Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Sep. 30, 2022 | Nov. 01, 2022 | |
Document and Entity Information | ||
Entity Central Index Key | 0001819576 | |
Entity Registrant Name | LIQUIDIA CORPORATION | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 | |
Document Fiscal Period Focus | Q3 | |
Document Fiscal Year Focus | 2022 | |
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Sep. 30, 2022 | |
Document Transition Report | false | |
Entity File Number | 001-39724 | |
Entity Incorporation, State or Country Code | DE | |
Entity Tax Identification Number | 85-1710962 | |
Entity Address, Address Line One | 419 Davis Drive, Suite 100 | |
Entity Address, City or Town | Morrisville | |
Entity Address, State or Province | NC | |
Entity Address, Postal Zip Code | 27560 | |
City Area Code | 919 | |
Local Phone Number | 328-4400 | |
Title of 12(b) Security | Common stock, $0.001 par value per share | |
Trading Symbol | LQDA | |
Security Exchange Name | NASDAQ | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Entity Small Business | true | |
Entity Emerging Growth Company | true | |
Entity Ex Transition Period | true | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 64,494,951 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) $ in Thousands | Sep. 30, 2022 | Dec. 31, 2021 |
Current assets: | ||
Cash and cash equivalents | $ 98,320 | $ 57,494 |
Accounts receivable, net | 3,136 | 2,990 |
Prepaid expenses and other current assets | 1,602 | 792 |
Total current assets | 103,058 | 61,276 |
Property, plant and equipment, net | 3,943 | 5,017 |
Operating lease right-of-use assets, net | 2,186 | 2,412 |
Indemnification asset, related party | 6,555 | 6,282 |
Contract acquisition costs, net | 8,804 | 10,138 |
Intangible asset, net | 3,812 | 4,390 |
Goodwill | 3,903 | 3,903 |
Other assets | 307 | 311 |
Total assets | 132,568 | 93,729 |
Current liabilities: | ||
Accounts payable | 1,140 | 1,070 |
Accrued expenses and other current liabilities | 5,224 | 5,171 |
Current portion of operating lease liabilities | 865 | 775 |
Current portion of finance lease liabilities | 231 | 311 |
Total current liabilities | 7,460 | 7,327 |
Litigation finance payable | 6,564 | 6,143 |
Long-term operating lease liabilities | 3,572 | 4,232 |
Long-term finance lease liabilities | 197 | 352 |
Long-term debt | 19,741 | 10,410 |
Total liabilities | 37,534 | 28,464 |
Commitments and contingencies | ||
Stockholders' equity: | ||
Preferred stock - 10,000,000 shares authorized, none outstanding | 0 | 0 |
Common stock - $0.001 par value, 80,000,000 shares authorized, 64,460,394 and 52,287,737 shares issued and outstanding as of September 30, 2022 and December 31, 2021, respectively | 64 | 52 |
Additional paid-in capital | 439,033 | 374,794 |
Accumulated deficit | (344,063) | (309,581) |
Total stockholders' equity | 95,034 | 65,265 |
Total liabilities and stockholders' equity | $ 132,568 | $ 93,729 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Parentheticals) - $ / shares | Sep. 30, 2022 | Dec. 31, 2021 |
Condensed Consolidated Balance Sheets | ||
Preferred stock, shares authorized (in shares) | 10,000,000 | 10,000,000 |
Preferred stock, shares outstanding (in shares) | 0 | 0 |
Common stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Common stock, shares authorized (in shares) | 80,000,000 | 80,000,000 |
Common stock, shares issued (in shares) | 64,460,394 | 52,287,737 |
Common stock, shares outstanding (in shares) | 64,460,394 | 52,287,737 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations and Comprehensive Loss - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Condensed Consolidated Statements of Operations and Comprehensive Loss | ||||
Revenue | $ 3,165 | $ 3,179 | $ 10,575 | $ 9,638 |
Costs and expenses: | ||||
Cost of revenue | 740 | 890 | 2,165 | 2,297 |
Research and development | 4,512 | 4,487 | 14,459 | 15,136 |
General and administrative | 6,744 | 4,882 | 26,224 | 14,640 |
Total costs and expenses | 11,996 | 10,259 | 42,848 | 32,073 |
Loss from operations | (8,831) | (7,080) | (32,273) | (22,435) |
Other income (expense): | ||||
Interest income | 359 | 4 | 428 | 30 |
Interest expense | (620) | (205) | (1,640) | (558) |
Loss on extinguishment of debt | (997) | (53) | ||
Total other income (expense), net | (261) | (201) | (2,209) | (581) |
Net loss and comprehensive loss | $ (9,092) | $ (7,281) | $ (34,482) | $ (23,016) |
Net loss per common share, basic (in dollars per share) | $ (0.14) | $ (0.14) | $ (0.58) | $ (0.47) |
Net loss per common share, diluted (in dollars per share) | $ (0.14) | $ (0.14) | $ (0.58) | $ (0.47) |
Weighted average common shares outstanding, basic (in shares) | 64,458,741 | 52,081,497 | 59,745,042 | 48,822,303 |
Weighted average common shares outstanding, diluted (in shares) | 64,458,741 | 52,081,497 | 59,745,042 | 48,822,303 |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Stockholders' Equity - USD ($) $ in Thousands | Common Stock | Additional Paid-in Capital | Accumulated Deficit | Total |
Balance at Dec. 31, 2020 | $ 43 | $ 346,045 | $ (275,002) | $ 71,086 |
Balance (in shares) at Dec. 31, 2020 | 43,336,277 | |||
Issuance of common stock upon exercise of stock options | 0 | |||
Issuance of common stock upon exercise of stock options (in shares) | 281 | |||
Issuance of common stock upon vesting of restricted stock units | 0 | |||
Issuance of common stock upon vesting of restricted stock units (in shares) | 10,366 | |||
Issuance of warrant | 261 | 0 | 261 | |
Stock-based compensation | 745 | 0 | 745 | |
Net loss | (9,183) | (9,183) | ||
Balance at Mar. 31, 2021 | $ 43 | 347,051 | (284,185) | 62,909 |
Balance (in shares) at Mar. 31, 2021 | 43,346,924 | |||
Balance at Dec. 31, 2020 | $ 43 | 346,045 | (275,002) | 71,086 |
Balance (in shares) at Dec. 31, 2020 | 43,336,277 | |||
Net loss | (23,016) | |||
Balance at Sep. 30, 2021 | $ 52 | 370,930 | (298,018) | 72,964 |
Balance (in shares) at Sep. 30, 2021 | 51,976,804 | |||
Balance at Mar. 31, 2021 | $ 43 | 347,051 | (284,185) | 62,909 |
Balance (in shares) at Mar. 31, 2021 | 43,346,924 | |||
Issuance of common stock upon vesting of restricted stock units | 0 | |||
Issuance of common stock upon vesting of restricted stock units (in shares) | 2,088 | |||
Sale of common stock, net | $ 9 | 21,702 | 0 | 21,711 |
Sale of common stock, net (in shares) | 8,626,037 | |||
Stock-based compensation | 953 | 0 | 953 | |
Net loss | (6,552) | (6,552) | ||
Balance at Jun. 30, 2021 | $ 52 | 369,706 | (290,737) | 79,021 |
Balance (in shares) at Jun. 30, 2021 | 51,975,049 | |||
Issuance of common stock upon vesting of restricted stock units | 0 | |||
Issuance of common stock upon vesting of restricted stock units (in shares) | 1,755 | |||
Stock-based compensation | 1,224 | 0 | 1,224 | |
Net loss | (7,281) | (7,281) | ||
Balance at Sep. 30, 2021 | $ 52 | 370,930 | (298,018) | 72,964 |
Balance (in shares) at Sep. 30, 2021 | 51,976,804 | |||
Balance at Dec. 31, 2021 | $ 52 | 374,794 | (309,581) | 65,265 |
Balance (in shares) at Dec. 31, 2021 | 52,287,737 | |||
Issuance of common stock upon exercise of stock options | 593 | 0 | 593 | |
Issuance of common stock upon exercise of stock options (in shares) | 143,048 | |||
Issuance of common stock upon vesting of restricted stock units | 0 | |||
Issuance of common stock upon vesting of restricted stock units (in shares) | 1,690 | |||
Issuance of common stock under employee stock purchase plan | 28 | 0 | 28 | |
Issuance of common stock under employee stock purchase plan (in shares) | 5,017 | |||
Issuance of warrant | 1,317 | 0 | 1,317 | |
Equity consideration for acquisition | $ 1 | (1) | 0 | |
Equity consideration for acquisition (in shares) | 616,666 | |||
Stock-based compensation | 4,129 | 0 | 4,129 | |
Net loss | (15,943) | (15,943) | ||
Balance at Mar. 31, 2022 | $ 53 | 380,860 | (325,524) | 55,389 |
Balance (in shares) at Mar. 31, 2022 | 53,054,158 | |||
Balance at Dec. 31, 2021 | $ 52 | 374,794 | (309,581) | $ 65,265 |
Balance (in shares) at Dec. 31, 2021 | 52,287,737 | |||
Issuance of common stock upon exercise of stock options (in shares) | 193,331 | |||
Net loss | $ (34,482) | |||
Balance at Sep. 30, 2022 | $ 64 | 439,033 | (344,063) | 95,034 |
Balance (in shares) at Sep. 30, 2022 | 64,460,394 | |||
Balance at Mar. 31, 2022 | $ 53 | 380,860 | (325,524) | 55,389 |
Balance (in shares) at Mar. 31, 2022 | 53,054,158 | |||
Issuance of common stock upon exercise of stock options | 1 | 0 | 1 | |
Issuance of common stock upon exercise of stock options (in shares) | 364 | |||
Issuance of common stock upon vesting of restricted stock units | 0 | |||
Issuance of common stock upon vesting of restricted stock units (in shares) | 17,496 | |||
Sale of common stock, net | $ 11 | 54,450 | 0 | 54,461 |
Sale of common stock, net (in shares) | 11,274,510 | |||
Stock-based compensation | 1,703 | 0 | 1,703 | |
Net loss | (9,447) | (9,447) | ||
Balance at Jun. 30, 2022 | $ 64 | 437,014 | (334,971) | 102,107 |
Balance (in shares) at Jun. 30, 2022 | 64,346,528 | |||
Issuance of common stock upon exercise of stock options | 141 | 0 | 141 | |
Issuance of common stock upon exercise of stock options (in shares) | 49,440 | |||
Issuance of common stock upon vesting of restricted stock units | 0 | |||
Issuance of common stock upon vesting of restricted stock units (in shares) | 17,502 | |||
Issuance of common stock under employee stock purchase plan | 230 | 0 | 230 | |
Issuance of common stock under employee stock purchase plan (in shares) | 46,924 | |||
Stock-based compensation | 1,648 | 0 | 1,648 | |
Net loss | (9,092) | (9,092) | ||
Balance at Sep. 30, 2022 | $ 64 | $ 439,033 | $ (344,063) | $ 95,034 |
Balance (in shares) at Sep. 30, 2022 | 64,460,394 |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2022 | Sep. 30, 2021 | |
Operating activities | ||
Net loss | $ (34,482) | $ (23,016) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Stock-based compensation | 7,480 | 2,922 |
Depreciation and amortization | 3,081 | 4,740 |
Non-cash lease expense | 226 | 172 |
Loss on disposal of property and equipment | 1 | 29 |
Loss on extinguishment of debt | 997 | 53 |
Non-cash interest (income) expense | 222 | 155 |
Changes in operating assets and liabilities: | ||
Accounts receivable, net | (146) | (3,050) |
Prepaid expenses and other current assets | (810) | 377 |
Other non-current assets | 4 | 77 |
Accounts payable | (203) | (6,451) |
Accrued expenses and other current liabilities | 215 | (227) |
Refund liability | 0 | (1,769) |
Operating lease liabilities | (570) | (488) |
Net cash used in operating activities | (23,985) | (26,476) |
Investing activities | ||
Purchases of property, plant and equipment | (101) | (87) |
Proceeds from the sale of property, plant and equipment | 5 | 0 |
Net cash used in investing activities | (96) | (87) |
Financing activities | ||
Principal payments on finance leases | (235) | (387) |
Principal payments on long-term debt | (10,500) | (10,353) |
Proceeds from issuance of long-term debt with warrants, net | 19,767 | 10,410 |
Receipts from litigation financing | 421 | 3,920 |
Proceeds from sale of common stock, net of underwriting fees and commissions | 54,461 | 21,710 |
Proceeds from issuance of common stock under stock incentive plans | 993 | 1 |
Net cash provided by financing activities | 64,907 | 25,301 |
Net increase (decrease) in cash and cash equivalents | 40,826 | (1,262) |
Cash and cash equivalents, beginning of period | 57,494 | 65,316 |
Cash and cash equivalents, end of period | 98,320 | 64,054 |
Supplemental disclosure of cash flow information | ||
Cash paid for interest | 1,105 | 309 |
Cash paid for operating lease liabilities | 928 | 901 |
Reduction of lease liability and right-of-use asset from lease modification | 0 | 39 |
Non-cash increase in indemnification asset through accounts payable | $ 273 | $ 4,326 |
Business
Business | 9 Months Ended |
Sep. 30, 2022 | |
Business | |
Business | 1. Business Description of the Business Liquidia Corporation (“Liquidia” or the “Company”) is a biopharmaceutical company focused on the development, manufacture, and commercialization of products that address unmet patient needs, with current focus directed towards the treatment of pulmonary hypertension (PH). Liquidia Corporation operates through its wholly owned operating subsidiaries, Liquidia Technologies, Inc. (“Liquidia Technologies”) and Liquidia PAH, LLC (“Liquidia PAH”), formerly known as RareGen, LLC (“RareGen”). The Company generates revenue primarily pursuant to a promotion agreement between Liquidia PAH and Sandoz Inc. (“Sandoz”), dated as of August 1, 2018, as amended (the “Promotion Agreement”), sharing profit derived from the sale of the first-to-file fully substitutable generic treprostinil injection (“Treprostinil Injection”) in the United States. Liquidia PAH has the exclusive rights to conduct commercial activities to encourage the appropriate use of Treprostinil Injection. The Company employs a targeted sales force calling on physicians and hospital pharmacies involved in the treatment of pulmonary arterial hypertension (PAH) in the United States, as well as key stakeholders involved in the distribution and reimbursement of Treprostinil Injection. Strategically, the Company believes that its commercial presence in the field will enable an efficient base to expand from for the launch of YUTREPIA upon final approval, leveraging existing relationships and further validating its reputation as a company committed to supporting PAH patients. The Company conducts research, development and manufacturing of novel products by applying its proprietary PRINT® technology, a particle engineering platform, to enable precise production of uniform drug particles designed to improve the safety, efficacy and performance of a wide range of therapies. The Company’s lead product candidate, for which it holds worldwide commercial rights, is YUTREPIA for the treatment of PAH. YUTREPIA is an inhaled dry powder formulation of treprostinil designed to improve the therapeutic profile of treprostinil by enhancing deep lung delivery and achieving higher dose levels than current inhaled therapies. The Company’s New Drug Application (NDA) for YUTREPIA was tentatively approved by the FDA in November 2021. Risks and Uncertainties The Company is subject to risks and uncertainties common to companies in the biotechnology industry, including, but not limited to, development by competitors of new technological innovations, dependence on third parties and key personnel, protection of proprietary technology, compliance with government regulations, and the ability to