Key Highlights

  • United Therapeutics shares are trading at $582.93 in Thursday's session, up 7.57%.
  • A Delaware federal court found Liquidia infringes two claims of the '327 Patent covering inhaled treprostinil for PH-ILD.
  • United Therapeutics will seek an FDA order withdrawing approval of Liquidia's Yutrepia, plus damages for past sales.
  • A brokerage upgraded the stock to Buy with a $728 price target after a jump of about 12% to 13% in the prior session.

Patent Ruling Extends a Sharp Rally

United Therapeutics (NASDAQ:UTHR) is extending a powerful rally in Thursday's session after a federal court sided with the Silver Spring, Maryland-based rare disease company in its patent fight with Liquidia (NASDAQ:LQDA). The stock is trading near $583, up 7.57%, following a gain of roughly 12% to 13% in the prior session.

The shares are now approaching their 52-week high of $609.35.

The Court Finds Two Claims Infringed

The U.S. District Court for the District of Delaware found that Liquidia induces infringement of claims 1 and 14 of the '327 patent by Marketing Yutrepia for pulmonary hypertension associated with interstitial lung disease, or PH-ILD. The court also concluded Liquidia failed to prove those claims invalid.

The patent covers a method of improving exercise capacity in PH-ILD patients through inhaled treprostinil at specific dosages.

The Remedy Is Still Open

United Therapeutics believes it is entitled to an order directing the FDA to withdraw approval of Liquidia's application for Yutrepia, which could remove the product from the U.S. market until labeling that omits PH-ILD is approved. It also intends to seek damages for past infringement, potentially including a Royalty on past sales.

The court gave both sides one week to submit an agreed form of final judgment, and Liquidia has said it plans to appeal. President and Chief Operating Officer Michael Benkowitz said the company is ready to support a seamless transition to Tyvaso or Tyvaso DPI should PH-ILD be removed from the Yutrepia label.

Upgrade and Insider Selling Pull in Opposite Directions

A brokerage upgraded the stock to Buy with a $728 target, supporting the rally. Against that, a trust tied to the CEO's family has been selling shares under a trading plan, and the final judgment and any appeal could still change the outcome.