Liquidia Corporation (LQDA) Earnings Call Transcript & Summary

Good morning, ladies and gentlemen. My name is Dilem, and I'll be your conference operator today. I would like to welcome everyone to the Liquidia conference call to discuss a regulatory update for LIQ861. [Operator Instructions] I would like to remind everyone that this conference is being recorded. I would now hand the conference over to Jason Adair, Vice President, Corporate Development and Strategy.

Thank you, and good morning, everyone. Welcome to Liquidia's conference call to discuss the regulatory updates for LIQ861. Before we begin, let me remind you that today's call will include forward-looking statements pursuant to the Private Securities Litigation Reform Act of 1995 relating to, among other things, our expectations concerning next steps in the regulatory review and potential of 861 -- excuse me, approval of 861. Such statements represent management's judgment as of today and may involve significant risks and uncertainties that could cause actual results to differ materially from expected results. Please refer to our press release this morning and recent quarterly and annual filings with the SEC, which are available at sec.gov or from Liquidia's website at liquidia.com for information concerning risk factors that could cause such differences and otherwise affect the company. I'd now like to turn the call over to Neal Fowler, CEO of Liquidia.

Thanks, Jason, and thank you all for joining us this morning. On the call with me today is also Dr. Tushar Shah, Chief Medical Officer and Head of R&D, as well as other senior members of our company who are available to answer questions, if needed. This morning, we announced that the FDA has issued a complete response letter related to the NDA for LIQ861 for the treatment of pulmonary arterial hypertension or PAH. Consistent with the press release, the items that led to the CRL were related to the need for additional information and clarification of chemistry, manufacturing and controls, or CMC data, pertaining to the drug product and device biocompatibility as well as a delay in the preapproval inspections related to COVID-19. Liquidia is confident in our ability to address the items raised in the CRL, and we do not believe they present a barrier to the ultimate approval of 861. The FDA also reconfirmed the need to conduct on-site preapproval inspections of 2 Liquidia manufacturing facilities located in the U.S. We do believe that some of the items raised in the CRL may have been addressed in the normal course of a preapproval inspection. However, as previously disclosed and has been the case for other companies in our industry, COVID-19-related travel restrictions have hindered the FDA's ability to conduct these inspections to date. It is important to highlight that the CRL did not cite the need for additional studies in areas related to toxicology or clinical pharmacology nor did the FDA request additional clinical studies to further support the approval of the 861 application. As we recently shared during the third quarter earnings call, we are anticipating a launch in the second half of 2022. We remain confident in that time line as we do not believe that items in the CRL will change our projection. We remain fully committed to working closely with the FDA, and I am confident in our team's ability to provide them with the information required to support the approval of 861. We continue to be excited about the opportunity in 861. This excitement is supported by the strong set of clinical data that we have released over the last 18 months, with now more than 70 patients who have received 861 for more than 2 years and by their choosing. We will stay true to our course and firm in our commitment to advance 861 to these patients. And now, operator, we are prepared to take questions.

[Operator Instructions] I show our first question comes from the line of Serge Belanger from Needham & Company.

First one, Neal, can you just talk about the next steps here? Is it meeting with the FDA? And just getting clarity -- and if you can provide any clarity on the CRL issues related to the drug product and device biocompatibility.

Sure. We'll be glad to, Serge. I will on, for all of the folks. I'll probably defer at the beginning here in the questions to Tushar, and I'll let Tushar take that and I'll add as appropriate. Tushar, you want to take these?

Yes. Thanks, Neal. So Serge, the kinds of items that they're asking, when we talk about drug product and device biocompatibility, these are the typical sections of a CMC portion of an NDA, where you have a drug and a device combination product involved. And as you know, we've been working with the FDA through the information request that they have been providing on the CMC matters. And we have been addressing them. Obviously, there are a few items that we weren't able to address to their satisfaction at this point. But the challenge we have is there's no opportunity for dialogue in these discussions, right? So we now know where the areas are that are still open, and we will request an FDA meeting as quickly as we can and make sure that we have full understanding, clarity of what they want and that the information we're providing is going to address their concerns. And as I said, these are all CMC-related matters. So the good news is there's no clinical concerns. There's no areas on toxicology or [ clin pharm ]. These are the areas that typically take much longer time to resolve. So we're very confident that these CMC questions can be resolved well within the time frame that we've stipulated as to when we would expect to launch the product late next year -- late in '22.

And Serge, the only other thing I would add to that, we'll move to get that being set up with the agency as quickly as possible. Obviously, we've got the holidays kind of ahead of us here a little bit. So it will be probably a little bit tricky navigating that, but we'll seek to do that as quickly as possible.

Okay. And then just a couple of follow-ups. So it sounds like they've completed the clinical review portion of the data in the NDA. And then, any idea of when the preapproval inspections can be completed?

So at this stage, because we've received a CRL, when we submit the response is when they would -- FDA would then -- we would anticipate they would look to do the inspections. I think with the pandemic, as you know, they've been very challenged to do these. We anticipate a lot of companies are struggling. And in the best case scenario, we would have anticipated sometime mid next year would have been the earliest they will probably get to an inspection. And so it's hard to project exactly, but that would be our expectation that once we submit the response, we would be then in the queue to get the inspection time.

I show our next question comes from the line of Georgi Yordanov of Cowen and Company.

So I just have a couple from us. So I guess, can you also remind us, following up on the previous question, where the manufacturing sites are located? Are they in the U.S.? And then I have just a follow-up on the CRL and the litigation.

Sure. Sure. I'll take the first one and we'll stand by for your second one. Sure. The 2 sites are in R&D in the U.S. One of those sites is at our facility here where we manufacture particles, an active ingredient to kind of create the powder. That's your Research Triangle Park in North Carolina. The other site is in Florida, where we conduct all of our packaging. So they're both domestic here in the U.S.

Got it. And do you anticipate the resubmission to be a Type I or Type II?

So maybe I can take that, Neal.

Sure, Tushar.