secure additional capital to fund operations. The current global macro-economic environment is volatile, which may result in supply chain constraints and elevated rates of inflation. In addition, the Company operates in a dynamic and highly competitive industry and believes that changes in any of the following areas could have a material adverse effect on the Company’s future financial position, results of operations, or cash flows: the ability to obtain future financing; advances and trends in new technologies and industry standards; results of clinical trials; regulatory approval and market acceptance of the Company’s products; development of sales channels; certain strategic relationships; litigation or claims against the Company related to intellectual property, product, regulatory, or other matters; and the Company’s ability to attract and retain employees necessary to support its growth. Product candidates developed by the Company require approval from the FDA and/or other international regulatory agencies prior to commercial sales. There can be no assurance that the Company's product candidates will receive the necessary approvals. If the Company is denied approval, approval is delayed, or the Company is unable to maintain approval, it could have a material adverse impact on the Company. The Company relies on single source manufacturers and suppliers for the supply of its product candidates. This adds to the manufacturing risks faced by the Company, which could be left without backup facilities in the event of any failure by a supplier. Any disruption from these manufacturers or suppliers could have a negative impact on the Company’s business, financial position and results of operations. Liquidity The Company expects to incur significant expenses and operating losses for the foreseeable future as it seeks regulatory approval and prepares for commercialization of any approved product candidates. These efforts require significant amounts of capital, adequate personnel and infrastructure, and extensive compliance-reporting capabilities. Even if the Company's development efforts are successful, it is uncertain when, if ever, the Company will realize significant revenue from product sales. The Company expects that it will likely require additional capital in advance of a potential commercial launch of YUTREPIA. The Company may also require additional capital to pursue in-licenses or acquisitions of other product candidates. If the Company is unable to obtain funding, the Company could be required to delay, reduce, or eliminate research and development programs, product portfolio expansion, or future commercialization efforts, which could adversely affect its business prospects. In accordance with Accounting Standards Update (“ASU”) 2014-15, Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern (Subtopic 205-40) The Company expects that its cash and cash equivalents will be sufficient to fund its operating expenses and capital expenditure requirements for at least twelve months from the issuance date of these unaudited interim condensed consolidated financial statements . |
Basis of Presentation, Signific
Basis of Presentation, Significant Accounting Policies and Fair Value Measurements | 9 Months Ended |
Sep. 30, 2022 | |
Basis of Presentation, Significant Accounting Policies and Fair Value Measurements | |
Basis of Presentation, Significant Accounting Policies and Fair Value Measurements | 2. Basis of Presentation, Significant Accounting Policies and Fair Value Measurements Basis of Presentation The unaudited interim condensed consolidated financial statements as of September 30, 2022 and for the three and nine months ended September 30, 2022 and 2021 have been prepared by the Company pursuant to the rules and regulations of the Securities and Exchange Commission (SEC) for interim financial reporting. These condensed consolidated financial statements are unaudited and, in the opinion of management, include all adjustments (consisting only of normal recurring adjustments and accruals) necessary for a fair statement of the results for the periods presented in accordance with accounting principles generally accepted in the United States of America (“GAAP”). The year-end condensed consolidated balance sheet data was derived from the Company’s audited consolidated financial statements but does not include all disclosures required by GAAP. Operating results for the three and nine months ended September 30, 2022 and 2021 are not necessarily indicative of the results that may be expected for the fiscal year ending December 31, 2022. Certain information and footnote disclosures normally included in the annual consolidated financial statements prepared in accordance with GAAP have been omitted in accordance with the SEC’s rules and regulations for interim reporting. Certain amounts have been reclassified from the prior year presentation to conform to current presentation. The Company’s financial position, results of operations and cash flows are presented in U.S. Dollars. The accompanying unaudited condensed consolidated financial statements and related notes should be read in conjunction with the Company’s audited consolidated financial statements for the year ended December 31, 2021, which are included in the Company’s 2021 Annual Report on Form 10-K. Use of Estimates The preparation of financial statements in accordance with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, and the disclosure of contingent assets and liabilities, at the date of the financial statements, as well as the reported amounts of revenues and expenses during the period. The Company evaluates its estimates on an ongoing basis, including those related to the valuation of stock-based awards and certain accruals, and makes changes to the estimates and related disclosures as experience develops or new information becomes known. These estimates are based on historical experience and various other assumptions believed reasonable under the circumstances. Actual results will most likely differ from those estimates. Segment Information GAAP requires segmentation based on an entity’s internal organization and reporting of revenue and operating income based upon internal accounting methods commonly referred to as the “management approach.” Operating segments are defined as components of an enterprise about which separate financial information is available that is evaluated regularly by the chief operating decision maker (CODM), or decision making group, in deciding how to allocate resources and in assessing performance. The Company’s CODM is its Chief Executive Officer. The Company has determined that it has one operating and reporting segment. Summary of Significant Accounting Policies The Company’s significant accounting policies are disclosed in Note 2 of the consolidated financial statements for the years ended December 31, 2021 and 2020, which are included in the Company’s 2021 Annual Report on Form 10-K. There have been no material changes to the Company’s significant accounting policies during the nine months ended September 30, 2022. Cash, Cash Equivalents, and Concentration of Credit Risk The Company considers all highly liquid investments with a maturity of three months or less at the date of purchase to be cash equivalents. Financial instruments that potentially subject the Company to concentrations of credit risk consist of cash and cash equivalents. The Company is exposed to credit risk, subject to federal deposit insurance, in the event of default by the financial institutions holding its cash and cash equivalents to the extent of amounts recorded on the condensed consolidated balance sheet. All of the Company’s cash and cash equivalents are held with Silicon Valley Bank (“SVB”). Accounts Receivable Accounts receivable are stated at net realizable value and net of an allowance for credit losses as of each balance sheet date, if applicable. One customer accounted for 98% at September 30, 2022 and December 31, 2021. As of September 30, 2022 and December 31, 2021, the Company has not recorded an allowance for credit losses. Long-Lived Assets The Company reviews long-lived assets, including definite-life intangible assets, for realizability on an ongoing basis. Changes in depreciation and amortization, generally accelerated depreciation and variable amortization, are determined and recorded when estimates of the remaining useful lives or residual values of long-term assets change. The Company also reviews for impairment when conditions exist that indicate the carrying amount of the assets may not be fully recoverable. In those circumstances, the Company performs undiscounted operating cash flow analyses to determine if an impairment exists. When testing for asset impairment, the Company groups assets and liabilities at the lowest level for which cash flows are separately identifiable. Any impairment loss is calculated as the excess of the asset’s carrying value over its estimated fair value. Fair value is estimated based on the discounted cash flows for the asset group over the remaining useful life or based on the expected cash proceeds for the asset less costs of disposal. Any impairment losses would be recorded in the consolidated statements of operations. To date, no such impairments have occurred. Goodwill The Company assesses goodwill for impairment at least annually as of July 1 or whenever events or changes in circumstances indicate that the carrying amount of such assets may not be recoverable. For example, significant and unanticipated changes or our inability to obtain or maintain regulatory approvals for our product candidates, including the NDA for YUTREPIA, could trigger testing of our goodwill for impairment at an interim date. The Company has one reporting unit. The Company has the option to first assess qualitative factors to determine whether events or circumstances indicate it is more likely than not that the fair value of a reporting unit is greater than its carrying amount, in which case a quantitative impairment test is not required. Per ASC 350 Intangibles Goodwill and Other, As of September 30, 2022, the Company concluded there were no events or changes in circumstances that indicated that the carrying amount of goodwill was not recoverable. The Company completed its last annual impairment test as of July 1, 2022 and concluded that no impairments have occurred. Revenue Recognition The Company recognizes revenue in accordance with ASC 606 Revenue from Contracts with Customers ● Step 1: Identify the contract with the customer ● Step 2: Identify the performance obligations in the contract ● Step 3: Determine the transaction price ● Step 4: Allocate the transaction price to the performance obligations in the contract ● Step 5: Recognize revenue when the company satisfies a performance obligation In order to identify the performance obligations in a contract with a customer, the Company assesses the promised goods or services in the contract and identifies each promised good or service that is distinct. If a good or service is not distinct, the good or service is combined with other promised goods or services until a bundle of goods or services is identified that is distinct. The transaction price is the amount of consideration to which an entity expects to be entitled in exchange for transferring promised goods or services to a customer. The consideration promised in a contract with a customer may include fixed amounts, variable amounts, or both. Variable consideration is included in the transaction price only to the extent that it is probable that a significant reversal in the amount of cumulative revenue recognized will not occur when the uncertainty associated with the variable consideration is subsequently resolved. The Company evaluates any non-cash consideration, consideration payable to the customer, potential returns and refunds, and whether consideration contains a significant financing element in determining the transaction price. Revenue is measured based on consideration specified in a contract with a customer. The Company recognizes revenue when it satisfies a performance obligation by transferring control over a service to a customer. The amount of revenue recognized reflects estimates for refunds and returns, which are presented as a reduction of Accounts receivable where the right of setoff exists. Stock-Based Compensation The Company estimates the grant date fair value of its stock-based awards and amortizes this fair value to compensation expense over the requisite service period or the vesting period of the respective award (see Note 6). Net Loss Per Share Basic net loss per share is calculated by dividing net loss attributable to common stockholders by the weighted average shares outstanding during the period, without consideration of common stock equivalents. Diluted net loss per share is calculated by adjusting weighted average shares outstanding for the dilutive effect of common stock equivalents outstanding for the period, determined using the treasury-stock method. Due to their anti-dilutive effect, the calculation of diluted net loss per share for the three and nine months ended September 30, 2022 and 2021 does not include the following common stock equivalent shares: Three Months Ended Nine Months Ended September 30, September 30, 2022 2021 2022 2021 Stock Options 8,392,551 5,451,114 7,531,023 5,101,347 Restricted Stock Units 419,667 283,691 395,560 304,230 Warrants 450,000 200,000 443,590 158,242 Total 9,262,218 5,934,805 8,370,173 5,563,819 For the three and nine months ended September 30, 2022 and 2021, certain common stock warrants are included in the calculation of basic and diluted net loss per share since their exercise price is de minimis. Recent Accounting Pronouncements In August 2020, the FASB issued ASU 2020-06, Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity In May 2021, the FASB issued ASU 2021-04, Issuer’s Accounting for Certain Modifications or Exchanges of Freestanding Equity-Classified Written Call Options . This guidance clarifies and reduces diversity in the accounting for modifications or exchanges of freestanding equity-classified written call options (for example warrants) that remain equity classified after modification or exchange. Effective January 1, 2022, the Company adopted ASU 2021-04, which had no impact on the Company’s financial statements and related disclosures. Fair Value Measurements The Company’s valuation of financial instruments is based on a three-tiered approach, which requires that fair value