Yet Another Value Podcast - Lionel Hutz on Liquidia's patent battle $LQDA

Episode Date: December 19, 2022

Lionel Hutz discusses his thesis for Liquidia (LQDA) and why the thinks they are likely to win their patent battle against United Therapeutics (UTHR). Lionel's LQDA write up: https://lionelhutz.substack.com/p/waiting-with-bated-breath-for-liquidia Chapters  0:00 Intro  2:50 LQDA overview  8:05 Diving into the patent background  16:10 Breaking down the conflicting rulings on the '793 patent  19:55 Why the PTAB ruling is the most important for '793  21:55 What's so unique about the judge's ruling on '793  28:30 Why PTAB ruled the '793 patent invalid  37:40 LQDA's primary argument for invalidating '793  43:30 Discussing the expert reports around the '793 patent  53:30 Timeline to monetization and why delaying LQDA is so important for UTHR  59:00 LQDA's upside if they win  1:13:00 LQDA's cash runway

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like this podcast, I mean a lot, if you could rate, subscribe, review it, wherever you're watching or listening to it. With me today, I'm happy to have on for the second time. My friend, Lionel Hutz, Lionel is a friend. He's a former patent lawyer. You guys might remember him from the Twitter podcast and most importantly he was the first person to get one of these brand new yet another value podcast that so lionel how's it going man it's going great thank you so much for for having me on for a second time i'm excited to be here and i'm excited to be rocking my yet another value podcast hat even if your viewers may not be able to see it behind we're going to blur it out but i appreciate it looks beautiful but let me start this podcast the way i do every podcast first the

disclaimer to remind everyone that nothing on this podcast investing device that's always true but that's going to be particularly true today we're going to be talking about like this is a sub 500 million market gap company so there's extra risk with liquidity small size and then this is a you know it's a basically pre-revenue micro crab drug company that's undergoing a patent issue so there's just all sorts of added risks here so everyone should just remember please do your own work there's a lot of risk here this is an investing vice consult a financial advisor second a pitch for you my guess you know people might remember you coming on and we were just pounding the table twitter is going to close twitter is going to close they might but we've talked about a lot of really interesting situations here

a couple of guests of the podcast i know have talked to you about a lot of interesting legal situations there but you just do great work and i think this is going to be great uh this is probably going to be our last our last stock specific podcast of the year and i think we saved a great one for last the company we're going to talk about is liquidity the ticker is lQDA there's so much to talk about with this one i always joke i don't know how sometimes i can't fit a podcast an hour we could probably take this to our podcast we're going to try not to i've talked a lot i'll turn it over to you what's liquidity and why are they so interesting yeah liquidity is is a super interesting company as you mentioned uh they are developing and a dry powder inhaled for prostinil uh

for pulmonary hypertension related indications, related diseases. It is a spate, pulmonary hypertension is a pretty terrible group of diseases. You know, the gist of it is you get either, you know, inflammation or constricting of the arteries in your lungs. And your right heart has to pump extra hard to get blood into your lungs. and, you know, patients end up typically dying of right heart failure. It's got a pretty high mortality rate, particularly for some forms of pulmonary hypertension. And the treatment options are really not great. You have oral medications, you have a couple of inhaled medications, and you have injectables.

And, you know, the options outside of the inhaled drugs that are available are really unpleasant. The oral medications have terrible GI side effects. Typically, they're also not capable of delivering super high dosage. So that means that as the disease progresses, you then have to move to a delivery method, which can actually get you that higher dosage, and that is typically the inhaled version next. So you go from an oral medication to an inhaled medication, and that inhaler serves as the bridge before patients typically get to the last stage, which is the injections, which are delivered via a pump, a subcutaneous pump. there's a lot of issues around sepsis and pain at injection site. And, you know, it's really only used because it's the vehicle that can deliver the highest dosages.

And once you're on the injected version, it's sort of just, you know, a ticking clock until patients die of this disease or, you know, the related. a heart failure. So it's a pretty nasty disease and there's just not a lot of great options out there. So Liquidia is developing. Can I just add one thing? It's a really nasty disease, but I do think this will be important as people think it is also a very rare disease. So, you know, we're talking about a subset of patients that numbers in the low thousands, if I remember correctly. Now there are other, but this is, it's very rare. It's what's known as an orphan disease. This is going to, the treatment, it doesn't need an orphan drug. But I just think that's important to note for people, who are thinking, it's not like one in every four people you run into on the street or having this.

This is an awful, awful disease, but fortunately quite rare. Yeah, yeah, that's an important note. So, you know, Liquidia is developing this dry powder inhaled troprostanil. And it's, you know, the incumbent in the space, which we'll talk about in just a minute, I'm sure, United Therapeutics, has approval for a, essentially the same compound more or less. And it's a proof for two indications. So pulmonary arterial hypertension and pulmonary hypertension with interstitial lung disease. So on your point of what are the patient pools, what are the population sizes? We're looking at, you know, something like 12,000 for pulmonary arterial hypertension and something like 30,000 for pulmonary hypertension with

interstitial lung disease. Now I've talked to a couple of pulmonologists who say that those numbers might be a little higher. They might even be double. But, but again, we're not talking about something that afflicts, you know, 2 million, 10 million Americans in truth. Perfect. Yeah. That's great. So liquidity is developing a drug. UTHR has the leader in the space. It's called Tyboso. I think it's worth noting Tyboso as of Q3. It is a $1 billion run rate drug, you know, $1 billion run rate drug, orphan drug, the pricing tens of thousands of dollars for dosage, if I remember correctly. Like, this is, it is a high cost drug, extremely profitable, brings in a lot of revenue for UTHR.

So, you know, liquidity is coming out with competitor. Right there, you can see there's going to be some drama. There's, you're talking about literally billions of dollars in value. So, yeah, where do you want to go next on this? We can talk liquidity as drug. We can talk about the reason we're here, the patent stuff and everything. What do you think we should hit next? Yeah.

Let's kind of dive into the basics of, I guess, how we got to this litigious stage. Go ahead. So United Therapeutics has a patent portfolio around Traprostinil that relates not just to the manufacturer of Traprostinil itself, but also the delivery method. So the inhalable delivery method. And so Liquidia, as soon as it was announced that they were, you know, they filed their NDA, their new drug application. And, you know, United Therapeutic sees this. They say, you know, this is a blockbuster drug for us. We want to make sure that we protect our monopoly here.

And so they sue Liquidia for patent infringement. They sue them just a few months after the NDA. was filed, and they sue them for two manufacturing-related tropostinil patents. A month after they file suit, United actually gets another patent issued by the Patent and Trademark Office, and that patent relates to the delivery method. And so United then goes back, and they amend their complaint against liquidity them, And they say, actually, you infringe not just two, but three patents. You infringe these two manufacturing patents and there's one delivery-related patent.

