Liquidia (LQDA) Q3 2025: Eutropia Captures 75% of Inhaled Prostacyclin Market Growth

2025-11-03 | By EarningsIQ Research

Liquidia’s rapid Eutropia launch is reshaping inhaled prostacyclin therapy, capturing the majority of new market growth and pushing the company to positive adjusted EBITDA far ahead of plan. With 85% script pull-through and broad payer coverage secured, Liquidia’s operational discipline and expanding clinical ambitions set the stage for a durable leadership position. Investors now face a new competitive landscape where ongoing litigation and label expansion potential will dictate the next phase of value creation.

Summary

• Eutropia’s Uptake Redefines Pulmonary Care: Physician adoption and patient conversion rates are outpacing legacy therapies, signaling a shift in standard of care.
• Financial Discipline Accelerates Profitability: Liquidia achieved positive adjusted EBITDA in its first full quarter post-launch, well ahead of prior guidance.
• Strategic Expansion and Litigation Loom: Broader clinical programs and ongoing patent litigation will shape Liquidia’s growth trajectory and risk profile into 2026.

Performance Analysis

Liquidia’s third quarter marks a pivotal inflection, with Eutropia’s commercial debut driving $51.7 million in net product sales and an 85% prescription-to-start conversion rate. The company’s disciplined expense management—keeping R&D and SG&A flat sequentially—enabled positive adjusted EBITDA of $10.1 million, a milestone reached much sooner than the previously forecast three to four quarters post-launch. Despite a modest GAAP net loss, the transition to positive net cash flow in September, and further gains in October, signal a robust operational foundation.

Prescription breadth and depth are both expanding: over 2,000 unique Eutropia scripts have been written, with more than 1,500 patients initiated and over 600 prescribers engaged nationwide. Importantly, 75% of new starts are prostacyclin-naive, while 25% are transitions from other therapies, indicating both market expansion and share capture. The majority of scripts remain in pulmonary arterial hypertension (PAH), but pulmonary hypertension associated with interstitial lung disease (PHILD) is steadily growing, reinforcing Eutropia’s cross-indication relevance.

• Prescription Pull-Through Drives Revenue: An 85% referral-to-start ratio is exceptional for a new therapy, supporting rapid revenue recognition.
• Voucher Program Fuels Early Adoption: Over 50% of new patients used the 28-day free voucher, accelerating trial and conversion.
• Market Share Shift Evident: Liquidia captured 75% of sequential inhaled prostacyclin revenue growth, outpacing incumbent Tyveso.

With channel inventories now normalized and payer contracts secured, the company’s revenue profile is set to reflect true underlying demand, reducing launch-phase volatility and supporting a more predictable growth curve.

Executive Commentary

Strategic Positioning

1. Eutropia: First-Choice Prostacyclin for PAH and PHILD

Eutropia, inhaled treprostinil, is rapidly becoming the default prostacyclin for both PAH and PHILD, with real-world usage showing strong uptake among both naive and transitioning patients. The product’s simplicity, tolerability, and palm-sized delivery device are resonating with both clinicians and patients, driving a shift away from legacy inhaled and oral therapies. Importantly, 10% of PAH scripts are switches from oral therapies, indicating that Eutropia is not just a replacement but a disruptor of established treatment paradigms.

2. Commercial Execution and Market Access

Liquidia’s commercial infrastructure is delivering on both breadth and depth, as evidenced by rapid prescriber adoption and an increasing number of high-volume centers. Contracts with the three largest commercial payers are now in place, and new-to-market blocks have been or are being removed, putting Eutropia on equal footing with competitors for patient access. The company’s patient support programs and field reimbursement teams have enabled smooth prescription pull-through and minimized payer friction, a critical factor in the therapy’s early success.

3. Clinical Expansion and Pipeline Leverage

Liquidia is strategically investing in clinical programs to expand the Eutropia franchise and advance next-generation candidates. Open-label studies are planned for patients transitioning from oral prostacyclins, and proof-of-concept work in idiopathic pulmonary fibrosis (IPF) and progressive pulmonary fibrosis (PPF) is under consideration. The L606 sustained-release formulation, with twice-daily dosing and improved tolerability, is set to enter pivotal global trials, potentially extending Liquidia’s leadership in inhaled prostacyclins into new indications and settings.