measurements be classified and disclosed in one of three tiers. The fair value hierarchy defines a three-level valuation hierarchy for disclosure of fair value measurements as follows: Level 1 — Quoted prices in active markets for identical assets or liabilities; Level 2 — Inputs other than quoted prices included in active markets that are observable for the asset or liability, either directly or indirectly; and Level 3 — Unobservable inputs for the asset and liability used to measure fair value, to the extent that observable inputs are not available. The categorization of a financial instrument within the valuation hierarchy is based upon the lowest level of input that is significant to the fair value measurement. The following tables present the placement in the fair value hierarchy of financial assets and liabilities measured at fair value as of September 30, 2022 and December 31, 2021: Quoted Significant Prices in Other Significant Active Observable Unobservable Markets Inputs Inputs Carrying September 30, 2022 (Level 1) (Level 2) (Level 3) Value Assets Money market mutual funds (cash equivalents) $ 97,322 $ — $ — $ 97,322 Liabilities A&R Silicon Valley Bank term loan $ — $ 18,994 $ — $ 19,741 Total $ — $ 18,994 $ — $ 19,741 Quoted Significant Prices in Other Significant Active Observable Unobservable Markets Inputs Inputs Carrying December 31, 2021 (Level 1) (Level 2) (Level 3) Value Assets Money market mutual funds (cash equivalents) $ 56,494 $ — $ — $ 56,494 Liabilities Silicon Valley Bank term loan $ — $ 10,021 $ — $ 10,410 Money market mutual funds are included in cash and cash equivalents on the Company's condensed consolidated balance sheets. They are valued using quoted market prices and therefore are classified within Level 1 of the fair value hierarchy. The carrying amounts reflected in the Company's condensed consolidated balance sheets for cash, prepaid expenses and other current assets, accounts payable and accrued expenses and other liabilities approximate their fair values due to their short-term nature. The fair value of debt is measured in accordance with ASC 820, Financial Instruments The fair value is determined based on the remaining years to maturity, interest and principal payments, as well as an interest rate consistent with the Company’s current estimated cost of debt. |
Property, Plant and Equipment
Property, Plant and Equipment | 9 Months Ended |
Sep. 30, 2022 | |
Property, Plant and Equipment | |
Property, Plant and Equipment | 3. Property, Plant, and Equipment Property, plant and equipment consisted of the following: September 30, December 31, 2022 2021 Lab and build-to-suit equipment $ 6,562 $ 6,600 Office equipment 19 19 Furniture and fixtures 177 177 Computer equipment 347 347 Leasehold improvements 11,457 11,457 Construction-in-progress 80 — Total property, plant and equipment 18,642 18,600 Accumulated depreciation and amortization (14,699) (13,583) Property, plant and equipment, net $ 3,943 $ 5,017 The Company recorded depreciation and amortization expense related to property, plant and equipment of $0.4 million for both the three months ended September 30, 2022 and 2021 and of $1.2 million and $1.4 million for the nine months ended September 30, 2022 and 2021, respectively. |
Contract Acquisition Costs and
Contract Acquisition Costs and Intangible Asset | 9 Months Ended |
Sep. 30, 2022 | |
Contract Acquisition Costs and Intangible Asset | |
Contract Acquisition Costs and Intangible Asset | 4. Contract Acquisition Costs and Intangible Asset The Company is amortizing the value of the contract acquisition costs and intangible asset on a pro-rata basis based on the estimated total revenue or net profits to be recognized over the period from November 18, 2020 through May 2027, the termination date of the Promotion Agreement (see Note 2-Revenue Recognition for accounting policy). Amortization of contract acquisition costs is recorded as a reduction of revenue and amortization of the intangible asset is recorded as cost of revenue. The Company recorded amortization related to the contract acquisition costs of $0.5 million and $0.8 million for the three months ended September 30, 2022 and 2021, respectively, and of $1.3 million and $2.4 million for the nine months ended September 30, 2022 and 2021, respectively. The Company recorded amortization related to the intangible asset of $0.2 million and $0.3 million for the three months ended September 30, 2022 and 2021, respectively, and of $0.6 million and $1.0 million for the nine months ended September 30, 2022 and 2021, respectively. |
Indemnification Asset with Rela
Indemnification Asset with Related Party and Litigation Finance Payable | 9 Months Ended |
Sep. 30, 2022 | |
Indemnification Asset with Related Party and Litigation Finance Payable | |
Indemnification Asset with Related Party and Litigation Finance Payable | 5. Indemnification Asset with Related Party and Litigation Finance Payable On June 3, 2020, Liquidia PAH entered into a litigation financing arrangement (the “Financing Agreement”) with Henderson SPV, LLC (“Henderson”). Liquidia PAH, along with Sandoz (collectively the “Plaintiffs”), are pursuing litigation against United Therapeutics Corporation (“United Therapeutics”) and, prior to entering into a binding settlement term sheet with Smiths Medical ASC (“Smiths Medical”) in November 2020, were pursuing litigation against Smiths Medical (collectively, the “RareGen Litigation”). Under the Financing Agreement, Henderson will fund Liquidia PAH’s legal and litigation expenses (referred to as “Deployments”) in exchange for a share of certain litigation or settlement proceeds. Deployments received from Henderson are recorded as a Litigation finance payable. Litigation proceeds will be split equally between Liquidia PAH and Sandoz. Unless there is an event of default by Henderson, litigation proceeds received by Liquidia PAH must be applied first to repayment of total Deployments received. Litigation proceeds in excess of Deployments received are split between Liquidia PAH and Henderson according to a formula. Unless there is an event of default by PBM, proceeds received by Liquidia PAH are due to PBM as described further below. On November 17, 2020, Liquidia PAH entered into a Litigation Funding and Indemnification Agreement (“Indemnification Agreement”) with PBM. PBM is considered to be a related party as it is controlled by a major stockholder (which beneficially owns approximately 9.3% of Liquidia Corporation Common Stock as of August 1, 2022) who is also a member of the Company’s Board of Directors. Under the terms of the Indemnification Agreement, PBM now controls the litigation, with Liquidia PAH’s primary responsibility being to cooperate to support the litigation proceedings as needed. The Indemnification Agreement provides that Liquidia PAH and its affiliates will not be entitled to any proceeds resulting from, or bear any financial or other liability for, the RareGen Litigation unless there is an event of default by PBM. Any Liquidia PAH litigation expenses not reimbursed by Henderson under the Financing Agreement will be reimbursed by PBM. Any proceeds received which Henderson is not entitled to under the Financing Agreement will be due to PBM. The Indemnification Asset is increased as the Company records third party legal and litigation expenses related to the United Therapeutics and Smiths Medical litigation. As of September 30, 2022 and December 31, 2021, the Indemnification Asset and Litigation Finance Payable were classified as long-term assets and liabilities, respectively as it is considered unlikely that the RareGen Litigation would conclude prior to September 30, 2023. |
Accrued Expenses and Other Curr
Accrued Expenses and Other Current Liabilities | 9 Months Ended |
Sep. 30, 2022 | |
Accrued Expenses and Other Current Liabilities | |
Accrued Expenses and Other Current Liabilities | 6. Accrued Expenses and Other Current Liabilities Accrued expenses and other current liabilities consisted of the following: September 30, December 31, 2022 2021 Accrued compensation $ 2,203 $ 3,157 Accrued research and development expenses 1,716 344 Accrued other expenses 1,305 1,670 Total accrued expenses and other current liabilities $ 5,224 $ 5,171 |
Stockholders' Equity
Stockholders' Equity | 9 Months Ended |
Sep. 30, 2022 | |
Stockholders' Equity | |
Stockholders' Equity | 7. Stockholders’ Equity Common Stock Issuance of Common Stock on April 18, 2022 from an Underwritten Public Offering On April 12, 2022, the Company sold 11,274,510 shares of the Company’s common stock in an underwritten registered public offering at an offering price of $5.10 per share (the “Offering”). The Offering closed on April 18, 2022, and the Company received net proceeds of approximately $54.5 million from the sale of the shares, after deducting the underwriting discounts and commissions and other offering expenses. The Company intends to use the net proceeds from this Offering for ongoing commercial development of YUTREPIA, for continued development of YUTREPIA in other clinical trials, for pre-clinical pipeline activities and for general corporate purposes. Caligan Partners LP (“Caligan”), the Company’s largest stockholder, and Paul B. Manning, a member of the Company’s board of directors, participated in the Offering and purchased shares of common stock in an aggregate amount of $11.0 million at the public offering price per share and on the same terms as the other purchasers in the Offering. Caligan purchased 1,764,705 shares of common stock in the Offering for an aggregate purchase price of $9.0 million and Paul B. Manning purchased 392,156 shares of common stock in the Offering for an aggregate purchase price of $2.0 million. Issuance of Common Stock on March 31, 2022 from Merger Transaction On November 18, 2020 (the “Closing Date”), the Company completed the acquisition of RareGen as contemplated by that certain Agreement and Plan of Merger, dated as of June 29, 2020, as amended by a Limited Waiver and Modification to the Merger Agreement, dated as of August 3, 2020 (the “Merger Agreement”). On the Closing Date, an aggregate of 5,550,000 shares of the Company’s common stock, were issued to RareGen members in exchange for all of the issued and outstanding RareGen equity. On March 31, 2022, an aggregate of 616,666 shares of the Company’s common stock, which were held back on the Closing Date for indemnification purposes, were issued to RareGen members. Issuance of Common Stock on April 13, 2021 from a Private Placement On April 12, 2021, the Company entered into a Common Stock Purchase Agreement (the “Purchase Agreement”) with a fund and account managed by Caligan Partners LP and certain other accredited investors for the sale by the Company in a private placement (the “Private Placement”) of an aggregate of 8,626,037 shares of the Company’s Common Stock at a purchase price of $2.52 per share. The Private Placement closed on April 13, 2021 and the Company received gross proceeds of approximately $21.7 million. Warrants During the nine months ended September 30, 2022 and 2021, no warrants to purchase shares of common stock were exercised. As of September 30, 2022, outstanding warrants consisted of the following: Number of warrants Exercise Price Expiration Date A&R SVB Warrant - Initial Tranche (see Note 11) 250,000 $ 5.14 January 6, 2032 SVB Warrant - Initial Tranche (see Note 11) 100,000 $ 3.05 February 26, 2031 SVB Warrant - Term B and Term C Tranches (see Note 11) 100,000 $ n/a February 26, 2031 Other warrants 65,572 $ 0.02 December 31, 2026 |
Stock-Based Compensation
Stock-Based Compensation | 9 Months Ended |
Sep. 30, 2022 | |
Stock-Based Compensation. | |
Stock-Based Compensation | 8. Stock-Based Compensation 2020 Long-Term Incentive Plan The Company’s 2020 Long-Term Incentive Plan (the “2020 Plan”) provides for the granting of stock appreciation rights, stock awards, stock units, and other stock-based awards and for accelerated vesting under certain change of control transactions. The number of shares of the Company’s common stock available for issuance under the 2020 plan will automatically increase on January 1 of each year through 2030, by an amount equal to the smaller of (a) 4% of the number of shares of common stock issued and outstanding on the immediately preceding December 31, or (b) an amount determined by the Board of Directors (the “Evergreen Provision”). On January 1, 2022, the number of shares of common stock available for issuance under the 2020 Plan automatically increased by 2,091,509 shares pursuant to the Evergreen Provision. On June 16, 2022, the number of shares of common stock available for issuance under the 2020 Plan increased by 1,600,000 shares pursuant to an amendment to the 2020 Plan, which was approved by the Company’s stockholders. As of September 30, 2022, the Company had 232,678 shares of common stock available to issue under the 2020 Plan. The 2020 Plan replaced the Company’s prior equity award plans and such plans have been discontinued, however, the outstanding awards will continue to remain in effect in accordance with their terms. Shares that are returned under these prior plans upon cancellation, termination or expiration of awards outstanding will not be available for grant under the 2020 Plan. As of September 30, 2022, the Company had a total of 676,629 shares of common stock reserved for issuance related to the remaining outstanding equity awards granted under the prior plans. 