And that then, you know, led to all sorts of litigation machinations where liquidity then says, okay, you just sued us in federal district court for patent infringement on these three patents. But there's a vehicle to challenge these patents. patents outside of this district court process. And that process is called an interpartist review, and that happens at the patent and trade office. It's where anyone, not just somebody who is an alleged infringer, anyone can go to the patent and trade office and say, hey, you guys shouldn't have actually issued these patents or this patent. It's not valid because of one of two potential grounds, either 102 grounds or one of three grounds, 102 is novelty, one of three is

not obvious. So they're saying, hey, you patent and trademark office, you shouldn't have issued this because somebody either did it before or this patent was really obvious in light of these other things that people had done before. So we ended up in a situation where we had essentially parallel litigation. You've got the federal district court litigation that you know, that you United has initiated. And then you've got liquidity going to the USPTO, the PTAB, the patent trial and appeals board, saying, hey, can you guys invalidate these patents? Now, liquidity is marginally successful, or I should say they're pretty successful on that front. They end up, the patent trial and appeal board initiates an IPR.

on one of the manufacturing-related patents, and they decline to initiate an IPR on the other. Those manufacturing-related patents, for reasons that we can talk about in a minute, if you'd like to get into it, end up being dropped from the district court lawsuit for a variety of reasons, one of which is that one of those patents,

gets mostly invalidated at the PTAB, and the other one gets an unfavorable claim construction at a Markman hearing in the federal district court litigation. So those two manufacturing-related patents end up dropping out of the federal district court suit, and what we're left with is the last patent to be included in that complaint, the delivery-related patent, is still, you know, an ongoing issue in federal court. And then we also have an IPR initiated on that same patent at the PTAB, which ultimately resulted in an invalidation. So I'm happy to dive. I know there was a lot. I'm happy to dive into any of those elements. It's certainly, you know, procedurally a lot to kind of digest. It was a lot. So let me just go through some basics here to confirm,

especially for listeners, you know, this is a generalist podcast, so listeners might not have as much patent review. But a lot of people are going to hear patent, and they're going to think, oh, you know, the company Merck has patented Viagra, the actual molecule. Like this is pretty simple. Do they own the molecule or not? That's not what's in dispute here. What United has is they've got other things around this drug, the method of delivery, the manufacturing, everything. So they're not arguing, oh, we have the exclusive rights to this molecule. They're arguing Liquidia, you're using the molecule in a way that we have patented or you're manufacturing the molecule in a way that we have patented. So because of that, you can't produce, you know, we're suing you in court to say you can't go and do this until our patents expire.

Is that kind of the right way to talk about it? Yeah, it is. And so, you know, a couple of things. If you look at the filings, you'll see for this, this patent that still is at issue. It's the 793 patent. There's the last few digits of the patent number. For the 793 patent, it relates to the delivery. So you see that United is not actually alleging direct infringement.

They're alleging induced infringement. The reason for that induced infringement term is because the infringing activity is you using it as an inhaler. And so Liquidia cannot be a direct infringement. because it's actually the patient that is ultimately doing the infringing activity, which is why we see this induced infringement language in the litigation. Yep, perfect. And obviously, UTHR can't go to every patient and see them and say, you're using the inhaler.

Obviously, that makes sense. So 793 patent, and we can come back and talk to manufacturing patents later if we want to, but at this point, the 793 patent, this is kind of, and you, You can yes or no this, sell me if I'm wrong. 793 patent is the one issue at dispute here, really, that's keeping Liquidia from coming on the market or not being on the market. Is that about right? Yeah, that's correct. So another kind of stage setting element to all of this is as soon as the lawsuit was filed, it triggered a 30-month regulatory stay.

So essentially the FDA says, hey, liquidity, you guys can't come onto the market. you can't commercialize until all of this stuff gets resolved. And so that stay is still ongoing. Liquidia is not able to commercialize this drug until we get a resolution in this world of litigation. And again, the 793 patent, the delivery-related patent, is the one real outstanding issue. So let's go. So what happens here is the 793, at this point, we have two kind of parallel tracks. I guess they're not working. It's happening at the same time, even though they're not

technically related. On the one hand, UTHR is suing Liquidia saying, you violate the 7-9-3 patent. And on the other hand, liquidity has gone to the patent board and said, we don't think the 793 patent should exist. And I'll just provide what happens. And then you can provide the story because I think what happens in the story, it's kind of a unicorn case. Like as you said, when you and I talked offline about this for the first time, you're like, I haven't seen judge language like this and every you i'll let you explain that but i think a lot of sell side a lot of analysts have really gotten what happens here wrong because it's a super unique case so what happens is i think in early september the judge comes out and says i am up basically and you can give all the details

here i'm upholding the 793 patent i am ruling that uh you know ut hr wins on this basically liquidity can't come they they will violate it on the other side the ptab board basically around the same time, I think it was in July, says we are invalidating the 793 patent for reasons that I will let you discuss. So now you've got two, again, where the interesting the conflict is, the judge has said the patent is upheld. PTAB has said we are invalidating this patent. There's going to be a lot of appeals. There's a lot of process here. And we'll go into the timeline and everything. But I just want to set that stage and turn over to you and say, like, how should people be thinking about these two conflicting rulings? Because I think that's really where the devil and hopefully the

Alpha exists. Yeah. You know, we could talk about admin law and what it means to, you know, what kind of agency authority the USPTO has for hours and there are classes taught on this kind of tension that happens, not just with the PTAB, but with other, you know, agencies. It's really important to note that the market from what I've seen, certainly there, you know, there's an analyst report out there that I think was issued last week that just has it flat wrong where they said, oh, the district court litigation overrides the PTAB. That is an incorrect statement.

