Liquidia: Is It Worth Getting On Board Early?

Liquidia went for $11 per share at IPO.

Some big players are involved with the company.

Potential will play out with PAH drug.

Liquidia Technologies (LQDA) is a very interesting IPO story in 2018. The pharmaceutical upstart recently completed its IPO, with the stock going public at $11 per share. Over the past couple of weeks, shares have risen some 20% to $13 and change. Playing a stock on IPO can be a dangerous game, but as the dust begins to settle, the true story and true market cap of a company take shape. The question for those that did not get in on the IPO is whether it is still a good stock to buy. The answer to that can be a bit complex, but I recommend investors start by reading an article from fellow Seeking Alpha contributor Bilbao Asset Management titled, “Liquidia IPO: Phase 3 Clinical Stage That Interested The Bill Gates Foundation.” That article gives some great insight into the potential of the company’s pipeline, some key players invested, and a look at the financial picture.

My analysis is going to take a bit of a different track. I first learned of Liquidia some time ago as I was researching potential competitors MannKind (MNKD) and United Therapeutics (UTHR). MannKind is more of a direct competitor because it has a dry powder inhaled drug delivery system of its own, while United Therapeutics is one of the bigger players in the space of treating pulmonary arterial hypertension, also known as PAH.

Liquidia’s front-running drug candidate is a dry powder inhaled version of treprostinil. United Therapeutics utilizes the same drug in various treatments it has on the market. Meanwhile, MannKind is attempting to be a fast follower on a dry powder inhaled treprostinil product and has itself completed phase 1 of clinical trials, and like Liquidia, can proceed directly to phase 3.

It is a bit difficult to separate the MannKind and United Therapeutics dynamic, but I will try to work through this discussion in a way that outlines some of the potential and risk involved. The issue boils down to a statement in the Liquidia prospectus that likely received little attention.

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