2022 Inducement Plan On January 25, 2022, the Board approved the adoption of the Company’s 2022 Inducement Plan (the “2022 Inducement Plan”). The 2022 Inducement Plan was recommended for approval by the Compensation Committee of the Board (the “Compensation Committee”), and subsequently approved and adopted by the Board without stockholder approval pursuant to Rule 5635(c)(4) of the rules and regulations of The Nasdaq Stock Market, LLC (the “Nasdaq Listing Rules”). The Company reserved 310,000 shares of the Company's common stock for issuance pursuant to equity awards granted under the 2022 Inducement Plan, and the 2022 Inducement Plan will be administered by the Compensation Committee. In accordance with Rule 5635(c)(4) of the Nasdaq Listing Rules, equity awards under the 2022 Inducement Plan may only be made to an employee who has not previously been an employee or member of the Board (or any subsidiary of the Company), or following a bona fide period of non-employment by the Company (or a subsidiary of the Company), if he or she is granted such equity awards in connection with his or her commencement of employment with the Company or a subsidiary and such grant is an inducement material to his or her entering into employment with the Company or such subsidiary. As of September 30, 2022, the Company had a total of 10,800 shares available to issue under the 2022 Inducement Plan. Employee Stock Purchase Plan In November 2020, stockholders approved the Liquidia Corporation 2020 Employee Stock Purchase Plan (the “ESPP”). On January 1, 2022, in connection with an evergreen provision contained in the ESPP, an additional 150,000 shares of the Company’s common stock were reserved for issuance under the ESPP. As of September 30, 2022, a total of 548,059 shares of the Company’s common stock are reserved for issuance under the ESPP. The ESPP allows eligible employees to purchase shares of the Company’s common stock at a discount through payroll deductions, subject to plan limitations. Unless otherwise determined by the administrator, the Company’s common stock will be purchased for the accounts of employees participating in the ESPP at a price per share that is 85% of the lesser of the fair market value of the Company’s common stock on the first and last trading day of the offering period. During the three and nine months ended September 30, 2022, 46,924 and 51,941 shares were issued under the ESPP, respectively. CEO Options During December 2020, the Company issued a stock option grant to its then new Chief Executive Officer, Damian deGoa, to purchase up to 2,000,000 shares of the Company’s common stock (the “CEO Option”) at the exercise price on the grant date of $3.00 per share. The CEO Option was issued outside of the 2020 Plan and 1,375,000 options vested in the fourth quarter of 2021 upon the Company’s achievement of certain milestones and the passage of time, and ceased vesting upon the termination of Mr. deGoa’s employment on January 31, 2022. However, the CEO Option will remain exercisable so long as Mr. deGoa remains a director of the Company in accordance with his Separation Agreement. This change to vesting terms was treated as a modification of the original award resulting in a stock-based compensation charge of $2.9 million during the three months ended March 31, 2022. Quarterly Bonus and Second Tranche Options On June 16, 2022, pursuant to Roger Jeffs’s executive employment agreement dated January 3, 2022 (the “Jeffs Employment Agreement”), the Company granted Dr. Jeffs 931,745 nonstatutory stock options (the “Second Tranche Option”), with an exercise price per share equal to the closing price of a share of common stock on the date of grant. The Second Tranche Option is subject to the following vesting schedule: 25% of the grant will become vested and exercisable on January 3, 2023, and the remaining portion of the grant will become vested and exercisable, as applicable, in equal monthly installments over the following thirty-six months The Jeffs Employment Agreement also entitled Dr. Jeffs to a quarterly cash bonus equal in the aggregate to the difference (only if positive) between the per share closing price of the Company’s common stock on the date which the Second Tranche Option is granted minus the per share closing price of common stock on January 3, 2022 (the “Quarterly Bonus”). The Company previously concluded that the Quarterly Bonus was a liability classified cash-settled stock appreciation right under ASC 718-10-25-11 that would be expensed over the service period. During the three months ended March 31, 2022 the Company recorded a stock-based compensation charge of $56,000 related to the Quarterly Bonus. This charge was reversed during the three months ended June 30, 2022 since no Quarterly Bonus will be payable as the per share closing price of common stock on the grant date of Second Tranche Option was less than the per share closing price on January 3, 2022. Stock-Based Compensation Valuation and Expense The Company accounts for its employee stock-based compensation plans using the fair value method. The fair value method requires the Company to estimate the grant-date fair value of its stock-based awards and amortize this fair value to compensation expense over the requisite service period or vesting term. The fair value of each option grant is estimated using a Black-Scholes option-pricing model. For restricted stock units (“RSUs”), the grant-date fair value is based upon the market price of the Company’s common stock on the date of the grant. This fair value is then amortized to compensation expense over the requisite service period or vesting term. Total stock-based compensation expense recognized for employees and non-employees was as follows: Three Months Ended Nine Months Ended September 30, September 30, By Expense Category: 2022 2021 2022 2021 Research and development $ 323 $ 288 $ 1,043 $ 817 General and administrative 1,325 936 6,437 2,105 Total stock-based compensation expense $ 1,648 $ 1,224 $ 7,480 $ 2,922 The following table summarizes the unamortized compensation expense and the remaining years over which such expense would be expected to be recognized, on a weighted average basis, by type of award: As of September 30, 2022 Weighted Average Remaining Recognition Unamortized Period Expense (Years) Stock options $ 17,046 3.1 Restricted stock units $ 1,974 3.0 Fair Value of The Company uses the Black-Scholes option-pricing model to determine the fair value of stock options granted and purchase rights issued under the ESPP. The following table summarizes the assumptions used for estimating the fair value of stock options granted under the Black-Scholes option-pricing model: Nine Months Ended September 30, 2022 2021 Expected dividend yield — — Risk-free interest rate 1.46% - 3.34% 0.62% - 1.67% Expected volatility 90% - 95% 91% - 96% Expected life (years) 5.8 - 6.1 5.2 - 6.1 The weighted average fair value for options granted during the nine months ended September 30, 2022 and 2021 was $4.11 and $2.02 per share, respectively. The following table summarizes the assumptions used for estimating the fair value of purchase rights granted to employees under the ESPP under the Black-Scholes option-pricing model during the nine months ended September 30, 2022: Expected dividend yield — Risk-free interest rate 0.69% - 3.92% Expected volatility 80% - 129% Expected life (years) 0.50 The following table summarizes the Company’s stock option activity during the nine months ended September 30, 2022: Weighted Weighted Average Average Contractual Aggregate Number of Exercise Term Intrinsic Shares Price (in years) Value Outstanding as of December 31, 2021 5,598,009 $ 4.19 Granted 4,485,277 5.22 Exercised (193,331) 3.81 Cancelled (1,413,738) 5.79 Outstanding as of September 30, 2022 8,476,217 $ 4.48 8.7 $ 10,903 Exercisable as of September 30, 2022 3,178,296 $ 3.99 7.9 $ 6,622 Vested and expected to vest as of September 30, 2022 7,887,409 $ 4.46 8.7 $ 10,394 The aggregate intrinsic value of stock options in the table above represents the difference between the $5.44 closing price of the Company’s common stock as of September 30, 2022 and the exercise price of outstanding, exercisable, and vested and expected to vest in-the-money stock options. Restricted Stock Units Restricted Stock Units (“RSUs”) represent the right to receive shares of common stock of the Company at the end of a specified time period or upon the achievement of a specific milestone. RSUs can only be settled in shares of the Company’s common stock. During the nine months ended September 30, 2022, the Board of Directors approved grants of an aggregate of A summary of nonvested RSU awards outstanding as of September 30, 2022 and changes during the nine months ended September 30, 2022 is as follows: Weighted Average Grant-Date Number of Fair Value RSUs (per RSU) Nonvested as of December 31, 2021 15,204 $ 3.31 Granted 503,403 5.64 Vested (36,688) 4.89 Forfeited (53,350) 6.25 Nonvested as of September 30, 2022 428,569 $ 5.55 |
Revenue From Contracts With Cus
Revenue From Contracts With Customers | 9 Months Ended |
Sep. 30, 2022 | |
Revenue From Contracts With Customers | |
Revenue From Contracts With Customers | 9. Revenue From Contracts With Customers On August 1, 2018, the Company partnered with Sandoz in the Promotion Agreement to launch the first-to-file generic of Treprostinil Injection for the treatment of patients with PAH. Under the Promotion Agreement, the Company provides certain promotional and nonpromotional activities on an exclusive basis for the product in the United States of America for the treatment of PAH. In addition, the Company paid Sandoz $20 million at the inception of the Promotion Agreement, in consideration for the right to conduct the promotional and nonpromotional activities for the product. In exchange for its services, the Company is entitled to receive a portion of net profits, as defined within the Promotion Agreement, based on specified profit levels associated with the product. See Note 2 for Revenue Recognition accounting policy. In accordance with the Promotion Agreement, Liquidia PAH receives consideration from Sandoz in the form of a share of Net Profits for the promotional activities it performs. The share of Net Profits received is subject to adjustments from Sandoz for items such as distributor chargebacks, rebates, inventory returns, inventory write-offs and other adjustments (the “Net Profits Adjustment”). The Company expects to refund certain amounts to Sandoz through a reduction of the cash received from future Net Profits generated under the Promotion Agreement. As of September 30, 2022, a $0.5 million refund liability is offset against accounts receivable from Sandoz. The Company derived approximately 97% and 98% of its revenue from the Promotion Agreement during three and nine months ended September 30, 2022. |
Leases
Leases | 9 Months Ended |
Sep. 30, 2022 | |
Leases | |
Leases | 10. Leases The Company leases certain laboratory space, office space, and equipment. Leases with an initial term of 12 months or less are not recorded on the balance sheet; the Company recognizes lease expense for these leases on a straight-line basis over the lease term. For lease agreements entered into or reassessed after the adoption of ASC 842 Leases , the Company combines lease and non-lease components, if any. Most leases include one or more options to renew. The exercise of lease renewal options is at the Company’s sole discretion. Certain leases also include options to purchase the leased property. Consistent with past practice and current intent, the Company has recognized all such purchase options as part of its right-of-use assets and lease liabilities. The depreciable life of assets and leasehold improvements are limited by the expected lease term unless there is a transfer of title or purchase option reasonably certain of exercise. The Company’s lease agreements do not contain any material residual value guarantees or material restrictive covenants. The Company conducts its operations from leased facilities of approximately 45,000 square feet in Morrisville, North Carolina with a lease expiration date of October 31, 2026. Operating lease cost is allocated between research and development and general and administrative based usage of leased facilities. In addition, the Company leases specialized laboratory equipment under finance leases. The related right-of-use assets are amortized on a straight-line basis over the lesser of the lease term or the estimated useful life of the asset. The Company does not have access to certain inputs used by its lessors to calculate the rate implicit in its finance leases. As such, the Company utilized its estimated incremental borrowing rate for the discount rate applied to its finance leases. The original incremental borrowing rate used on finance leases was 7.5% . During February 2021, the Company exercised the lease purchase option for certain finance leases that had expired and entered into a lease modification agreement with its existing lessor for certain other finance leases. The modification resulted in an increase in the remaining lease term of between 24 and 48 months as well as a decrease in the monthly payments associated with the respective modified leases. The incremental borrowing rate used on the modified leases was 6.5% . The lease modification had an immaterial impact on the Company’s condensed consolidated financial statements. The Company’s lease cost is reflected in the accompanying condensed statements of operations and comprehensive loss as follows Three Months Ended September 30, Nine Months Ended September 30, Classification 2022 2021 2022 2021 Operating lease cost: Fixed lease cost Research and development $ 176 $ 176 $ 527 $ 527 Fixed lease cost General and administrative 19 19 58 58 Finance lease cost: Amortization of lease assets Research and development 31 42 105 227 Interest on lease liabilities Interest expense 7 13 26 32 Total Lease Cost $ 233 $ 250 $ 716 $ 844 The weighted average remaining lease term and discount rates as of September 30, 2022 were as follows: Weighted average remaining lease term (years): Operating leases 4.1 Finance leases 2.0 Weighted average discount rate: Operating leases 10.3 % Finance leases 6.5 % The discount rate for leases was estimated based upon market rates of collateralized loan obligations of comparable companies on comparable terms. The future minimum lease payment as of September 30, 2022 were as follows: Operating Finance Year ending December 31: Leases Leases Total 2022 (three months remaining) $ 315 $ 82 $ 397 2023 1,283 195 1,478 2024 1,317 115 1,432 2025 1,356 64 1,420 2026 1,158 — 1,158 Total minimum lease payments 5,429 456 5,885 Less: Interest (992) (28) (1,020) Present value of lease liabilities $ 4,437 $ 428 $ 4,865 |
Long-Term Debt
Long-Term Debt | 9 Months Ended |
Sep. 30, 2022 | |
Long-term Debt | |