You essentially have a level of parity between the district court litigation ruling and the USPTO until the federal circuit makes their decision on appeal. So what is likely to happen is the PTAB ruling is going to hit the Federal Circuit. Federal Circuit will make their ruling. For reasons that, again, we can talk about in just a second, I expect that they are going to uphold the invalidation of the 793. In other words, liquidity is going to win in my mind. And once the Federal Circuit says, yep, PTAB, you got it right, good to go.

then that ruling becomes binding on the district court. So we have this situation right now where the district court is saying, hey, Liquidia, you didn't prove that it is not invalid. And we find that you're probably going to induce infringement when patients take this medication. And the PTAB has said, actually, we think it isn't valid. And if it isn't valid, then liquidity can't infringe because you can't. can't infringe an invalid patent. Perfect. So just to, that was great. And we can talk about all the complexities behind it,

but just to clarify, a lot of people read the judge's ruling. And maybe it's because the judge's ruling comes out. Second, maybe it's because, you know, you and I did the Twitter case and we know the power of judges here, all this sort of stuff. But a lot of people read the judges ruling in August that says, hey, this patent is valid. Liquidia would infringe, induced infringement if, uh, if they launched, right? They read that and they, say, oh, UTHR wins. As you said, there's the cell side report that says the judge's ruling oversees the patent board. And what you are saying is, no, that is wrong. If you think about it logically, if PTAB invalidates the patent, there is no infringement here, right? Because there's no

patent to infringe. Am I kind of summarizing that correctly? Yeah, you know, I think what people might be latching on to is the fact that because the the federal circuit has not weighed in yet. It still looks like a united win here. It looks like UTHR, you know, won at the district court, and therefore they've won because liquidity is still not commercializing. You know, that is the reason liquidity is not commercializing is because that stay is going to last until the federal circuit actually,

you know, provides an opinion that weighs in on all of this. But it doesn't mean, it's still inaccurate to, say that the federal circuit opinion overrides. That is an incorrect statement. And again, something that I think the market has vastly wrong. So just a very simplified version of this is at this point, PTAB has ruled the 793 patent invalid. Obviously, there's appeals processes. There's steps to play out. And we'll talk about timeline and everything. But basically, in your eyes, once the 793 patent, once all the appeals play out, and hopefully it is upheld in Liquidia's favor that this is not a valid patent. Liquidia will be able to come onto the market.

Yeah, if all of that rings true, then yeah, Liquidia will be commercializing shortly thereafter. And I want to talk about why the, I want to talk about why the 793 and patent's invalid, what this 793 patent we keep alluding to is. But before we do that, I want to, there was one interesting thing that you and I first, when we first started talking about this a while ago, You said to me that really got me personally super interested. There were other things, but this is what got me. And that is the judge's ruling on the 793 patent, why it's valid and everything. He's got this really interesting language in it, right? Where he says, hey, you know, I'm ruling August 31st on July 19th, so a month and a half before. I am aware that the PTAB invalidated this patent. Despite that I am upholdy, I am saying that Liquidia would violate this patent. I can't do anything. about that. And I read that as a non-lawyer. I'm probably butchering the language. I read that as a non-lawyer and was like, oh, okay, that makes sense. And you, again, this is the thing that got me super interested. You said, oh, no, I could write like a whole semester long case in law school

talking about what's going on, all the things the judge is signaling. Like, that should any lawyer their hair would just like instantly stand up on fire reading this. The judge is signaling and really doing something here. So I'm going to, again, stop rambling and turn it over to you to talk about what the judge was kind of signaling and saying this August 31st decision. Yeah, well, first of all, I don't know if anything I could say as a lawyer is ever going to, you know, instigate hair on fire. I think that's, uh, you know, and this isn't legal advice. I mean, you're, you're not giving legal advice out here. We're just kind of off. I'm, uh, you know, the law can only be so dramatic, right? I think, uh, we saw the extreme

version of that with Twitter. Um, so yeah, so Judge Andrews at the Delaware district court issues his opinion and he says more or less, hey, PTAB, you're not the boss of me. And I'm not going to stay the litigation and enforcement of my opinion based on liquidity. You know, liquidity says, hey, we've got this ruling at the PTAB. Judge Andrews, please stay this. Like put a pause on this until we resolve this with the PTAB and the federal circuit. And Judge Andrews, he says no. Now, his ruling on that is sort of simple. He says, you know, you did this too late. That's really his primary reason.

He says, this came too late. Normally, you know, if you file for IPRs at the PTAB, a lot of times people will immediately try to stay the district court litigation. And judges will typically grant that stay because it's just, they recognize it's expensive for the parties to litigate on two fronts. and judges don't really want to weigh in on things that are ultimately going to be inconsequential. So they know that if a patent is invalidated at the PTAB and held up on appeal, that their whole case becomes moot. And so they just say, you know, hey, I'll stay the litigation.

But Judge Andrews says, you guys moved for this after trial already happened. So, you know, it's too late, too bad. now there's there's another added layer to this because one of the other factors of whether or not a judge will stay litigation is whether or not the the pending issue that they're viewing you know externally whether that will make their case simpler and and for judge andrews the answer to that question is is no because the p tab is ruling on evidence that wasn't critical to the district court litigation. And we can talk about this. I mean, this is where it really starts to get interesting because the PTAB invalidated the patent, the 793 patent based on two key references. Now, I said earlier, you know, the PTAB can invalidate on novelty grounds or

obviousness grounds saying that, hey, somebody did this before or somebody did something really similar and when you combine these things, you know, it was really obvious. What's really interesting here is that the two references that were used at the PTAB and were not used in the district court litigation were actually references that were authored by the inventor of the patent. So what the PTAB is saying is, hey, you, the author of the patent, this guy Voswinkle, you published this, you made this known to the world too soon. You published it and then you applied for a patent too late. Too much time had passed.

In the U.S., you get a one-year grace period as an adventure. You can disclose something to the public, and that tolls a one-year period where then you can go to the USPTO and file for a patent. And the PTAB is saying, hey, Voswinkle, you published this, and then you waited more than a year. And it looks like Liquidia has shown that these references are one-to-one matches. You disclosed exactly this invention that is the foundation of the 793 patent more than a year before you filed for the patent. So you, Voswinkle, have invalidated your own patent by way of your own disclosures. And that didn't make its way into the district court ruling. And so Judge Andrews is saying, okay, well, this doesn't simplify my case.

A ruling on those references doesn't simplify my case at all because those, that was not key evidence in my case. And so I'm just going to keep trucking and we'll see what the federal circuit has to say about the PTAB, but we're just going to keep our cases going. If I, so a very, another simple way of looking at this, the judge cannot go like the patent has been issued that what uh what liquidity is kind of saying is the patent shouldn't have been issued because this knowledge was common knowledge as you said the inventor 18 months two years before he filed for the patent he had made this common knowledge

he no longer has the right to patent it the judge is saying i can't do anything about that that's at the patent board level i can only rule on the case in front of me on the case in front of me the patent would stand, but if the PTAB rules the patent is invalid, well, then you can forget about this because the patent wasn't valid. I'm ruling on something that wasn't there. Is that kind of the right way to think about it? Yeah, yeah, that's a good summary. Great. So at this point, we've got on one side, we've got the judge who has ruled, hey, 793 valid patent liquidity, you can't release. We've got the patent board who has ruled, oh, actually this is an invalid patent. It shouldn't be an issued because of these things. I guess maybe we should talk about a

little bit more about Laquidia's case for why, as you said, the author had made this public knowledge why this patent shouldn't have been issued, why it's invalid. Do you think we should talk more about that at this point? Yeah, I think it's worth touching on for a bit. So these two references that Laquidia has found are they call them Voswinkle. Some people call it Jessic, like J-E-S-C and Voswinkle, Jaha, J-A-A-H-A. They are basically two references that are abstracts that were published in journals and were associated with related disclosures made at conferences. So Liquitya is saying, hey, Voswinkle, you went to these conferences,

