Liquidia settles all patent and trade secret litigation with United Therapeutics

Liquidia Corporation (LQDA) disclosed in an 8-K filed October 14 that its subsidiary, Liquidia Technologies, Inc., and United Therapeutics Corporation (Nasdaq: UTHR), or UTC, settled all ongoing litigation under an agreement dated October 13, 2026. The cases include patent infringement litigation over U.S. Patent Nos. 11,824,327, 11,357,782 and 10,989,494, and a trade secret and breach of contract case pending in the North Carolina Business Court. The 8-K gives no case numbers.

The settlement also ends the RareGen proceedings, antitrust and breach of contract claims that Sandoz Inc. and Liquidia PAH, LLC brought against UTC and Smiths Medical ASD, Inc., the defendants named in that case. Liquidia had to settle them as a condition of the UTC deal. The 8-K also says the settlement does not extend to indications other than PAH or to new treprostinil-containing products, so UTC may still assert patents against Liquidia's development programs.

What Liquidia gives up

The agreement changes the label for YUTREPIA, Liquidia's dry powder inhaled treprostinil. Liquidia will file with the FDA to remove pulmonary hypertension associated with interstitial lung disease (PH-ILD) as an indicated treatment, and it will stop marketing the drug for that use. Its 10-K says the FDA approved YUTREPIA in May 2025 for both PAH and PH-ILD, and that sales began in June 2025. The same filing puts diagnosed and undiagnosed U.S. PH-ILD prevalence at about 60,000 people, and says only three FDA-approved treatments exist for PH-ILD.

The releases take effect only after the UTC payments are made, the litigation is dismissed with prejudice, and the FDA approves the label change. For PH-ILD, the 10-K points to L606, a liposomal treprostinil licensed from Pharmosa Biopharm Inc. It says a worldwide, placebo-controlled pivotal study in PH-ILD has started. The filings give no results from that study or from L606's open-label work, so the PH-ILD path rests on data the company has not yet disclosed there.

Payments and counterparties

Liquidia owes UTC a net payment of $175.0 million, due within thirty business days of the effective date, after a payment from UTC to Liquidia PAH in the RareGen matter is taken into account. It also owes UTC $145.4 million in two equal installments, due on or before January 31, 2027 and April 30, 2027.

For the RareGen settlement, Liquidia agreed to pay Sandoz $21.75 million into escrow, Henderson SPV, LLC $19.05 million, and PBM RG Holdings, LLC $19.45 million. Sandoz held a 50% share of the RareGen proceeds under a 2018 promotion agreement. Henderson had funded part of the legal costs under a litigation financing agreement dated June 4, 2020.

PBM is a related party, controlled by Paul B. Manning, a stockholder with at least 5% of Liquidia's common stock who sits on the board. The 8-K says Roger Jeffs, the chief executive, Damian deGoa, a board member, and Russell Schundler, the general counsel, also own it. Disinterested board members approved the deal, but the 8-K does not explain how the $19.45 million was set.

Cash, covenants and the financing

Liquidia also needed consent from HealthCare Royalty Partners IV, L.P. (HCR) under a revenue interest financing agreement. HCR agreed to a letter of credit with a third-party lender tied to the settlement, and Liquidia agreed in return to raise the minimum cash covenant from $15.0 million to $45.0 million. The Seventh Amendment was signed October 13, 2026.

Liquidia reported revenue of $158.3 million for 2025, up from $14.0 million in 2024. Its net loss was $68.9 million, against $128.3 million a year earlier, and cash used in operations fell to $35.7 million from $93.4 million. Revenue comes from YUTREPIA sales and from profit sharing on Sandoz's generic treprostinil injection. The Sandoz settlement ends that promotion agreement once its payment is made.

The company held $284.2 million in cash and cash equivalents at June 30, 2026, and the 8-K puts the figure at $396.1 million at September 30, 2026. The 8-K also gives preliminary, unaudited third-quarter YUTREPIA net product sales of $222.7 million. Against that cash, the company owes UTC a net $175.0 million within thirty business days and $145.4 million more by April 30, 2027, before the payments to Sandoz, Henderson SPV and PBM.

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