Long-term Debt | 11. Long-Term Debt Long-term debt consisted of the following as of September 30, 2022 and December 31, 2021: September 30, December 31, Maturity Date 2022 2021 A&R Silicon Valley Bank term loan December 1, 2025 $ 19,741 $ — Silicon Valley Bank term loan September 1, 2024 — 10,410 Long-term debt $ 19,741 $ 10,410 Amended and Restated Loan and Security Agreement dated January 7, 2022 On January 7, 2022 (the “A&R SVB LSA Effective Date”), the Company entered into an Amended and Restated Loan and Security Agreement with SVB and SVB Innovation Credit Fund VIII, L.P. (“Innovation”) (the “A&R SVB LSA”). The A&R SVB LSA established a term loan facility in the aggregate principal amount of up to $40.0 million. Under the terms of the A&R SVB LSA, SVB and Innovation will make loans available in three tranches, with Extinguishments of Liabilities The first tranche also provides the option of drawing an additional $5.0 million at the Company’s discretion through December 31, 2022. A second tranche of $7.5 million is available to fund immediately upon receipt of final and unconditional approval by the FDA for YUTREPIA by December 31, 2022. The third tranche of $7.5 million will be available through August 31, 2023, upon generating trailing six-month net product sales of YUTREPIA of $27.5 million by June 30, 2023. The debt facility will mature on December 1, 2025, and will consist of interest-only payments through December 31, 2023, unless the third tranche milestone is achieved, in which case interest-only payments will continue through December 31, 2024. The Company is unlikely to achieve the milestones for the second and third tranches under the A&R SVB LSA due to the ongoing litigation as described in Note 12, so those tranches are unlikely to be available to the Company and the interest-only payments are unlikely to be extended to December 31, 2024. The outstanding principal amount of the term loans shall accrue interest at a floating rate per year equal to the greater of The A&R SVB LSA contains customary affirmative and negative covenants, including but not limited to certain financial covenants, protection of intellectual property rights, the disposition of certain assets, and material adverse changes. The Company was in compliance with all such covenants at September 30, 2022. As an inducement to enter into the A&R SVB LSA, the Company issued SVB, Innovation, and Innovation Credit Fund VIII-A L.P. (“Innovation Credit”) certain warrants to purchase shares of the Company’s common stock pursuant to the Warrant to Purchase Stock agreements by and between the Company and each recipient (collectively, the “A&R SVB Warrants”). The respective A&R SVB Warrants provided recipients the initial right to obtain a total of 250,000 shares of the Company’s stock at an exercise price of $5.14 per share, and there is an opportunity for the recipients to obtain up to 100,000 more warrants based on the advance of the second and third tranches under the A&R SVB LSA. The Company is unlikely to achieve the milestones for the second and third tranches under the A&R SVB LSA, so the 100,000 additional warrants that were linked to the funding of those tranches are unlikely to be issued. The A&R SVB Warrants provide an option for a cashless exercise. In accordance with ASC 470, Debt $0.6 million as a debt discount. The remaining $19.4 million was allocated to the A&R SVB LSA. In addition, the Company incurred fees of less than million, which were recorded as debt issuance costs. The debt discount and debt issuance costs are being amortized to interest expense and the Final Payment Fee is being accreted using the effective interest method over the term of the A&R SVB LSA. The Company evaluated the features of the A&R SVB LSA and A&R SVB Warrants in accordance with ASC 480, Distinguishing Liabilities from Equity , Derivatives and Hedging . The Company determined that the A&R SVB LSA and A&R SVB Warrants did not contain any features that would qualify as a derivative or embedded derivative. In addition, the Company determined that the A&R SVB Warrants should be classified as equity. The estimated fair value of the SVB Warrant was calculated using the Black-Scholes Option Pricing Model based on the following inputs: Expected dividend yield — Risk-free interest rate 1.76% Expected volatility 97.2% Expected life (years) 10.0 Loan and Security Agreement dated February 26, 2021 The Company entered into a Loan and Security Agreement with SVB on February 26, 2021 (the “Effective Date”) and a First Loan Modification Agreement with SVB on August 26, 2021 (the “SVB LSA”). The SVB LSA established a term loan facility in the aggregate principal amount of up to $20.5 million, of which $10.5 million was funded on March 1, 2021 and was used to satisfy the Company’s existing obligations of $9.4 million, with the excess proceeds funded to the Company. The Company accounted for the repayment of the loan obligation in accordance with ASC 405-20, Extinguishments of Liabilities In connection with the Loan Agreement, the Company issued to SVB a warrant, dated as of the Effective Date to purchase 200,000 shares of common stock (the “SVB Warrant”), of which 100,000 shares vested on the Effective Date, with an exercise price per share equal to $3.05 (the “Initial Tranche”). The remaining 100,000 shares did not vest as additional amounts were not funded under the SVB LSA (the “Term B and C Tranches”). The Company evaluated the features of the SVB LSA and SVB Warrant in accordance with ASC 480, Distinguishing Liabilities from Equity , Derivatives and Hedging . The Company determined that the Loan Agreement and Warrant did not contain any features that would qualify as a derivative or embedded derivative. In addition, the Company determined that the SVB Warrant should be classified as equity. The estimated fair value of the SVB Warrant of was calculated using the Black-Scholes Option Pricing Model based on the following inputs: Expected dividend yield — Risk-free interest rate 1.43% Expected volatility 90.8% Expected life (years) 10.0 Scheduled annual maturities of long-term debt as of September 30, 2022 are as follows: Year ending December 31: 2022 (three months remaining) $ — 2023 — 2024 10,000 2025 10,000 Total 20,000 Less: Unamortized discount, debt issuance costs and accretion (259) Long-term debt, noncurrent $ 19,741 |
Commitments and Contingencies
Commitments and Contingencies | 9 Months Ended |
Sep. 30, 2022 | |
Commitments and Contingencies | |
Commitments and Contingencies | 12. Commitments and Contingencies License Agreements The Company performs research under a license agreement with The University of North Carolina at Chapel Hill (“UNC”) as amended to date (the “UNC License Agreement”). As part of the UNC License Agreement, the Company holds an exclusive license to certain research and development technologies and processes in various stages of patent pursuit, for use in its research and development and commercial activities, with a term until the expiration date of the last to expire patent subject to the UNC License Agreement, subject to industry standard contractual compliance. Under the UNC License Agreement, the Company is obligated to pay UNC royalties equal to a low single digit percentage of all net sales of drug products whose manufacture, use or sale includes any use of the technology or patent rights covered by the UNC License Agreement, including YUTREPIA. The Company may grant sublicenses of UNC licensed intellectual property in return for specified payments based on a percentage of any fee, royalty or other consideration received. Employment Agreements and Other Arrangements The Company has agreements with certain employees which require the funding of specific level or payments if certain events, such as a change in control or termination without cause, occur. The Company enters into contracts and purchase commitments in the normal course of business with contract service providers to assist in the performance of research and development, manufacturing, and corporate activities. Subject to required notice periods and obligations, the Company can elect to discontinue work under these agreements at any time. There were no new material commitments entered into during the nine months ended September 30, 2022. Legal Proceedings The Company from time-to-time is subject to claims and litigation in the normal course of business, none of which the Company believes represent a risk of material loss or exposure. YUTREPIA-Related Litigation In June 2020, United Therapeutics filed a complaint for patent infringement against the Company in the U.S. District Court for the District of Delaware (Case No. 1:20-cv-00755-RGA) (the “Hatch-Waxman Litigation”), asserting infringement by the Company of U.S. Patent Nos. 9,604,901, entitled “Process to Prepare Treprostinil, the Active Ingredient in Remodulin®” (the “‘901 Patent”), and 9,593,066, entitled “Process to Prepare Treprostinil, the Active Ingredient in Remodulin®” (the “‘066 Patent”), relating to United Therapeutics’ Tyvaso®, a nebulized treprostinil solution for the treatment of PAH. United Therapeutics’ complaint was in response to the Company’s NDA for YUTREPIA, filed with the FDA, requesting approval to market YUTREPIA, a dry powder inhalation of treprostinil for the treatment of PAH. The YUTREPIA NDA was filed under the 505(b)(2) regulatory pathway with Tyvaso® as the reference listed drug. In July 2020, the U.S. Patent and Trademark Office (the “USPTO”) issued U.S. Patent No. 10,716,793 (the “‘793 Patent”), entitled “Treprostinil Administration by Inhalation”, to United Therapeutics. In July 2020, United Therapeutics filed an amended complaint in the Hatch-Waxman Litigation asserting infringement of the ‘793 Patent by the practice of YUTREPIA. In June 2021, the Court held a claim construction hearing. Based on the Court’s construction of the claim terms, United Therapeutics filed a stipulation of partial judgment with respect to the ‘901 Patent in December 2021 under which United Therapeutics agreed to the entry of judgment of the Company’s non-infringement of the ’901 Patent. United Therapeutics preserved its appellate rights with respect to the ‘901 Patent in the event the Court’s construction of those terms is reversed. Trial proceedings in the Hatch-Waxman Litigation were held in March 2022. In August 2022, Judge Andrews, who was presiding over the Hatch-Waxman Litigation, issued an opinion that claims 1, 2, 3, 6 and 9 of the ‘066 Patent were invalid, that the remaining asserted claims of the ‘066 Patent were not infringed by the Company, and that all of the asserted claims of the ‘793 Patent were both valid and infringed by the Company, based on the arguments presented by the Company in the Hatch-Waxman Litigation. In September 2022, Judge Andrews entered a final judgment in the Hatch-Waxman Litigation that incorporated the findings from his opinion and ordered that the effective date of any final approval by the FDA of YUTREPIA shall be a date which is not earlier than the expiration date of the ’793 Patent, which will be in 2027. Both the Company and United Therapeutics have appealed Judge Andrews’ decision to the United States Court of Appeals for the Federal Circuit. The appeal remains pending. In September of 2022, following entry of final judgment, the Company filed a motion requesting that Judge Andrews stay enforcement of the order delaying the effective date of any final approval by the FDA of YUTREPIA until the expiration of the ’793 Patent. Briefing on the motion for stay of enforcement is complete, and the motion remains pending with the Court. In March 2020, the Company filed two petitions for inter partes inter partes inter partes inter partes review of the ‘901 Patent and concurrently denied institution on the ‘066 Patent, stating that the ‘066 petition has not established a reasonable likelihood that it would prevail in showing that at least one of the challenged claims is unpatentable. In October 2021, the PTAB issued a final written decision concluding that seven of the claims in the ‘901 patent were unpatentable, leaving only the narrower dependent claims 6 and 7, both of which require actual storage at ambient temperature of treprostinil sodium. In November 2021, United Therapeutics submitted a rehearing request with respect to the PTAB’s decision in the inter partes review of the ‘901 Patent. The rehearing request was denied in June 2022. In August 2022, United Therapeutics appealed the decision of the PTAB with respect to the ‘901 Patent to the United States Court of Appeals for the Federal Circuit. The appeal remains pending. In January 2021, the Company filed a petition for inter partes inter partes ruled in the Company’s favor, concluding that based on the preponderance of the evidence, all the claims of the ’793 Patent have been shown to be unpatentable. In August 2022, United Therapeutics submitted a rehearing request with respect to the PTAB’s decision in the inter partes review of the ‘793 Patent. The rehearing request remains pending with the PTAB. United Therapeutics has publicly stated that, if the rehearing request is denied, it will appeal the PTAB’s decision with respect to the ‘793 Patent. The PTAB’s decision with respect to the ‘793 Patent will not override Judge Andrews’ order in the Hatch-Waxman Litigation that YUTREPIA may not be approved due to infringement of the ‘793 Patent unless and until the decision of the PTAB is affirmed on appeal. Trade Secret Litigation In December 2021, United Therapeutics filed a complaint in the Superior Court in Durham County, North Carolina, alleging that the Company and a former United Therapeutics employee, who later joined the Company as an employee many years after terminating his employment with United Therapeutics, conspired to misappropriate certain trade secrets of United Therapeutics and engaged in unfair or deceptive trade practices. In January 2022, the Company’s co-defendant in the lawsuit removed the lawsuit to the United States District Court for the Middle District of North Carolina. Subsequently, in January 2022, United Therapeutics filed an amended complaint eliminating their claim under the federal Defend Trade Secrets Act and a motion seeking to have the case remanded to North Carolina state court. In April 2022, the Court granted United Therapeutics’ motion to have the case remanded to North Carolina state court. In May 2022, the Company filed a motion to dismiss all of the claims made by United Therapeutics in the lawsuit. The motion was denied by the Court in October 2022. Discovery in the case is ongoing. RareGen Litigation In April 2019, Sandoz and Liquidia PAH (then known as RareGen) filed a complaint against United Therapeutics and Smiths Medical in the District Court of New Jersey (Case No. No. 3:19-cv-10170), (the “RareGen Litigation”), alleging that United Therapeutics and Smiths Medical violated the Sherman Antitrust Act of 1890, state law antitrust statutes and unfair competition statutes by engaging in anticompetitive acts regarding the drug treprostinil for the treatment of PAH. In March 2020, Sandoz and Liquidia PAH filed a first amended complaint adding a claim that United Therapeutics breached a settlement agreement that was entered