you talked about your invention, you had some written abstract where you described it, that abstract was circulated and not only was it circulated, but it was actually filed away in a variety of different libraries. And that's really the important point, which we can get into. They say it was filed in all of these libraries. And so, you know, this was a public disclosure. You published these references for the world to see thereby. you know precluding you from from pursuing patent protection so and just to simplify so you know like

every year in new orleans there's the the american heart association or whatever gets all the top heart doctors together and they do a big so basically liquidity saying hey you know you got this great pulmonologist or disease research or whatever he went at in 2004 he did this big presentation talking about how to disperse the drug or deliver this drug, right? So he did this big presentation. And then in 2006, he filed a patent. And we are saying because he did this big presentation, the patent is not valid. And then we'll talk about how it's in libraries and everything as well. And basically what UTHR is rebutting is they're saying, no, this conference either wasn't big enough or wasn't well distributed enough. Like, I don't

think they're arguing he didn't do this. They're arguing it wasn't well distributed enough that you know, it became public knowledge. Am I kind of summarizing? the two sides right there yeah what's really interesting you know united is saying so so liquidity's primary arguments this was available in uh written you know publications that were that were cataloged in libraries their secondary arguments are uh even if it wasn't in this library uh you disclosed it at a conference and presumably you handed out paper copies and did all sorts of other things their third and final argument is even if those other two fail you we see from these other references we call them research aids that they cite to this these abstracts which means

that they must have been available because somebody else found them yeah now we can talk about why the secondary arguments and tertiary arguments are not maybe as favorable as the primary argument. I think the third argument is the weakest. I, you know, I wouldn't say this is like, you know, dunking on liquidity as counsel coolly because I think they're, they're right to put all of the arguments out there. But like, I think it is a weak argument. I think we can kind of dismiss that because the research aids were actually from after the critical date that is an issue. So, you know, basically the research aids don't show that these abstracts, these boswinkle abstracts were truly available before the critical date.

And so basically, you know, if the critical date is March 15th, the researched AIDS were released March 30th. So there is like the possibility, even though it's crazy to think a scientific paper could be developed in two weeks, there is the possibility that the guy saw it, you know, March 20th and in 10 days turned around a giant paper is kind of the issue with those. Yeah, you know, I think like logically it makes sense that these research aids show it was publicly available. Legally speaking, you know, they could have found this because, like you say, if they, you know, if it was March 30th, it could have been published on March 29th, even though the conference happened a year before. It could have been finally published on March 29th. And the critical

date was March 15th and it's too late and so no, it wasn't published. Published March 29th and they pulled the undergrad. All right, let's get a big cup of coffee and let's get our paper out before. Yeah, they're like, we talked about this a year ago, but we're just going to get around to publishing it now. And, you know, this other guy's going to write on it in 24 hours. Like it just, you know, logically it doesn't make sense. But legally speaking, I think it's a weak argument. Yep. So that's the third argument.

So let's dismiss that. The second argument is, hey, nobody's disputing that he presented this at a conference. Even if it wasn't cited in the libraries. And I think we're going to go to the first argument. I think it's so clear what's cited in the libraries and everything. But even if it wasn't, let's put that aside. The secondary argument is he presented at this conference. that's good enough. What do you think on that argument? Yeah, you know, we have a case that is like the seminal

case on this matter. Inmerie Klopfenstein is this case where the federal circuit was grappling with this issue of, you know, what does it mean to be a public disclosure to be published if something is presented at a conference? And what they say is, you know, if you just speak about something at a conference, we're not going to call that a publishing issue. But if you, you speak at a conference and everyone there is, you know, an expert in your field. So they're going to digest this. They're going to, they're going to know what you're talking about. They're going to go back to, you know, whatever their research labs and tell everyone else. And if you hand out abstracts and, you know, you're giving materials away to people, then we're probably

going to consider this a published reference. And so, you know, here we don't really have all the evidence. It looks like it was probably, you know, disseminated in some form. Certainly it was early 2000, so it's unlikely that people were, you know, accessing this online at the conference, you know, yeah, we had the internet, but like, were people really, you know, using their laptops at conferences or were we still in the practice of disseminating papers? You know, I think it's a close call, but I think you could argue that, you know, that liquidity should win on that.

Again, to your point, I think that the real critical point here is that Liquidia, in my mind, is going to win on their primary argument, which is, hey, we actually have the physical paper, and we found it in these libraries. And these aren't Podong libraries. This is, you know, the British life, the Library of Congress, Stanford, University of Washington. And all of these libraries had appropriate cataloging measures, which means that if you, an expert in this field, a person of ordinary skill in the art, wanted to go find, information about whether or not tropostinil could be inhaled as a dry powder, you could go to these libraries and you could, you know, do some searching. And via very standard searching methods,

you would actually find these references. And so, you know, that's the argument that I think is, you know, is most profound, is most going to resonate with the PTAB. And, you know, certainly the PTAB ruled in favor of liquidity. But in their ruling, they just said, United Therapeutics challenges Liquidia and says that this primary argument isn't good enough, but Liquidia has these other two arguments. And what they didn't say is the primary argument is sufficient. Liquidia wins on argument number one. And so we're in this situation where now the precedential opinion panel at the PTAB, which is a separate little group that sort of like is an interstitial point between the PTAB and a federal circuit appeal for some cases. They've said,

hey, look, PTAB, you need to go back and reissue this opinion. You need to do a rehearing. You need to figure this out because you didn't adequately rule that this was in fact available. You just said liquidity makes three arguments. And that's not a ruling. You know, anybody can tell that they made three. You need to say which one is sufficient or insufficient. And so that's where we are now where we're sort of in limbo. You know, the PTAB is as ruled, 793 is invalid, but they did it in sort of a sloppy way. And now you've got this appeal that's like ready to go at the federal circuit, but the PTAB now needs to reissue an opinion and sort of clarify what they've done. So you jumped a little bit ahead of me, but I like it. So let's just go back to

the original argument and then we'll go to the precedential opinion argument. So just the 793 argument. I just want to drill down for, or sorry, the primary argument for why 793 isn't right. I just want to drill down so people know. So liquidity's argument is, hey, and they've got there's a librarian expert report that we'll talk about in a second, but they've got a librarian and a librarian attested this. She says, hey, look, you know, Stanford library, these libraries, I never thought about it, but the cataloging is so detailed and so specific. She's like, look, I can go back to Stanford Library and I can search as of, you know, what was in their library on November 15th, 2004, which would have been well before the

dates we're talking about, I can search. And I can find references to them having this specific paper, this specific presentation that he gave in their library. And she does a bunch of other stuff. And they've got it, as you said, one of the British National Libraries has it. But she says five different really prestigious libraries. I can go show that they had this paper in their library. And look, if you're a researcher, especially pre-enter, that all you did all day was probably go to a library and look up cardio vet i'm studying this drug let me look up cardiovascular disease with this drug and she says a person of ordinary skill would have known to do this it was in the biggest libraries and the biggest megalical libraries in

the country i can prove this they were available that's going to invalidate the patent is that kind of the right argument on liquidity aside yeah absolutely and and and she says you know this this methodology of cataloging this mark methodology ma rk or m rc that's like a universal standard. Like this is not, you know, you go to these prestigious libraries and it's not like they're, you know, the library is using some ethereal catalog. She's saying, this is standard. You know, if you go to any library, you're going to see that they're using this catalog.

