Episode Details

Liquidia (LQDA) Q2 2026 — Revenue $171.7M vs a $168.5M bar - a BEAT. Net income $74.7M, a record. Diluted EPS $0.74 vs $0.758 estimated looks like a miss, but BASIC EPS was $0.84. The 8-K was accepted 6:45am ET, so August 12 IS the reaction session: $88.05 to $84.00, down 4.60% intraday. Liquidia has added +$38.4M, then +$39.8M, then +$40.5M of quarterly YUTREPIA revenue - three quarters running, a spread of $2.1M on a mean of $39.6M. That is a straight line, not a growth curve. The growth RATE fell from 74% to 44% to 31% and the market sold it 4.6%, but a constant numerator over a growing denominator MUST produce a falling percentage. The deceleration everyone reported is arithmetic. THE CALL: SELL (3/5, A STRAIGHT LINE, NOT A GROWTH CURVE) — base-case value ~$57.0 vs ~$84.0 today. KEY METRICS: - CALL: SELL 3/5, fair value $57.00 vs $84.00 - about 32.1% BELOW the price, 32.8% below the Street's $84.88 average and 23.5% below its $74.50 MEDIAN. Bear $10, base $58, bull $93, weighted 20/55/25. - THE ANGLE: YUTREPIA sales went $51.7M, $90.1M, $129.9M, $170.4M. The sequential ADDS were +$38.4M, +$39.8M, +$40.5M - three quarters within $2.1M of each other. Linear, not exponential. The rate fell 74% to 44% to 31% purely by division. - THE EPS MISS IS THE SHARE COUNT: basic EPS $0.84, diluted $0.74. Weighted basic 88,887,744 vs diluted 101,397,028. In the year-ago LOSS quarter 14,273,959 equivalents were excluded as anti-dilutive. Turning profitable switched them on; the denominator rose 18.5% while shares issued rose 4%. - THE CATEGORY, FROM UTHR'S OWN 8-K: total Tyvaso $452.6M, DOWN 4%. Tyvaso DPI +$11.4M of which $9.4M was PRICE. Category = $623.0M vs $476.1M, +30.9%. Liquidia's share went 1.4% to 27.4%. - THE LEADING INDICATOR: prescribers went 600 (Oct) to 860 (Feb) to 980 (Apr) to 1,100 (Jul) = 65, then 60, then 40 new prescribers per month. Patient starts stayed flat at ~420/month and conversion held above 85%. A reach problem, not an execution problem. - WHAT DID NOT CLEAR: Note 14 lists FIVE live United Therapeutics proceedings. The '327 patent trial was held JUNE 2025 and the decision is still PENDING - 14 months - with UTHR seeking to remove YUTREPIA from the market. Trade-secret trial is set for January 2027. Meanwhile legal fees FELL $5.5M, flattering the margin. - REVERSE DCF: EV $8.41B at 10.5% and 2.5% terminal needs $673M of free cash flow forever = $1.84B of revenue in perpetuity, or 74% of the entire $2.49B category. Run rate today is $686.7M. What to watch: UP: revenue $171.7M beat, product gross margin 93.7%, operating margin 49.8%, record net income $74.7M, 27.4% of the US inhaled treprostinil category taken from 1.4% in four quarters. DOWN: new prescribers per month have gone 65 to 60 to 40; five United Therapeutics lawsuits are live with one verdict pending since a June 2025 trial; the 8.5% tax rate is temporary. Also on YouTube: @ChargedAlpha DISCLAIMER: For informational and educational purposes only. Not financial advice. Do your own research before any investment decision. Learn investing free in the Charged Alpha app: https://chargedalpha.com/app?source=youtube&ref=video Educational only. Not financial advice.