into in 2015, in which United Therapeutics agreed to not interfere with Sandoz’s efforts to launch its generic treprostinil, by taking calculated steps to restrict and interfere with the launch of Sandoz’s competing generic product. United Therapeutics developed treprostinil under the brand name Remodulin® and Smiths Medical manufactured a pump and cartridges that are used to inject treprostinil into patients continuously throughout the day. Sandoz and Liquidia PAH allege that United Therapeutics and Smiths Medical entered into anticompetitive agreements (i) whereby Smiths Medical placed restrictions on the cartridges such that they can only be used with United Therapeutics’ branded Remodulin® product and (ii) requiring Smiths Medical to enter into agreements with specialty pharmacies to sell the cartridges only for use with Remodulin®. In November 2020, Sandoz and Liquidia PAH entered into a binding term sheet (the “Term Sheet”) with Smiths Medical in order to resolve the outstanding RareGen Litigation solely with respect to disputes between Smiths Medical, Liquidia PAH and Sandoz. In April 2021, Liquidia PAH and Sandoz entered into a Long Form Settlement Agreement (the “Settlement Agreement”) with Smiths Medical to further detail the terms of the settlement among such parties as reflected in the Term Sheet. Pursuant to the Term Sheet and the Settlement Agreement, the former RareGen members and Sandoz received a payment of $4.25 million that was evenly split between the parties. In addition, pursuant to the Term Sheet and Settlement Agreement, Smiths Medical disclosed and made available to Sandoz and Liquidia PAH certain specifications and other information related to the cartridge that Smiths Medical developed and manufactures for use with the CADD-MS 3 infusion pump (the “CADD-MS 3 Cartridge”). Pursuant to the Settlement Agreement, Smiths Medical also granted Liquidia PAH and Sandoz a non-exclusive, royalty-free license in the United States to Smiths Medical’s patents and copyrights associated with the CADD-MS 3 Cartridge and certain other information for use of the CADD-MS 3 pump and the CADD-MS 3 Cartridges. Smiths also agreed in the Settlement Agreement to provide information and assistance in support of Liquidia PAH’s efforts to receive FDA clearance for the RG 3ml Medication Cartridge (the “RG Cartridge”) and to continue to service certain CADD-MS 3 pumps that are available for use with the Treprostinil Injection through January 1, 2025. Liquidia PAH and Sandoz agreed, among other things, to indemnify Smiths from certain liabilities related to the RG Cartridge. In September 2021, United Therapeutics filed a motion for summary judgment with respect to all of the claims brought by Sandoz and Liquidia PAH against United Therapeutics. At the same time, Sandoz filed a motion for summary judgment with respect to the breach of contract claim. In March 2022, the Court issued an order granting partial summary judgment to United Therapeutics with respect to the antitrust and unfair competition claims, denying summary judgment to United Therapeutics with respect to the breach of contract claim, and granting partial summary judgment to Sandoz with respect to the breach of contract claim. The RareGen Litigation will now proceed to a trial to determine the amount of damages due from United Therapeutics to Sandoz with respect to the breach of contract claim. Under the Promotion Agreement, all proceeds from the litigation will be divided evenly between Sandoz and Liquidia PAH. Under the litigation finance agreements that Liquidia PAH has entered into with Henderson and PBM, any net proceeds received by Liquidia PAH with respect to the RareGen Litigation will be divided between Henderson and PBM. |
Basis of Presentation, Signif_2
Basis of Presentation, Significant Accounting Policies and Fair Value Measurements (Policies) | 9 Months Ended |
Sep. 30, 2022 | |
Basis of Presentation, Significant Accounting Policies and Fair Value Measurements | |
Basis of Presentation | Basis of Presentation The unaudited interim condensed consolidated financial statements as of September 30, 2022 and for the three and nine months ended September 30, 2022 and 2021 have been prepared by the Company pursuant to the rules and regulations of the Securities and Exchange Commission (SEC) for interim financial reporting. These condensed consolidated financial statements are unaudited and, in the opinion of management, include all adjustments (consisting only of normal recurring adjustments and accruals) necessary for a fair statement of the results for the periods presented in accordance with accounting principles generally accepted in the United States of America (“GAAP”). The year-end condensed consolidated balance sheet data was derived from the Company’s audited consolidated financial statements but does not include all disclosures required by GAAP. Operating results for the three and nine months ended September 30, 2022 and 2021 are not necessarily indicative of the results that may be expected for the fiscal year ending December 31, 2022. Certain information and footnote disclosures normally included in the annual consolidated financial statements prepared in accordance with GAAP have been omitted in accordance with the SEC’s rules and regulations for interim reporting. Certain amounts have been reclassified from the prior year presentation to conform to current presentation. The Company’s financial position, results of operations and cash flows are presented in U.S. Dollars. The accompanying unaudited condensed consolidated financial statements and related notes should be read in conjunction with the Company’s audited consolidated financial statements for the year ended December 31, 2021, which are included in the Company’s 2021 Annual Report on Form 10-K. |
Use of Estimates | Use of Estimates The preparation of financial statements in accordance with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, and the disclosure of contingent assets and liabilities, at the date of the financial statements, as well as the reported amounts of revenues and expenses during the period. The Company evaluates its estimates on an ongoing basis, including those related to the valuation of stock-based awards and certain accruals, and makes changes to the estimates and related disclosures as experience develops or new information becomes known. These estimates are based on historical experience and various other assumptions believed reasonable under the circumstances. Actual results will most likely differ from those estimates. |
Segment Information | Segment Information GAAP requires segmentation based on an entity’s internal organization and reporting of revenue and operating income based upon internal accounting methods commonly referred to as the “management approach.” Operating segments are defined as components of an enterprise about which separate financial information is available that is evaluated regularly by the chief operating decision maker (CODM), or decision making group, in deciding how to allocate resources and in assessing performance. The Company’s CODM is its Chief Executive Officer. The Company has determined that it has one operating and reporting segment. |
Cash, Cash Equivalents, and Concentration of Credit Risk | Cash, Cash Equivalents, and Concentration of Credit Risk The Company considers all highly liquid investments with a maturity of three months or less at the date of purchase to be cash equivalents. Financial instruments that potentially subject the Company to concentrations of credit risk consist of cash and cash equivalents. The Company is exposed to credit risk, subject to federal deposit insurance, in the event of default by the financial institutions holding its cash and cash equivalents to the extent of amounts recorded on the condensed consolidated balance sheet. All of the Company’s cash and cash equivalents are held with Silicon Valley Bank (“SVB”). |
Accounts Receivable | Accounts Receivable Accounts receivable are stated at net realizable value and net of an allowance for credit losses as of each balance sheet date, if applicable. One customer accounted for 98% at September 30, 2022 and December 31, 2021. As of September 30, 2022 and December 31, 2021, the Company has not recorded an allowance for credit losses. |
Long-Lived Assets | Long-Lived Assets The Company reviews long-lived assets, including definite-life intangible assets, for realizability on an ongoing basis. Changes in depreciation and amortization, generally accelerated depreciation and variable amortization, are determined and recorded when estimates of the remaining useful lives or residual values of long-term assets change. The Company also reviews for impairment when conditions exist that indicate the carrying amount of the assets may not be fully recoverable. In those circumstances, the Company performs undiscounted operating cash flow analyses to determine if an impairment exists. When testing for asset impairment, the Company groups assets and liabilities at the lowest level for which cash flows are separately identifiable. Any impairment loss is calculated as the excess of the asset’s carrying value over its estimated fair value. Fair value is estimated based on the discounted cash flows for the asset group over the remaining useful life or based on the expected cash proceeds for the asset less costs of disposal. Any impairment losses would be recorded in the consolidated statements of operations. To date, no such impairments have occurred. |
Goodwill | Goodwill The Company assesses goodwill for impairment at least annually as of July 1 or whenever events or changes in circumstances indicate that the carrying amount of such assets may not be recoverable. For example, significant and unanticipated changes or our inability to obtain or maintain regulatory approvals for our product candidates, including the NDA for YUTREPIA, could trigger testing of our goodwill for impairment at an interim date. The Company has one reporting unit. The Company has the option to first assess qualitative factors to determine whether events or circumstances indicate it is more likely than not that the fair value of a reporting unit is greater than its carrying amount, in which case a quantitative impairment test is not required. Per ASC 350 Intangibles Goodwill and Other, As of September 30, 2022, the Company concluded there were no events or changes in circumstances that indicated that the carrying amount of goodwill was not recoverable. The Company completed its last annual impairment test as of July 1, 2022 and concluded that no impairments have occurred. |
Revenue Recognition | Revenue Recognition The Company recognizes revenue in accordance with ASC 606 Revenue from Contracts with Customers ● Step 1: Identify the contract with the customer ● Step 2: Identify the performance obligations in the contract ● Step 3: Determine the transaction price ● Step 4: Allocate the transaction price to the performance obligations in the contract ● Step 5: Recognize revenue when the company satisfies a performance obligation In order to identify the performance obligations in a contract with a customer, the Company assesses the promised goods or services in the contract and identifies each promised good or service that is distinct. If a good or service is not distinct, the good or service is combined with other promised goods or services until a bundle of goods or services is identified that is distinct. The transaction price is the amount of consideration to which an entity expects to be entitled in exchange for transferring promised goods or services to a customer. The consideration promised in a contract with a customer may include fixed amounts, variable amounts, or both. Variable consideration is included in the transaction price only to the extent that it is probable that a significant reversal in the amount of cumulative revenue recognized will not occur when the uncertainty associated with the variable consideration is subsequently resolved. The Company evaluates any non-cash consideration, consideration payable to the customer, potential returns and refunds, and whether consideration contains a significant financing element in determining the transaction price. Revenue is measured based on consideration specified in a contract with a customer. The Company recognizes revenue when it satisfies a performance obligation by transferring control over a service to a customer. The amount of revenue recognized reflects estimates for refunds and returns, which are presented as a reduction of Accounts receivable where the right of setoff exists. |
Stock-Based Compensation | Stock-Based Compensation The Company estimates the grant date fair value of its stock-based awards and amortizes this fair value to compensation expense over the requisite service period or the vesting period of the respective award (see Note 6). |
Net Loss Per Share | Net Loss Per Share Basic net loss per share is calculated by dividing net loss attributable to common stockholders by the weighted average shares outstanding during the period, without consideration of common stock equivalents. Diluted net loss per share is calculated by adjusting weighted average shares outstanding for the dilutive effect of common stock equivalents outstanding for the period, determined using the treasury-stock method. Due to their anti-dilutive effect, the calculation of diluted net loss per share for the three and nine months ended September 30, 2022 and 2021 does not include the following common stock equivalent shares: Three Months Ended Nine Months Ended September 30, September 30, 2022 2021 2022 2021 Stock Options 8,392,551 5,451,114 7,531,023 5,101,347 Restricted Stock Units 419,667 283,691 395,560 304,230 Warrants 450,000 200,000 443,590 158,242 Total 9,262,218 5,934,805 8,370,173 5,563,819 For the three and nine months ended September 30, 2022 and 2021, certain common stock warrants are included in the calculation of basic and diluted net loss per share since their exercise price is de minimis. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements In August 2020, the FASB issued ASU 2020-06, Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity In May 2021, the FASB issued ASU 2021-04, Issuer’s Accounting for Certain Modifications or Exchanges of Freestanding Equity-Classified Written Call Options . This guidance clarifies and reduces diversity in the accounting for modifications or exchanges of freestanding equity-classified written call options (for example warrants) that remain equity classified after modification or exchange. Effective January 1, 2022, the Company adopted ASU 2021-04, which had no impact on the Company’s financial statements and related disclosures. |