And what is UTHR's rebuttal to this? I mean, you've got an expert librarian who's coming out and saying, look, I can show you in in late 2004, five different libraries had copies of this abstract, had copies of this paper. What does UCHR's rebuttal to that? I mean, they essentially just say that, you know, a person of a ordinary skill wouldn't have been able to find it. That they say that these cataloging measures were insufficient. And what's really important is that, you know, their expert, the person who's saying,

hey, you couldn't have found this, is not really a library scientist. Laquidia's expert is a librarian. The expert is deeply familiar with the cataloging methodologies and how you would go about finding this stuff. And so you see in Liquidia's experts reply brief, she sort of calls out the United expert and says, hey, you were like a, I think like a math teacher, and you had all, you know, you did all these other things, but you weren't a librarian. And, and so your opinion is, is kind of insignificant here. You know, you're trying to tell me that these cataloging methods are, are, you know, would be impossible to, you know, to use to, to find these, these references. And I'm telling you, I've done this my whole career. And, and, and it's totally

standard. I'm looking, I'm looking at the, uh, liquidity as experts brief. And I'm reading the essence. And I just love it. It's so funny. And you can talk maybe as a former practicing lawyer, you can talk about how these things get drafted and what you kind of read into it. But it's so funny because the expert says, look, Wyman, the UCHR's expert, she's, she's got a bachelor's in St. John's in liberal arts. She's got two years worth of post grads in mathematics at UC Berkeley. Like obviously this is a skilled person, right? But then she comes out and she says, but she is not a trained librarian and it just cracked me up when I read it but she does she says and that is in quotes not a trained librarian but then she says like look train librarians know how to find these things they know

how to catalog and she just it is just such a constant dunking on UCHR's expert you're not a librarian the reason you can't find this is because to your terms or to the legal terms you're not a person of ordinary skill in this yes you are a very skilled person but you're not skilled in librarians and going through these databases any skilled librarian who's got any familiarity with these would be able to figure it out and I will just pause there and say you can disagree with anything I said or you can kind of talk about the the lawyer things behind how and what gets said in this thing no I think that's that's a great summary and you know when it comes down to it United's expert basically says I'm an academic and so I'm really familiar with

finding stuff but what liquidity is expert is saying well you know you're like a user of the process I'm like the architect of it. process. I'm like the person who like is in the like plumbing of of this process. And so, you know, being a user, you know, just because you drive a car a lot does not mean you're a mechanic, right? And so that's kind of the tension that we're pulling. If anybody wants to think back to their, you know, their days in grammar school, going, walking into a library, you're a user of a library, you might not have been able to find stuff, but you go to the library and you say, hey, I'm looking for this book. And she knows exactly where it is. Because, you know,

she knows how to do the search system in a similar way if you were a drug researcher maybe you wouldn't know how to find this on your own but you're you're used to working with librarians saying hey I'm looking for any new materials in the past three months on pulmonary hypertension and the librarian would have said oh yeah let me show you how to find that and uh again tell me if I'm wrong do you want to talk about uh also how the kind of the lawyer the lawyer game theory of how this gets in and what's it kind of signaling yeah I mean The reality is expert reports, the sort of dirty little secret of these types of litigation matters, expert reports are usually drafted by the lawyers. Now, they are reviewed extensively by the experts, and the experts sign off, and the experts need to make sure nothing in that is true, because they would be perjuring themselves if they, you know, agreed to something that was not true.

but you know these are primarily drafted by the lawyers and so what you really have here is coolly which is the law firm that is representing quidia you've coolly kind of calling out united saying hey you guys you pick the wrong person this is like the best person you could come up with for this like look at our person our person's great so it's not necessarily that liquidity is expert is independently saying you know hey I'm better than you guys it's sort of like liquidity saying uh you know you guys united you you you didn't pick the right person and we did and that's the fun dunking but there's also a little bit of subtext of hey maybe you couldn't find the right person who would agree with who would disagree with our argument right like

any train librarian would have known this so you guys couldn't go get a train librarian to say i couldn't find that you had to find a user who said oh i couldn't find that i don't know if i'm reading too much in subtext but that's another possible view they're signaling to the judge yeah you know it's it's totally valid and and i think it is worth some weight um again you know that being a user of these systems certainly is is not totally insignificant but uh again you you want the person who's familiar with the plumbing and uh if if you've ever done this type of research and i certainly have I don't know if you have, but having an experienced librarian help you out is fantastic. It is a tremendous skill to be able to find information that is recorded in hard copies.

So I think we've talked about how the librarian, and people can go read the exhibit, I mean, she just screen after screen of, hey, here's a copy of the circular in, you know, the British library or in the library of Iowa or whatever it is, just copy after copy of, paste saying that or attestations from library and saying yes our records say we had this and that so that's what the good idea let's jump to the next thing that you kind of started you preempted me on but the the precedent board if i'm remembering correctly they say they read the ruling and they send it back to the p tab and says hey you never explicit you said three ruling you never explicitly said which ones are valid which ones are invalid so can you just talk a little bit more

about what's going on there because i do know a lot of people saw precedent board sends it back to PTAB and a lot of liquidity shareholders kind of shook in their pants and say, uh-oh, you know, what was wrong with this ruling? I thought the ruling was kind of up the middle. What am I missing here? Yeah, so the precedential opinion panel is sort of an intermediate intermediate appellate entity where, you know, if the PTAB makes a ruling and there's a novel issue at stake, a party can basically ask this this pop, POP presidential opinion panel. They can ask the pop to to rule on that and essentially, you know, clarify for the federal circuit because, you know, the federal circuit appellate process is long and it's intricate.

