A U.S. court ruled in favor of United Therapeutics in a patent dispute, causing Liquidia's stock price to plummet.

Reuters, September 30 - On Wednesday, Liquidia (LQDA.O) shares plunged nearly 50% after a federal judge ruled that its lung drug infringes a key patent held by rival United Therapeutics (UTHR.O), delivering a major blow to the drug's commercial prospects.

The U.S. District Court in Delaware found that Liquidia’s dry powder formulation drug Yutrepia infringed two fundamental claims in United Therapeutics’ “327” patent.

This patent covers methods of treating pulmonary hypertension-associated interstitial lung disease (PH-ILD) using inhaled treprostinil and certain dry powder delivery technologies.

In the related order, the court rejected Liquidia’s motion to exclude evidence related to United Therapeutics’ patent ownership, ruling that Liquidia had received sufficient notice before trial and failed to timely object.

Raymond James analyst Ryan Deschner said: “This is a key element of Liquidia’s case, and denial of the motion to overturn will negatively impact the final judgment.”

The decision bolstered legal protection for United Therapeutics’ blockbuster inhaled treatment Tyvaso. As a result of the ruling, the company's share price soared 12.3% to $540.54.

Analysts at Leerink Partners said the court ruling affirmed that Yutrepia infringed a “valid UTHR patent,” essentially handing United Therapeutics a “victory.” RBC Capital Markets analyst Lisa Walter stated this “significantly impedes” Yutrepia’s path to competition.

“We respectfully disagree with the court’s ruling…and are fully prepared to pursue all available avenues for appeal,” Liquidia CEO Roger Jeffs said in a statement.

Jeffs said Liquidia plans to request that the U.S. Food and Drug Administration (FDA) remove the PH-ILD indication from Yutrepia’s label.

Liquidia shares fell to their lowest point in nearly four months. If the decline continues, the company's market capitalization will shrink by approximately $3.18 billion.

Analysts said a final judgment is expected in about a week.

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