Fair Value Measurements | Fair Value Measurements The Company’s valuation of financial instruments is based on a three-tiered approach, which requires that fair value measurements be classified and disclosed in one of three tiers. The fair value hierarchy defines a three-level valuation hierarchy for disclosure of fair value measurements as follows: Level 1 — Quoted prices in active markets for identical assets or liabilities; Level 2 — Inputs other than quoted prices included in active markets that are observable for the asset or liability, either directly or indirectly; and Level 3 — Unobservable inputs for the asset and liability used to measure fair value, to the extent that observable inputs are not available. The categorization of a financial instrument within the valuation hierarchy is based upon the lowest level of input that is significant to the fair value measurement. The following tables present the placement in the fair value hierarchy of financial assets and liabilities measured at fair value as of September 30, 2022 and December 31, 2021: Quoted Significant Prices in Other Significant Active Observable Unobservable Markets Inputs Inputs Carrying September 30, 2022 (Level 1) (Level 2) (Level 3) Value Assets Money market mutual funds (cash equivalents) $ 97,322 $ — $ — $ 97,322 Liabilities A&R Silicon Valley Bank term loan $ — $ 18,994 $ — $ 19,741 Total $ — $ 18,994 $ — $ 19,741 Quoted Significant Prices in Other Significant Active Observable Unobservable Markets Inputs Inputs Carrying December 31, 2021 (Level 1) (Level 2) (Level 3) Value Assets Money market mutual funds (cash equivalents) $ 56,494 $ — $ — $ 56,494 Liabilities Silicon Valley Bank term loan $ — $ 10,021 $ — $ 10,410 Money market mutual funds are included in cash and cash equivalents on the Company's condensed consolidated balance sheets. They are valued using quoted market prices and therefore are classified within Level 1 of the fair value hierarchy. The carrying amounts reflected in the Company's condensed consolidated balance sheets for cash, prepaid expenses and other current assets, accounts payable and accrued expenses and other liabilities approximate their fair values due to their short-term nature. The fair value of debt is measured in accordance with ASC 820, Financial Instruments The fair value is determined based on the remaining years to maturity, interest and principal payments, as well as an interest rate consistent with the Company’s current estimated cost of debt. |
Basis of Presentation, Signif_3
Basis of Presentation, Significant Accounting Policies and Fair Value Measurements (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Basis of Presentation, Significant Accounting Policies and Fair Value Measurements | |
Summary of calculation of diluted net loss per share | Three Months Ended Nine Months Ended September 30, September 30, 2022 2021 2022 2021 Stock Options 8,392,551 5,451,114 7,531,023 5,101,347 Restricted Stock Units 419,667 283,691 395,560 304,230 Warrants 450,000 200,000 443,590 158,242 Total 9,262,218 5,934,805 8,370,173 5,563,819 |
Summary of financial assets and liabilities measured at fair value | Quoted Significant Prices in Other Significant Active Observable Unobservable Markets Inputs Inputs Carrying September 30, 2022 (Level 1) (Level 2) (Level 3) Value Assets Money market mutual funds (cash equivalents) $ 97,322 $ — $ — $ 97,322 Liabilities A&R Silicon Valley Bank term loan $ — $ 18,994 $ — $ 19,741 Total $ — $ 18,994 $ — $ 19,741 Quoted Significant Prices in Other Significant Active Observable Unobservable Markets Inputs Inputs Carrying December 31, 2021 (Level 1) (Level 2) (Level 3) Value Assets Money market mutual funds (cash equivalents) $ 56,494 $ — $ — $ 56,494 Liabilities Silicon Valley Bank term loan $ — $ 10,021 $ — $ 10,410 |
Property, Plant and Equipment (
Property, Plant and Equipment (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Property, Plant and Equipment | |
Schedule of Property, plant and equipment | September 30, December 31, 2022 2021 Lab and build-to-suit equipment $ 6,562 $ 6,600 Office equipment 19 19 Furniture and fixtures 177 177 Computer equipment 347 347 Leasehold improvements 11,457 11,457 Construction-in-progress 80 — Total property, plant and equipment 18,642 18,600 Accumulated depreciation and amortization (14,699) (13,583) Property, plant and equipment, net $ 3,943 $ 5,017 |
Accrued Expenses and Other Cu_2
Accrued Expenses and Other Current Liabilities (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Accrued Expenses and Other Current Liabilities | |
Schedule of Accrued expenses and other current liabilities | Accrued expenses and other current liabilities consisted of the following: September 30, December 31, 2022 2021 Accrued compensation $ 2,203 $ 3,157 Accrued research and development expenses 1,716 344 Accrued other expenses 1,305 1,670 Total accrued expenses and other current liabilities $ 5,224 $ 5,171 |
Stockholders' Equity (Tables)
Stockholders' Equity (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Stockholders' Equity | |
Schedule of outstanding warrants | As of September 30, 2022, outstanding warrants consisted of the following: Number of warrants Exercise Price Expiration Date A&R SVB Warrant - Initial Tranche (see Note 11) 250,000 $ 5.14 January 6, 2032 SVB Warrant - Initial Tranche (see Note 11) 100,000 $ 3.05 February 26, 2031 SVB Warrant - Term B and Term C Tranches (see Note 11) 100,000 $ n/a February 26, 2031 Other warrants 65,572 $ 0.02 December 31, 2026 |
Stock-Based Compensation (Table
Stock-Based Compensation (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Schedule of stock-based compensation expense recognized for employees and non-employees | Three Months Ended Nine Months Ended September 30, September 30, By Expense Category: 2022 2021 2022 2021 Research and development $ 323 $ 288 $ 1,043 $ 817 General and administrative 1,325 936 6,437 2,105 Total stock-based compensation expense $ 1,648 $ 1,224 $ 7,480 $ 2,922 |
Schedule of unamortized compensation expense and weighted average remaining recognition period | As of September 30, 2022 Weighted Average Remaining Recognition Unamortized Period Expense (Years) Stock options $ 17,046 3.1 Restricted stock units $ 1,974 3.0 |
Schedule of assumptions used for estimating the fair value of stock options | Nine Months Ended September 30, 2022 2021 Expected dividend yield — — Risk-free interest rate 1.46% - 3.34% 0.62% - 1.67% Expected volatility 90% - 95% 91% - 96% Expected life (years) 5.8 - 6.1 5.2 - 6.1 |
Schedule of stock option activity | Weighted Weighted Average Average Contractual Aggregate Number of Exercise Term Intrinsic Shares Price (in years) Value Outstanding as of December 31, 2021 5,598,009 $ 4.19 Granted 4,485,277 5.22 Exercised (193,331) 3.81 Cancelled (1,413,738) 5.79 Outstanding as of September 30, 2022 8,476,217 $ 4.48 8.7 $ 10,903 Exercisable as of September 30, 2022 3,178,296 $ 3.99 7.9 $ 6,622 Vested and expected to vest as of September 30, 2022 7,887,409 $ 4.46 8.7 $ 10,394 |
Schedule of non vested RSU awards outstanding | Weighted Average Grant-Date Number of Fair Value RSUs (per RSU) Nonvested as of December 31, 2021 15,204 $ 3.31 Granted 503,403 5.64 Vested (36,688) 4.89 Forfeited (53,350) 6.25 Nonvested as of September 30, 2022 428,569 $ 5.55 |
Employee Stock Purchase Plan | |
Schedule of assumptions used for estimating the fair value of stock options | Expected dividend yield — Risk-free interest rate 0.69% - 3.92% Expected volatility 80% - 129% Expected life (years) 0.50 |
Leases (Tables)
Leases (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Leases | |
Lease cost | Three Months Ended September 30, Nine Months Ended September 30, Classification 2022 2021 2022 2021 Operating lease cost: Fixed lease cost Research and development $ 176 $ 176 $ 527 $ 527 Fixed lease cost General and administrative 19 19 58 58 Finance lease cost: Amortization of lease assets Research and development 31 42 105 227 Interest on lease liabilities Interest expense 7 13 26 32 Total Lease Cost $ 233 $ 250 $ 716 $ 844 Weighted average remaining lease term (years): Operating leases 4.1 Finance leases 2.0 Weighted average discount rate: Operating leases 10.3 % Finance leases 6.5 % |
Lease Liability Maturity | Operating Finance Year ending December 31: Leases Leases Total 2022 (three months remaining) $ 315 $ 82 $ 397 2023 1,283 195 1,478 2024 1,317 115 1,432 2025 1,356 64 1,420 2026 1,158 — 1,158 Total minimum lease payments 5,429 456 5,885 Less: Interest (992) (28) (1,020) Present value of lease liabilities $ 4,437 $ 428 $ 4,865 |
Long-term Debt (Tables)
Long-term Debt (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Long-Term Debt | |
Schedule of Long-Term Debt | September 30, December 31, Maturity Date 2022 2021 A&R Silicon Valley Bank term loan December 1, 2025 $ 19,741 $ — Silicon Valley Bank term loan September 1, 2024 — 10,410 Long-term debt $ 19,741 $ 10,410 |
Schedule of Annual Maturities of Long-Term Debt | Year ending December 31: 2022 (three months remaining) $ — 2023 — 2024 10,000 2025 10,000 Total 20,000 Less: Unamortized discount, debt issuance costs and accretion (259) Long-term debt, noncurrent $ 19,741 |
A&R SVB Warrants | |
Long-Term Debt | |
Schedule of Inputs used to Estimate Fair Value of Warrants | Expected dividend yield — Risk-free interest rate 1.76% Expected volatility 97.2% Expected life (years) 10.0 |
SVB Warrant | |
Long-Term Debt | |
Schedule of Inputs used to Estimate Fair Value of Warrants | Expected dividend yield — Risk-free interest rate 1.43% Expected volatility 90.8% Expected life (years) 10.0 |
Business (Details)
Business (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||||||
Sep. 30, 2022 | Jun. 30, 2022 | Mar. 31, 2022 | Sep. 30, 2021 | Jun. 30, 2021 | Mar. 31, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | Dec. 31, 2021 | |
Business | |||||||||
Net loss | $ 9,092 | $ 9,447 | $ 15,943 | $ 7,281 | $ 6,552 | $ 9,183 | $ 34,482 | $ 23,016 | |
Accumulated deficit | $ 344,063 | $ 344,063 | $ 309,581 |
Basis of Presentation, Signif_4
Basis of Presentation, Significant Accounting Policies and Fair Value Measurements - Other (Details) | 9 Months Ended | 12 Months Ended | |
Jul. 01, 2022 USD ($) | Sep. 30, 2022 USD ($) segment customer | Dec. 31, 2021 customer | |
Number of reporting units | 1 | ||
Impairment of long-lived assets | $ 0 | ||
Impairment of goodwill | $ 0 | ||
Number of operating segments | segment | 1 | ||
Credit Concentration Risk | Accounts Receivable | Customer One | |||
Concentration risk, percentage | 98% | 98% | |
Number of customers | customer | 1 | 1 |
Basis of Presentation, Signif_5
Basis of Presentation, Significant Accounting Policies and Fair Value Measurements - Common Stock Equivalent Shares Excluded From Calculation of Diluted Net Loss Per Share (Details) - shares | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Anti-dilutive Shares Excluded from Calculation of Diluted Net Loss Per Share (in shares) | 9,262,218 | 5,934,805 | 8,370,173 | 5,563,819 |
Stock Options | ||||
Anti-dilutive Shares Excluded from Calculation of Diluted Net Loss Per Share (in shares) | 8,392,551 | 5,451,114 | 7,531,023 | 5,101,347 |
Restricted Stock Units (RSUs) | ||||
Anti-dilutive Shares Excluded from Calculation of Diluted Net Loss Per Share (in shares) | 419,667 | 283,691 | 395,560 | 304,230 |
Warrants | ||||
Anti-dilutive Shares Excluded from Calculation of Diluted Net Loss Per Share (in shares) | 450,000 | 200,000 | 443,590 | 158,242 |
Basis of Presentation, Signif_6
Basis of Presentation, Significant Accounting Policies and Fair Value Measurements - Fair Value of Financial Assets and Financial Liabilities (Details) - USD ($) $ in Thousands | Sep. 30, 2022 | Dec. 31, 2021 |
Reported Value Measurement | ||
Fair Value of Financial Instruments | ||
Total liabilities | $ 19,741 | |
Fair Value, Inputs, Level 2 | Estimate of Fair Value Measurement | ||
Fair Value of Financial Instruments | ||
Total liabilities | 18,994 | |
A & R Silicon Valley Bank term loan | Reported Value Measurement | ||
Fair Value of Financial Instruments | ||
Fair value of long-term debt | 19,741 | |
A & R Silicon Valley Bank term loan | Fair Value, Inputs, Level 2 | Estimate of Fair Value Measurement | ||
Fair Value of Financial Instruments | ||
Fair value of long-term debt | 18,994 | |
Money market mutual funds (cash equivalents) | Reported Value Measurement | ||
Fair Value of Financial Instruments | ||
Money market funds | 97,322 | $ 56,494 |
Money market mutual funds (cash equivalents) | Fair Value, Inputs, Level 1 | Estimate of Fair Value Measurement | ||
Fair Value of Financial Instruments | ||
Money market funds | $ 97,322 | 56,494 |
Silicon Valley Bank Term Loan | Reported Value Measurement | ||
Fair Value of Financial Instruments | ||
Debt | 10,410 | |
Silicon Valley Bank Term Loan | Fair Value, Inputs, Level 2 | Estimate of Fair Value Measurement | ||
Fair Value of Financial Instruments | ||
Debt | $ 10,021 |
Property, Plant and Equipment -
Property, Plant and Equipment - Schedule of Property, plant and equipment (Details) - USD ($) $ in Thousands | Sep. 30, 2022 | Dec. 31, 2021 |
Total property, plant and equipment | $ 18,642 | $ 18,600 |
Accumulated depreciation and amortization | (14,699) | (13,583) |
Property, Plant and Equipment, Net, Total | 3,943 | 5,017 |
Lab and build-to-suit equipment | ||
Total property, plant and equipment | 6,562 | 6,600 |
Office equipment | ||
Total property, plant and equipment | 19 | 19 |
Furniture and fixtures | ||
Total property, plant and equipment | 177 | 177 |
Computer equipment | ||
Total property, plant and equipment | 347 | 347 |
Leasehold improvements | ||
Total property, plant and equipment | 11,457 | $ 11,457 |
Construction-in-progress | ||
Total property, plant and equipment | $ 80 |
Property, Plant and Equipment_2
Property, Plant and Equipment (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Property, Plant and Equipment | ||||
Depreciation, Depletion and Amortization, Nonproduction, Total | $ 0.4 | $ 0.4 | $ 1.2 | $ 1.4 |
Contract Acquisition Costs an_2
Contract Acquisition Costs and Intangible Asset (Details) - Merger With RareGen LLC - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Contract Acquisition Costs and Intangible Asset | ||||
Business Combination, Amortization Expense | $ 0.5 | $ 0.8 | $ 1.3 | $ 2.4 |