And so, you know, if there's a new issue, you want sort of a beefed up record. And the presidential opinion panel is asked by United Therapeutics. United says, hey, you know, Laquitian mentioned this whole research aid argument and backdating, bootstrapping this date that, like, you know, precedes the critical date. Can you guys rule on this? And the presidential opinion panel says, we find that the PTAB, the ALJs, the administrative law judges, which are not really judges, we can get into that, the three judges that issued their opinion on this at the PT, tab, they, they didn't show their work. They didn't, they didn't say, you know, why any of these

arguments was or was not sufficient. And so we're not going to deem this a precedential case. We're not going to like make a ruling on this, but we're going to send it back to you guys. You need to clarify this because it was sort of sloppily done. So it is almost as simple as the PTAB's ruling said the 793 patent is invalid. It is almost as simple as the PTAB going back and saying the 793 patent is invalid because we agree with Liquidia's primary argument that these were available in libraries. And then they could also say, we disagree with liquidity as arguments. We don't think that the presentation at the conference was enough.

And we don't think that the, as we said, the other things referencing this was enough. So, you know, liquidity wins on point one, lose on point two, lose on point three. But liquidity wins on point one. So the thing's invalid. and now the precedent the precedential ruling can say okay we agree with that that's enough and now we can get in the future say all right presenting that conferences not good enough getting is that kind of what you're saying yeah liquidity only needs to win on one of these points you know any one of them would be sufficient to say yes this was this was published so so yeah ptap the aljs need to go back

they need to show their work and once we have that we can then move forward with the federal circuit appeal and and you know hopefully for liquidity that would mean affirming the the ruling which would then become binding on the federal district court now we can talk about sorry no no that's great that that was exactly the next question so at this point hopefully we've established why we think and why we think the 793 patent isn't valid why we think the you know we thought it was a good argument why the patent board probably thought it was a good argument we've probably said that let's talk timeline right so the next thing that happen. There's a lot of appeals that are happening here. The lawyers on both sides are probably

going to be pretty happy. But let's talk the timeline for the re-ruling at PTAB, the presidential appeal board, and then go into the federal courts and kind of how this all plays out. Yeah, you know, the timeline is probably the area that I have the least certainty. So I just want to, you know, I've gotten a lot of questions around this from a lot of people in Twitter DMs and through substack. And the reason I have uncertainty. around this is a few things. One, timelines have really changed in the last couple of years because of COVID. There was a backlog of cases and, you know, they had to kind of wade through all of these, you know, these different cases which had kind of piled up. We've got the holidays

now and that is sort of going to, you know, delay things a little bit. Good luck getting a federal judge to start a huge new trial between December 25th and January 1st. Good luck. not a federal judge at this point, you know, the, the, uh, their government employees based with ALJ is, right? I mean, so these are, these are people who, you know, were maybe academics or practitioners and who kind of want like a bit of a cushy government job lifestyle. Uh, so, so they're typically not, you know, applying urgency to these things. So, uh, you know, the holidays actually, you know, it's a pretty significant factor that can delay by, you know, a month. You know, there are other sort of convoluting factors. I would have expected, I mean,

the Rehearing, United Astro Rehearing back in August, the presidential opinion panel said, you know, said their piece at the end of October. I would have expected, typically, that we would have had the ALJs reissue the opinion within a month. And it didn't happen. So I was wrong. in sort of my assumed timeline. Now, you know, once we get that opinion, which at this point could be mid-January, we're going to have a few months of briefing, you know, federal circuit appeals, and then there's going to be oral arguments. The decision itself usually happens pretty quickly after all that happens.

You know, I think from oral argument to decision for non-precedential cases, is something like 40 or 42 days. So, you know, that should hopefully happen pretty quickly. I think, you know, if you look at the SEC filings for liquidity them, they say if everything goes right with PTAB and Federal Circuit, we expect to commercialize mid-2020. And I think that's a reasonable, comfortable time. I think they've given themselves a little bit of a buffer.

And so, you know, I'm increasingly hesitant to apply strict timelines and expectations because of all these convoluting factors and just say, you know, I think liquidity, you know, they've been advised by counsel. Cooley is very competent counsel. You know, they know exactly how this stuff plays out. They do the whole time. And I think commercialization in mid-20204 is a pretty comfortable assumption should things go their way with the PTAB and the federal circuit. So I want to talk about the odds at PTAB. But before I do that, I just want to quickly mention, you said mid-24 as commercialization date. And I know some people who agree with you and they think, oh, liquidity has given

themselves a little buffer. If things go right and a little bit on the speedy side, it could be end of 23. It could be early 24. But there is one thing that I just want to address. And you've been the first person to call it out. The 793 patent expires in 2007, right? So if liquidity comes online mid-24 like liquidity can come online in 2007 when the patent expires without issue at this point if liquidity comes online mid-24 versus early 24 versus late 23 every month matters to you CHR right this is as I said at the beginning this is a billion dollar run rate drug with incredibly high gross margins if you get an extra month of exclusivity by dragging this out one way or another that's an extra $100 million in revenue-ish.

Like, that matters. So I just want people to keep in their mind. United, not only are they doing everything, obviously, to try to win, but they're going to use every trick they have to try to just delay, because a couple extra, even million of lawyers' fees is worth it if you can get an extra four days of exclusivity here. You can add anything there, or we can go to the odds if you want. Yeah, I think, you know, something else we can talk. about, if we have time, United has also filed a trade secret misappropriation action in

North Carolina, alleging that a former Liquity employee, Robert Ruscigno, basically took trade secrets from United and used those to help develop the Utrepia-in-Hale-Troprosynel program at Liquidia. I've had a lot of questions about that. think that is another delay tactic for exactly the reasons that you mentioned. In addition to the patent litigation, they are trying to pursue other avenues to prevent liquidity from getting on the market because every day is a couple million bucks. That's great. Let's look. I know you've done great work. You've given both the base rates for kind of the success at PTAB and everything. So why don't we just go through the base rates and then we can talk about if we think liquidity

based on everything we've talked about is better or worse. It has better or worse odds than kind of the base rates here. Yeah, you know, the federal circuit, despite the fact that they have patent expertise, they have exclusive jurisdiction over patent appeals. They really don't like to overturn the PTAB. They sort of say, hey, that's your domain. If you're telling us that a patent is now invalid and you shouldn't have issued this patent, we're going to believe you.

And so, you know, a lot of people get upset by that. They call this new IPR process at the PTAP. They say these ALJs are the like the patent executioners. They're like out to kill all patents. You know, even despite that, the federal circuit really doesn't like to overturn the PTAB. And so what we see is like 75, 80% of the time they will more or less affirm the entirety of a PTAB decision. So, you know, just statistically speaking, I think liquidity has got a great chance of the

793 invalidation being held up on appeal. I think we can adjust that number upwards for a lot of the reasons that we were just talking about a minute ago. And I think these are good arguments that liquidity has. were not having to combine references for an obviousness, typically an obviousness. You say, oh, you know, somebody had made like a container and somebody else made a wheel. And so like the wheelbarrow is obvious, you know, be obvious to combine these things. And it requires like a little bit of an inferential leap.