4. Litigation Overhang and Market Dynamics

Ongoing patent litigation with United Therapeutics remains a material uncertainty, with possible outcomes ranging from royalties to label changes or market restrictions. Management and legal counsel emphasized that the prescriber base appears largely insulated from litigation noise, but the ultimate judicial decision will have significant implications for Liquidia’s long-term market position and financial profile.

Key Considerations

Liquidia’s Q3 sets a new bar for rapid specialty pharma launches, but the sustainability of this trajectory will depend on several interlocking factors:

Key Considerations:

• Prescriber Penetration and Repeat Adoption: The pace of new prescriber onboarding and depth of prescribing will determine the durability of Eutropia’s early momentum.
• Payer Dynamics and Rebates: With commercial contracts now secured, monitoring rebate levels and net pricing will be essential as payer negotiations mature.
• Pipeline Execution: Timely progression of L606 and label-expansion studies could unlock additional addressable markets and reinforce the franchise.
• Litigation Outcomes: The breadth of potential legal remedies introduces binary risk, with possible royalty or label restrictions that could materially impact growth and profitability.

Risks

Patent litigation with United Therapeutics introduces material uncertainty, with outcomes ranging from status quo to significant commercial restrictions or economic penalties. Reimbursement headwinds, payer formulary shifts, and competitive responses from entrenched players could pressure margins or slow uptake. Clinical expansion efforts may encounter regulatory or operational hurdles, and the rapid pace of launch could mask underlying demand volatility or inventory imbalances if not carefully managed.

Forward Outlook

For Q4 2025, Liquidia management guided to:

• Continued positive net cash flow and adjusted EBITDA as Eutropia adoption expands.
• Sustained investment in R&D to support pipeline and indication expansion.

For full-year 2025, management reiterated its focus on:

• Maintaining financial discipline while reinvesting in innovation and clinical programs.

Management highlighted several factors that will influence future performance:

• Broader payer access and removal of market access barriers should support further growth.
• Clinical data readouts and progress on L606 will be key milestones for 2026 and beyond.

Takeaways

Liquidia’s Q3 performance signals a decisive market shift, with Eutropia’s differentiated profile capturing the majority of new inhaled prostacyclin growth. The company’s operational discipline and payer strategy have enabled early profitability and set a solid base for reinvestment. However, the outcome of ongoing litigation and the pace of clinical expansion will define the next chapter for investors.

• Rapid Launch Execution: Eutropia’s market entry is driving both new patient starts and transitions, supporting a robust revenue ramp and positive cash flow ahead of plan.
• Strategic Optionality: Pipeline programs and indication expansion create multiple paths for value creation, but also require continued execution and capital allocation discipline.
• Litigation Watchpoint: Investors should closely monitor legal proceedings and be prepared for a range of outcomes that could reshape the risk-reward profile in 2026.

Conclusion

Liquidia’s Q3 results demonstrate a rare combination of rapid commercial traction, operational discipline, and strategic pipeline investment. While litigation risk remains, the company’s ability to redefine inhaled prostacyclin therapy and deliver early profitability positions it as a formidable competitor in specialty pharma. Investors should track both the evolving legal landscape and the company’s progress on clinical expansion as key determinants of long-term value.

Industry Read-Through

Liquidia’s swift capture of inhaled prostacyclin market growth signals a broader trend toward rapid specialty drug adoption when product differentiation is clear and payer access is secured. The company’s success with Eutropia highlights the importance of patient-centric device design, robust market access infrastructure, and aggressive prescriber engagement. For other specialty pharma and rare disease players, Liquidia’s model underscores the potential for accelerated profitability post-launch—provided reimbursement, operational discipline, and pipeline execution are tightly managed. The litigation overhang also serves as a reminder that IP risk remains a critical gating factor for innovation-driven biopharma companies.

LQDA Healthcare Pharmaceuticals Specialty Pharma Pulmonary Litigation Product Launch Market Access