Liquidia Technologies focuses on the small. Its method of producing nano-scale particles improves how a drug reaches its target in the body. Now the clinical-stage biopharmaceutical company is aiming for something big: an IPO to finance tests of a pair of drugs that use this drug delivery technology.
Research Triangle Park, NC-based Liquidia filed the IPO paperwork late Thursday, setting a preliminary $57.5 million target. The company has applied for a listing on the Nasdaq exchange under the stock symbol “LQDA.”
The key to Liquidia’s approach is its manufacturing process, which enables the company to control physical parameters of a nanoparticle, such as its size and shape. This proprietary technology is called Particle Replication In Non-wetting Templates, or “PRINT.” Nanoparticles are formed in molds, which the company says allows it to produce drug particles that are uniform. These molds are part of a continuous system, which makes the process scalable and cost-effective. The company adds that its process complies with the current good manufacturing practices that the FDA requires for drug production.
Liquidia, which was founded in 2008 based on technology licensed from the University of North Carolina at Chapel Hill, started out by partnering with other companies and helping them develop their drugs. The company is now trying to bring its own drugs to the market. But rather than discovering and developing new molecules, Liquidia is trying to make better versions of already approved drugs. These compounds can go through an FDA regulatory pathway that permits a company to use previous research showing that the earlier drug was safe and effective. If all goes well, it’s a quicker and less expensive path to get the new version of a drug to the market.
The first Liquidia drug candidate is LIQ861, a treatment for pulmonary arterial hypertension (PAH). In PAH, high blood pressure develops in the arteries carrying blood to the lungs, resulting in symptoms such as shortness of breath, chest pain, and fainting. The main treatment for PAH is an old, generic drug called treprostinil, which is available in inhaled, injectable, and pill formulations.
Liquidia is trying to improve on the inhaled form of treprostinal. The company has developed a dry powder version that it says can reach deep into the lungs. The inspiration for this inhaled formulation was naturally occurring pollen, according to the filing. The company says its drug has the potential to increase the number of PAH patients that can be treated with an inhaled form of treprostinil, and also delay the start of infusion treatments. The Phase 3 study testing the Liquidia PAH drug enrolled its first patient in March. Safety data from the study are expected in the first half of 2019.
In developing a new inhaled version of treprostinal, Liquidia is aiming to compete against the leader in PAH drugs, United Therapeutics (NASDAQ: UTHR). The company, whose operations are in Silver Spring, MD, and Research Triangle Park, markets three different versions of treprostinal, including an inhaled version, Tyvaso. PAH drugs are United Therapeutics’ top revenue source, accounting for $670.9 million of the company’s $1.7 billion in 2017 sales. In a move to expand its PAH drug lineup, United Therapeutics in April reached a $141 million deal to acquire SteadyMed, a San Ramon, CA, company that is has developed a product that administers treprostinil via a skin patch for 48 straight hours. SteadyMed aims to make dosing of the drug more convenient for patients and also avoid the pain and skin reactions that can come from the injectable versions. The company expects to file for FDA approval of the product in the fourth quarter of this year.
Liquidia’s pipeline also includes a pain drug candidate. In addition to optimizing drug delivery, the company’s technology can also control the release of an active pharmaceutical ingredient. Its second drug candidate, LIQ865, is an injectable version of bupivacaine, a generic drug used to manage post-surgical pain. The company says its version of bupivacaine was developed to provide pain relief lasting up to five days, which is longer than currently available versions of the drug. Liquidia plans to start Phase 2 tests of LIQ865 in the second half of this year.
The PAH and pain drugs are not Liquidia’s first foray into drug development. PRINT is a platform technology and the company has used that platform to launch other ventures. In 2013, the company formed a subsidiary called Envisia Therapeutics, which used PRINT to develop eye drugs. Aerie Pharmaceuticals (NASDAQ: AERI) acquired most of Envisia’s assets in 2017. In 2014, Liquidia formed yet another company, Lq3, focused on oral health. That effort fizzled and Liquidia ended up shutting down Lq3 less than two years later.
Liquidia has raised $116.9 million from equity financing. It was one of the first biotech investments by the Bill & Melinda Gates Foundation, which pumped $10 million into the startup in 2011. The Gates Foundation owns a 7.5 percent stake in Liquidia, according to the IPO filing. The company’s largest shareholder is New Enterprise Associates, which owns an 18.7 percent stake. Other shareholders include Canaan Partners, Xeraya Capital, and Morningside Venture Investments.
The Liquidia IPO filing comes as revenue from collaborations dwindles. The Gates Foundation investment was followed by a partnership to research vaccines for the developing world. The final piece of the $1 million payment from that collaboration was recognized as revenue last December. The company says in the filing that it is not currently doing any work related to the pact and it does not expect to see additional revenue from the agreement.
For the last two years, most of Liquidia’s revenue has come from its GlaxoSmithKline (NYSE: GSK) partnership on inhaled drugs and vaccines. GSK declined to renew the vaccine part of the deal in 2016. Research on inhaled drugs continues, but has been scaled back and led to the cutting of an undisclosed number of Liquidia jobs, according to the filing. Liquidia reported $7.5 million in 2017 revenue, down 43 percent from the prior year. The company’s 2017 net loss was $29.1 million. As of March 31 of this year, Liquidia’s balance sheet showed $17.5 million in cash.
Anatomy of the lungs and heart image by Flickr user University of Liverpool Faculty of Health & Life Sciences via a Creative Commons license