And we don't have that here. We have the inventor himself disclosing his own invention. And so there is no analysis around, you know, whether or not these, these references actually, you know, disclose the invention. They do. They disclose the invention. It's really just a question of, were they available? And again, for the reasons that we just talked about, I think liquidity is in a really good position. Great. So the base rate would be three and four, four and five chance of them winning. And again, as we talked about this scene, if you agree with the last. librarian who says, hey, these were available in very public libraries in 2004, and UCHR's expert is

not a librarian, so, you know, what are you going to do? It seems like Liquidia should win this. Okay, great. I have so many notes, and we are running long, but I do just want to quickly talk about, I think at this point, unless you have anything else on the padden, I think we've really covered well, we've got the timeline, we've got all the arguments there, we've got kind of what's going to how we think this plays out it seems both you and i believe that liquidity has a very very good chance of winning here you know again base rate 75% this seems better than base rate it seems very good that liquidity will win and be you know monetizing by mid 24 do you agree with everything there anything else on the patent no i think that's a fair summary so i do just want to talk about a couple

of things so let's say like neither you and i are health care experts a lot has changed changed. A lot is always changing in health care. You know, a potential competitor drug just last week, a potential competitor drug to Tabasso just last week stumbled. So, you know, that's one guy, but you never know when there's going to be medical breakthroughs, all that. But let's quickly talk about other things at liquidity. I guess the, yeah, the first place, so liquidity wins, you know, and mid-23, end of 23, PTAB rules invalid, upheld at federal court. Liquidia comes out and says, hey, in four months, we're going to be on the market. What do you think the fundamental upside for liquidity is? Well, I think, you know, we kind of have to go back to the patient

pools to analysis, to analyze this and give the right analysis. So we have about 12,000 of these patients in the PAH market. You know, it could be 30,000. We have. We have. probably at least 12,000. We also have this pulmonary hypertension with interstitial lung disease. We have 30,000 patients there, maybe upwards of 60,000. One of the really important things about Liquidia is that they entered into a promotional agreement with Sandoz for another form of troprostin. They are essentially trying to build out a suite of

of not just the inhaler, but the oral and the injections as well. Now, the revenue coming off of this Sandoz partnership is negligible. But the important aspect of it is that they're in the market. They're talking to payers. They're talking to doctors. They've got a foothold now so that when they actually do go to commercialize, they will be commercializing really quickly. And I think they're in a great position with, you know, potential duopoly sort of market to gain upwards of 40% of the market share, you know, within a year or two.

And each one of those patients is worth probably a quarter of a million bucks in revenue per year for liquidity. And so, you know, you can you can do the math. I mean, this is potentially a, you know, a couple billion dollar market cap company by, you know, 2025. One thing that a shareholder told me when I was talking and prepping for this podcast, they said, look, Liquidia, and I was going to mention this next, but we might as mention it. Lequidia CEO is Roger Jeffs. Roger Jeffs was the CMO at UTHR. He's the one who got UTHR, which is the big Taivoso competitor. He's the one who did all the work there, got Taibaso, commercialized, all this sort of stuff. So he saw something with Liquidia's product. And once Liquidia had a history with CRLs and everything, once the FDA approved this product,

he decided I want to be the CEO of this company. That's a signal. But another thing they said is, look, the patient base here, it is very small. There are only about 50 places that are kind of prescribing and treating patients here. And if you look at Liquidia Salesforce, because they've already got their sales force mainly bit out, their sales force is 50 people and they were saying that is not a coincidence like having one salesperson for every one prescriber like that number is not a coincidence that's not these guys are ready to go and the patient base here you know a lot of people hear orphan drugs

and an orphan drug it is something that is literally saving your life and you will see you know if it's something where the patient's been on it for 20 years even if something new and better comes out they might be hesitant to switch over to the new and better drug because they've been living on this drug for 20, this old drug for 20 years. With Devoso, you know, the patients are only on it for about 1.7 years or about two years. So you've kind of got an ideal scenario for orphan drug taking share where the patient base is turning over reasonably quickly. You have a small number of prescribers. So you're going to have kind of a lot of chances to win new market share, I guess to quote. I'll pause there and, you know, anything you want to add or comment on

there. Please feel free. Yeah. I mean, look, it's it's a sad fact that there is that turn, right? Because it's, you know, patients that are recently diagnosed and then, you know, subsequently they pass away. And so, you know, it's a sad fact that there is turnover at all. But there is. And it does create a market opportunity as you're described. I think the other really important point, though, is that there is substantial evidence of difference in efficacy. and that, you know, these are not, you know, the patient response is going to be different between Tyvaso and Eutrepia. And part of that, or I should say a substantial amount of that is due to the manufacturing method that Liquidia is employing. They have a proprietary manufacturing methodology that they call print, which is essentially a way to create a mold for small particles and make sure that this inhaled powder has really uniform, really small particles. And what that ultimately means for patients is that you're likely to see better penetration into

the lungs, that they can ultimately deliver higher dosage. And, you know, you could have other benefits like it reduces cough and reduces, you know, pain in your throat when you inhale of this. And so not only do you have this turnover and sort of the market dynamics that you describe, but you actually have a product that is, you know, has differentiated effects. And I think patients and doctors are dying for choice. You know, I talk to employees of liquidity. I've talked to doctors and, you know, there's just, there's not a lot out there. So the mere fact that there is a differentiated product means that, you know, liquidity isn't a great position to start gaining market show rapidly.

Yep. And just to add on to your point, so, you know, you've got these finer particles. And because of that, you can inhale. And I think liquidity, they did it in the study. They did it up to like five times what Savasso's dosage is. But they said, hey, there was no limit to this. Like we could do more. And that's critical for all sorts of reasons.

You know, basically what happens, I'm not assigned to. but basically what happens with Tyboso, the current UTHR drug, is eventually your symptoms get worse and you can't inhale enough. So you have to go on the IV. If you can inhale 10x the dosage on liquidity, and I just pull the 10x out of nowhere, well, then you can stay on the liquidity product for a lot longer. And, you know, inhaling something versus taking it intravenously is going to be a huge quality of life improvement. If you can help the dosage, but with inhale, maybe you can inhale less than the UTH product. So there's just, there are a lot of reasons that this product could be superior. And I do think that also comes into a common question that people are going to have, hey,

you know, if Liquidia invalidates all of UTHR's patents, why isn't, why aren't we going to see just generics flood this market and pricing, you know, if you're doing 10,000 patients at 100,000 a year, that's one thing. But if you're doing 10,000 patients and there's seven products on the market, pricing is going to come down. So it's going to be great for patients. It's going to be great health care. I'd love that for all drugs, but it's not going to be good for your shareholders. And I think one of the reasons that won't happen is liquidity actually seems to have a superior product. So they've got a superior product, patent protected, unique methods. It's going to kind of give them advantages in that. I'll let you add anything on you want there.

