Shares of Liquidia crashed as much as 57% on September 30 after a Delaware federal court ruled that its flagship lung drug infringes a valid United Therapeutics patent — raising the possibility that the product could temporarily be pulled from U.S. shelves altogether.
A Single Ruling Wiped Out More Than Half the Company's Value. LQDA plunged roughly 52% to about $34 on September 30 , then continued sliding to $26.90 by October 1 — down from nearly $74 just days earlier. Trading volume skyrocketed to 22.95 million shares, approximately 19 times normal levels.
United Therapeutics, by contrast, rose 13%. The market is pricing in a scenario far worse than a label tweak.
The Real Danger Is an FDA Withdrawal Order, Not Just a Label Change. United Therapeutics believes it is entitled to an order instructing the FDA to withdraw approval of Liquidia's entire drug application. If granted, the drug could be removed from the U.S. market until the FDA approves new labeling that drops the PH-ILD indication.
Potential remedies range from removing PH-ILD from the label to a broader restriction on product availability. Even a temporary market removal would interrupt a product generating $170 million per quarter.
The Drug Was on Track for $1 Billion — Now That Forecast Is in Jeopardy. Q2 2026 net product sales reached $170.4 million, a 31% quarter-over-quarter increase, with the drug approaching 30% of the inhaled market.
Management had guided to more than $1 billion in net revenue by 2027. PH-ILD — the exact indication at issue — is where doctors say the drug's tolerability advantage matters most. Losing that label claim would blunt Liquidia's strongest growth lever even if the drug stays available for its other approved use, pulmonary arterial hypertension.
Liquidia's Appeal Is a Long Shot That Buys Time, Not Certainty. CEO Roger Jeffs said the company "respectfully disagrees" with the ruling and plans to pursue all appellate options while submitting a label amendment to the FDA to voluntarily remove PH-ILD.
The company acknowledged it cannot currently estimate the range of potential financial exposure.
United Therapeutics will also seek damages for past infringement, including a possible royalty on all prior sales. Appeals could take a year or more, during which uncertainty will weigh on every forward estimate. At $26.90, the stock trades at roughly 19× trailing earnings — a fraction of its five-year median — reflecting a market that now sees Liquidia's blockbuster trajectory as deeply impaired.