaks and valleys, where we give it four times a day currently, smooth it out, and then we can dose escalate. The beauty of the liposome is it brings down the Cmax because it's sustained release. You're going to get a really attractive safety profile because usually AEs are Cmax driven. We're getting the AUC that is in a pseudo-steady state. It's important there are other people trying to develop next-generation formulations, long-acting formulations, doing it as a single bolus dose. What they're seeing is they're getting a PK like this. It goes way up, and it comes down. While it is there at 24 hours, it's not really appreciably there. The consequence of that, at least in some early data I've seen, is that they lost treatment effect at the 24 hours. That's not what you want to do with a sustained release drug. You want sustained activity. Just the fact that you can detect minimal levels in the plasma is pointless. You want to show that you have sustained effect at the 24-hour period. Otherwise, just use YUTREPIA. You need to improve on the current standard. That should be the goal of these studies that are next gen, is can you develop a sustained action drug so that when patients sleep and wake up, they still have drug in the system and they still are benefiting even though they went to sleep and currently are basically withdrawing from the drug each night. Now, for L606, can you give us a lay of the phase three registrational study? What are kind of the key features for that study design? What is it slated to start? Yeah. Yeah, so it's actually pretty simple. We just need to replicate the original nebulized Tyvaso PH-ILD study. We have agreement with the FDA that a single study in PH-ILD patients will subserve for approval in both PAH and PH-ILD. It's a 505(b)(2) paradigm that we're going to pursue from a regulatory standard. Our goal is to start by the end of the year. It's about 350 patients that we are looking to enroll globally. A lot of the enrollment will be ex-US, Europe, Latin America, Asia, et cetera. We think, again, what finger in the air, it's from start to approved, you should think about four to five years. We have that full phase three development program to do, but we only have one study to do. I think the Insmed's program will require two studies as an NCE, so both in PAH and PH-ILD. My expectation is they'll take a few additional years to do both of those efforts. If they're successful, they're a 2030 plus reality. Nothing to worry about in the near term and a lot of work for both of us to do, frankly. Maybe quickly, because there's been a lot of litigation around YUTREPIA, what are the kind of key legal cases for Liquidia and how can they impact YUTREPIA's freedom to operate from your perspective today? I'll let Mike Kaseta answer, but I think there's a little bit left. There's been a lot of litigation. Yeah, so just to give everyone some background, UT has sued us on five patents. They've sued the FDA twice. They've filed a citizens' petition against our NDA. They've asked for four preliminary injunctions, and we got approval on May 23rd. What can affect launch? At this point, we are launched. We are dispensing to patients. We feel very comfortable with where we are. We've been successful in every lawsuit that they've brought against us. There are two lawsuits that are outstanding. One is the '327 patent, which is in PH-ILD. Our trial is scheduled in Delaware on June 23rd. It should be a three-day bench trial. We're very confident. We feel very strongly it is a very weak patent. We feel very confident that we will be able to invalidate that patent. We should get clarity in that towards the end of this year. The second patent is the '782 patent that they asserted against us two weeks before our NDA. It was a patent that was issued to them three years prior to that. They waited until two weeks prior to our NDA to assert it against us. They requested a temporary restraining order and a preliminary injunction. Last Friday, the judge in North Carolina, where they filed suit, just outright rejected the PI and the TRO on grounds of irreparable harm and most importantly, on the merits of the case. That will go through the normal process. I guess what I'll say is we've been ready. We have been successful. We will continue to be ready to support patients' rights to have an alternative option in treatment of PAH and PH-ILD. You also have asserted a patent on the higher dosing against United as well, correct? Yeah, we have. We have a patent for treatment at 100 to 300 micrograms that we believe clearly United Therapeutics is now infringing based on some additional NDCs that they have added to their label, which infringe that dosing regimen. That is a process that will be playing out as well in parallel with the other two. Roger, I just wanted to say congratulations on the approval of YUTREPIA. It was a long time coming, and we're happy to see it. That's going to be used by patients soon or has already been used by patients, perhaps. Any final words for the investor audience today? Yeah, again, for those of you who've been with us for the duration of this, we appreciate your persistence. I think what you're going to see is the tactical precision at which we come at this market. We've talked about the breadth of how we're looking at it, both from a clinical profile, from a payer landscape, from patient support services, and having product in hand at such a rapid pace. I think while we're a new entrant, we're not newbies. I think we're going to come at this fast and furious. Thank you so much. Thank you.