Yeah, I think there, you know, before I talk about the likelihood of other generics, I think it's important to note. I've gotten a lot of questions about, you know, the data saying that liquidity is better is largely, you know, a lot of it is from a utrepea, that's Liquidia's product, utopia to United's nebulizer, that comparison. And so, you know, you have to extrapolate a little bit to kind of do a DPI to DPI comparison. And so that is a valid criticism of the analysis or things that check. You know, you need a gut check on this to say, okay, is the DPI, is the dry powder inhaler really going to be better than Tyvassa? And, you know, you're not going to see,

you're most likely not going to see a DPI to DPI study for a few reasons. One, I think, you know, look, liquidity isn't a great position to gain market share for the reasons that we already talked about, and so I don't think it's super necessary. Two, Tyvaso is, you know, heavily controlled. In order to do the study, liquidity would actually have to get the, the product. And getting the product is not easy. You know, you, you, you, you have to be a patient. And so, you know, it's, it's sort of a valid criticism or valid gut check to say, hey, this isn't an apples to apples comparison. Can you actually say Utrepi is better? But again, for the reasons that

we just talked about, this, this print technology and, you know, a lot of this sort of circumstantial evidence around, you know, patient tolerance, there's a lot, you know, a lot of indication, a lot of reason to believe that it is, in fact, better. Now, to your next point about generics, are generics going to flood the market? There are a number of different avenues for treating pulmonary hypertension, depending on what group you're in. There's five groups. They call them the WHO groups one through five. Not all of them are, not all of the methods out there are suited for pulmonary arterial hypertension and pulmonary hypertension with interstitial lung disease, which is those are the indications that this inhaled traprostenil is being used to treat.

Even if generics, you know, other generic manufacturers wanted to flood the market, liquidity has not just a patent protection on their specific, you know, print technology or their manufacturing methods, they have a lot of trade secret knowledge around how to manufacture their dry powder troprosma. And one of the biggest issues with the dry powder is that it's super hygroscopic. That means it pulls water out of the air and essentially becomes unusable because you don't want to be inhaling water in near ones, right? And that is something that Liquidia has been working on since like 2015. They spent at least five years trying to really address this one issue of how do you create a stable proprosthenal compound that it's not just stable but stable

at room temperature so that it's easy to, you know, to use, transport, to store, etc. That is not a trivial problem to solve. And so, you know, because of this patent overhang, what I highly suspect is the case is that all these other manufacturers are thinking, why am I going to invest a bunch of money in R&D if these United patents might be valid until 2027? Like this is, you know, we don't even, we don't have clarity. We don't know if anyone gets into the market. Even if it's valuable, like it's just not worth our time. And so if liquidity gets the win at the PTAB and the federal circuit, they're in a really good position to have a massive headstone. And, you know, I've talked, Again, I've talked to employees. I've talked to, you know, others in the industry who say,

this is a really significant, this hygroscopicity issue is a really significant issue. And so, you know, I don't think you're going to see a flood of generics because the R&D lift is huge. I completely agree. We are running long and my dog is letting me know it's time for it to go to the restroom. So I'm, we're probably going to have to orbit up here, but I just want to do two quick things. agree with me, just agree with me, and then I want to turn it over to you for final thoughts, Fiatta Vinny, and then we'll wrap it up. Two quick things. Number one, you know, it is very hard to assign like, this is not, oh, this is a cable company.

They're going to do $5 in cash flow next year, put a 10x multiple $50. Like it's very hard, but I do think a very simple way would be to say Taibaso will probably be doing about $1.2 billion in sales by the time liquidity comes online. every 10% of the market that you think liquidity could do would be $120. If you're going to slap $120 in revenue, if you're going to slap a four times multiple on that, that means every 10% of the market they get is worth about $4 per share. If you slap a four times revenue multiple,

which is kind of what you get pictured. Now, obviously, you've got to think, when do generis come, when does pricing, all that sort of stuff. But I think that's a very simple way. you know, I know a lot of people who look at it and say they're going to get way more than 50% in the market, but if you think they get about 50%, then you're talking, hey, this is $20 stock plus whatever cash they have on the balance sheet. You can agree, disagree. I know people who think the technology is going to be worth a lot more in the long run, all that sort

of stuff, but anything you want to add on there? No, I think that's a pretty reasonable kind of base case. You know, look, Liquidia is not talking about pricing. You know, they're just that that information is not publicly available. And so, you know, it's really going to come down to do they have to undercut Tyvoso in any capacity or are the added benefits that we talked about, you know, that are a derivative of the print technology, do those provide enough benefit that they can actually be, you know, on parity with the Taiposa price? Or maybe premium, but I think premium might be hard for drugs.

And then the last thing, a lot of people worry about TASA. runway, you know, until they commercialize, this is going to be a pretty heavily cash burning company. To me, and feel free to tell me if you disagree, they did a raise in April. They've got about $100 million in cash on the balance sheet. They will burn through that reasonably quickly with the legal fees and all the startup fees, but they've got enough to cover at least 23, 24. I think their kind of line is, we've got enough to cover us through getting to commercialization. And once you get to commercialization, look, it's never fun to say they're going to have to raise at some point, but I think they get to commercialization or they get to line of sites

commercialization, the stock is hopefully probably a lot higher when that happens. And then you can kind of address it through a stock raise, partnering with another company. Like they, I think the critical point here on liquidity is they've got enough to see this trial through and have line of sites commercialization. Yeah, I think that's right. And you know, I talk to guys on liquidity team. And I know that they're looking at also non-dilutive ways. to go up funding. So, you know, they are, they haven't committed to anything, but, but they are exploring all of their options. And like you say, even if they do have to raise, if they have that line of sight, you know, I think it bodes well for the stock. Perfect. Well, Lionel, this has been

absolutely fantastic. Again, this is one of the most interesting ones. I've come across in a while. I know you and I, we've been talking about for months. I'm glad we could get this podcast out there. I think it's a real banger. I'll remind everyone, this is lots and lots of risk here. But hopefully, I hope we've done good analysis here. But everybody should think through all those risks very carefully. Remember this is an investing advice. But, Lionel, appreciate you wearing the hat.

I hope you have a great holidays and looking forward to having you on again in the new year. Thank you so much. Always love being on the podcast. Appreciate you having me on for a second time. And I hope you have a great holiday season as well. We'll talk to you, buddy. A quick disclaimer, nothing on this podcast should be considered an investment advice. Guests or the hosts may have positions in any of the stocks mentioned during this podcast.

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