Amortization of Intangible Assets, Total | $ 0.2 | $ 0.3 | $ 0.6 | $ 1 |
Indemnification Asset with Re_2
Indemnification Asset with Related Party and Litigation Finance Payable (Details) | Aug. 01, 2022 |
PBM | |
Indemnification Asset with Related Party and Litigation Finance Payable | |
Major stockholder ownership percentage of Liquidia Corporation Common Stock | 9.30% |
Accrued Expenses and Other Cu_3
Accrued Expenses and Other Current Liabilities (Details) - USD ($) $ in Thousands | Sep. 30, 2022 | Dec. 31, 2021 |
Accrued Expenses and Other Current Liabilities | ||
Accrued compensation | $ 2,203 | $ 3,157 |
Accrued research and development expenses | 1,716 | 344 |
Accrued other expenses | 1,305 | 1,670 |
Total accrued expenses and other current liabilities | $ 5,224 | $ 5,171 |
Stockholders' Equity (Details)
Stockholders' Equity (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 9 Months Ended | ||||||||
Apr. 18, 2022 | Apr. 12, 2022 | Mar. 31, 2022 | Apr. 13, 2021 | Nov. 18, 2020 | Jun. 30, 2022 | Jun. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | Feb. 26, 2021 | |
Value of shares sold | $ 54,461 | $ 21,711 | ||||||||
Merger With RareGen LLC | ||||||||||
Number of common shares issued to RareGen's members | 5,550,000 | |||||||||
Merger With RareGen LLC | Holdback Shares | ||||||||||
Number of common shares issued to RareGen's members | 616,666 | |||||||||
A&R SVB Warrants Initial Tranche | ||||||||||
Class of Warrant or Right, Outstanding (in shares) | 250,000 | |||||||||
Class of Warrant or Right, Exercise Price of Warrants or Rights (in dollars per share) | $ 5.14 | |||||||||
SVB Warrant Initial Tranche | ||||||||||
Class of Warrant or Right, Outstanding (in shares) | 100,000 | |||||||||
Class of Warrant or Right, Exercise Price of Warrants or Rights (in dollars per share) | $ 3.05 | $ 3.05 | ||||||||
SVB Warrant - Term B and Term C Tranches | ||||||||||
Class of Warrant or Right, Outstanding (in shares) | 100,000 | |||||||||
Other Warrants | ||||||||||
Class of Warrant or Right, Outstanding (in shares) | 65,572 | |||||||||
Class of Warrant or Right, Exercise Price of Warrants or Rights (in dollars per share) | $ 0.02 | |||||||||
Warrants to Purchase Common Stock | ||||||||||
Class of Warrant or Right, Exercised During Period (in shares) | 0 | 0 | ||||||||
Private Placement | ||||||||||
Stock Issued During Period, Shares, New Issues (in shares) | 8,626,037 | |||||||||
Shares Issued, Price Per Share (in dollars per share) | $ 2.52 | |||||||||
Proceeds from Issuance of Common Stock | $ 21,700 | |||||||||
Underwritten Public Offering | ||||||||||
Stock Issued During Period, Shares, New Issues (in shares) | 11,274,510 | |||||||||
Shares Issued, Price Per Share (in dollars per share) | $ 5.10 | |||||||||
Proceeds from Issuance of Common Stock | $ 54,500 | |||||||||
Underwritten Public Offering | Caligan and Paul B. Manning | ||||||||||
Value of shares sold | $ 11,000 | |||||||||
Underwritten Public Offering | Caligan | ||||||||||
Stock Issued During Period, Shares, New Issues (in shares) | 1,764,705 | |||||||||
Value of shares sold | $ 9,000 | |||||||||
Underwritten Public Offering | Mr. Paul B. Manning | ||||||||||
Stock Issued During Period, Shares, New Issues (in shares) | 392,156 | |||||||||
Value of shares sold | $ 2,000 |
Stock-Based Compensation - Othe
Stock-Based Compensation - Other (Details) - USD ($) | 1 Months Ended | 3 Months Ended | 9 Months Ended | |||||||||
Jun. 16, 2022 | Jan. 01, 2022 | Dec. 31, 2020 | Sep. 30, 2022 | Jun. 30, 2022 | Mar. 31, 2022 | Dec. 31, 2021 | Sep. 30, 2021 | Mar. 31, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | Jan. 25, 2022 | |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Gross (in shares) | 4,485,277 | |||||||||||
Share-based Compensation Arrangements by Share-based Payment Award, Options, Grants in Period, Weighted Average Exercise Price (in dollars per share) | $ 5.22 | |||||||||||
Stock-based compensation expense | $ 1,648,000 | $ 1,224,000 | $ 7,480 | $ 2,922 | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercises in Period (in shares) | 193,331 | |||||||||||
Restricted Stock Units (RSUs) | ||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Grants in Period (in shares) | 503,403 | |||||||||||
Vested (in shares) | 36,688 | |||||||||||
Quarterly Bonus | ||||||||||||
Stock-based compensation expense | $ 56,000 | |||||||||||
Bonus Payable | $ 0 | |||||||||||
Common Stock | ||||||||||||
Total shares issued | 46,924 | 5,017 | ||||||||||
Share Price (in dollars per share) | $ 5.44 | $ 5.44 | ||||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercises in Period (in shares) | 49,440 | 364 | 143,048 | 281 | ||||||||
Chief Executive Officer | ||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Gross (in shares) | 2,000,000 | |||||||||||
Share-based Compensation Arrangements by Share-based Payment Award, Options, Grants in Period, Weighted Average Exercise Price (in dollars per share) | $ 3 | |||||||||||
Chief Executive Officer | Stock Options | ||||||||||||
Modified stock-based compensation | $ 2,900,000 | |||||||||||
Chief Executive Officer | Second Tranche Option | ||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Gross (in shares) | 931,745 | |||||||||||
Percent of Shares Vested and Exercisable on Closing Date of Change in Control | 100% | |||||||||||
Chief Executive Officer | Share-based Payment Arrangement, Tranche One | Restricted Stock Units (RSUs) | ||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Grants in Period (in shares) | 63,230 | |||||||||||
Chief Executive Officer | Share-based Payment Arrangement, Tranche One | Stock Options | ||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Vested, Number of Shares | 1,375,000 | |||||||||||
Chief Executive Officer | Share-based Payment Arrangement, Tranche One | Second Tranche Option | ||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Rights, Percentage | 25% | |||||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Period | 36 months | |||||||||||
Chief Executive Officer | Share-based Payment Arrangement, Tranche Two | Restricted Stock Units (RSUs) | ||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Period | 4 years | |||||||||||
Vested (in shares) | 346,339 | |||||||||||
Dr Saggar | Restricted Stock Units (RSUs) | ||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Grants in Period (in shares) | 93,834 | |||||||||||
Dr Saggar | Share-based Payment Arrangement, Tranche One | Restricted Stock Units (RSUs) | ||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Rights, Percentage | 50% | |||||||||||
The 2020 Plan | ||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Percent Annual Increase in Capital Shares Reserved for Future Issuance | 4% | |||||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Number of Additional Shares Authorized (in shares) | 1,600,000 | 2,091,509 | ||||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Available for Grant (in shares) | 232,678 | 232,678 | ||||||||||
Inducement Plan 2022 | ||||||||||||
Common Stock, Capital Shares Reserved for Future Issuance (in shares) | 10,800 | 10,800 | 310,000 | |||||||||
Employee Stock Purchase Plan | ||||||||||||
Common Stock, Capital Shares Reserved for Future Issuance (in shares) | 150,000 | 548,059 | 548,059 | |||||||||
Total shares issued | 46,924 | 51,941 | ||||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Purchase Price of Common Stock, Percent | 85% | |||||||||||
Prior Equity Award Plans | ||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Available for Grant (in shares) | 676,629 | 676,629 |
Stock-Based Compensation - Stoc
Stock-Based Compensation - Stock-based Compensation Expense (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Stock-based compensation expense | $ 1,648,000 | $ 1,224,000 | $ 7,480 | $ 2,922 |
Research and Development Expense | ||||
Stock-based compensation expense | 323,000 | 288,000 | 1,043 | 817 |
General and Administrative Expense | ||||
Stock-based compensation expense | $ 1,325,000 | $ 936,000 | $ 6,437 | $ 2,105 |
Stock-Based Compensation - Unam
Stock-Based Compensation - Unamortized Compensation Expense (Details) $ in Thousands | 9 Months Ended |
Sep. 30, 2022 USD ($) | |
Stock Options | |
Stock-based awards, unamortized expense | $ 17,046 |
Stock-based awards, weighted average remaining recognition period (Year) | 3 years 1 month 6 days |
Restricted Stock Units (RSUs) | |
Stock-based awards, unamortized expense | $ 1,974 |
Stock-based awards, weighted average remaining recognition period (Year) | 3 years |
Stock-Based Compensation - Fair
Stock-Based Compensation - Fair Value of Stock Options Granted and Purchase Rights Issued under the ESPP (Details) - $ / shares | 9 Months Ended | |
Sep. 30, 2022 | Sep. 30, 2021 | |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Weighted Average Grant Date Fair Value (in dollars per share) | $ 4.11 | $ 2.02 |
Employee Stock Purchase Plan | Stock Options | ||
Expected dividend yield | ||
Risk-free interest rate, minimum | 1.46% | 0.62% |
Risk-free interest rate, maximum | 3.34% | 1.67% |
Expected Volatility, minimum | 90% | 91% |
Expected Volatility, maximum | 95% | 96% |
Employee Stock Purchase Plan | Stock Options | Minimum | ||
Expected life (years) | 5 years 9 months 18 days | 5 years 2 months 12 days |
Employee Stock Purchase Plan | Stock Options | Maximum | ||
Expected life (years) | 6 years 1 month 6 days | 6 years 1 month 6 days |
Employee Stock Purchase Plan | Employee Purchase Rights | ||
Expected dividend yield | ||
Risk-free interest rate, minimum | 0.69% | |
Risk-free interest rate, maximum | 3.92% | |
Expected Volatility, minimum | 80% | |
Expected Volatility, maximum | 129% | |
Expected life (years) | 6 months |
Stock-Based Compensation - St_2
Stock-Based Compensation - Stock Option Activity (Details) - USD ($) $ / shares in Units, $ in Thousands | 9 Months Ended |
Sep. 30, 2022 | |
Stock-Based Compensation. | |
Outstanding, number of shares (in shares) | 5,598,009 |
Outstanding, weighted average exercise price (in dollars per share) | $ 4.19 |
Granted, number of shares (in shares) | 4,485,277 |
Granted, weighted average exercise price (in dollars per share) | $ 5.22 |
Exercised, number of shares (in shares) | (193,331) |
Exercised, weighted average exercise price (in dollars per share) | $ 3.81 |
Cancelled, number of shares (in shares) | (1,413,738) |
Cancelled, weighted average exercise price (in dollars per share) | $ 5.79 |
Outstanding, number of shares (in shares) | 8,476,217 |
Outstanding, weighted average exercise price (in dollars per share) | $ 4.48 |
Outstanding, weighted average contractual term (Year) | 8 years 8 months 12 days |
Outstanding, aggregate intrinsic value | $ 10,903 |
Exercisable, number of shares (in shares) | 3,178,296 |
Exercisable, weighted average exercise price (in dollars per share) | $ 3.99 |
Exercisable, weighted average contractual term (Year) | 7 years 10 months 24 days |
Exercisable, aggregate intrinsic value | $ 6,622 |
Vested and expected to vest, number of shares (in shares) | 7,887,409 |
Vested and expected to vest, weighted average exercise price (in dollars per share) | $ 4.46 |
Vested and expected to vest, weighted average contractual term (Year) | 8 years 8 months 12 days |
Vested and expected to vest, aggregate intrinsic value | $ 10,394 |
Stock-Based Compensation - Rest
Stock-Based Compensation - Restricted Stock Units (Details) - Restricted Stock Units (RSUs) | 9 Months Ended |
Sep. 30, 2022 $ / shares shares | |
Nonvested, number (in shares) | shares | 15,204 |
Nonvested , weighted average grant date fair value (in dollars per share) | $ / shares | $ 3.31 |
Granted, number (in shares) | shares | 503,403 |
Granted , weighted average grant date fair value (in dollars per share) | $ / shares | $ 5.64 |
Vested , number (in shares) | shares | (36,688) |
Vested , weighted average grant date fair value (in dollars per share) | $ / shares | $ 4.89 |
Forfeited, number (in shares) | shares | (53,350) |
Forfeited , weighted average grant date fair value (in dollars per share) | $ / shares | $ 6.25 |
Nonvested , number (in shares) | shares | 428,569 |
Nonvested , weighted average grant date fair value (in dollars per share) | $ / shares | $ 5.55 |
Revenue From Contracts With C_2
Revenue From Contracts With Customers (Details) - Sandoz - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | |
Aug. 01, 2018 | Sep. 30, 2022 | Sep. 30, 2022 | |
Promotion Agreement, Payment | $ 20 | ||
Percentage of Revenue from Promotion Agreement | 97% | 98% | |
Contract with Customer, Refund Liability | $ 0.5 | $ 0.5 |
Leases - Other (Details)
Leases - Other (Details) - ft² | Sep. 30, 2022 | Feb. 28, 2021 | Jan. 31, 2021 |
Leases | |||
Lessee, Finance Lease, Discount Rate | 6.50% | 7.50% | |
Minimum | |||
Leases | |||
Lessee, Finance Lease, Remaining Lease Term | 24 months | ||
Maximum | |||
Leases | |||
Lessee, Finance Lease, Remaining Lease Term | 48 months | ||
Primary Building in Morrisville, North Carolina | |||
Leases | |||
Area of Real Estate Property (Square Foot) | 45,000 |
Leases - Cost (Details)
Leases - Cost (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Leases | ||||
Total Lease Cost | $ 233 | $ 250 | $ 716 | $ 844 |
Research and Development Expense | ||||
Leases | ||||
Fixed lease cost | 176 | 176 | 527 | 527 |
Amortization of lease assets | 31 | 42 | 105 | 227 |
General and Administrative Expense | ||||
Leases | ||||
Fixed lease cost | 19 | 19 | 58 | 58 |
Interest Expense | ||||
Leases | ||||
Interest on lease liabilities | $ 7 | $ 13 | $ 26 | $ 32 |
Leases - Remaining Lease Term a
Leases - Remaining Lease Term and Discount Rates (Details) | Sep. 30, 2022 |
Leases | |
Weighted average remaining lease term, Operating leases | 4 years 1 month 6 days |
Weighted average remaining lease term, Finance leases | 2 years |
Weighted average discount rate, Operating leases | 10.30% |
Weighted average discount rate, Finance leases | 6.50% |
Leases - Future Minimum Lease P
Leases - Future Minimum Lease Payments (Details) $ in Thousands | Sep. 30, 2022 USD ($) |
Operating Leases | |
2022 (three months remaining) | $ 315 |
2023 | 1,283 |
2024 | 1,317 |
2025 | 1,356 |
2026 | 1,158 |
Total minimum lease payments | 5,429 |
Less: Interest | (992) |
Present value of lease liabilities | 4,437 |
Finance Leases | |
2022 (three months remaining) | 82 |
2023 | 195 |
2024 | 115 |
2025 | 64 |
2026 | 0 |
Total minimum lease payments | 456 |
Less: Interest | (28) |
Present value of lease liabilities | 428 |
Total | |
2022 (three months remaining) | 397 |
2023 | 1,478 |
2024 | 1,432 |
2025 | 1,420 |
2026 | 1,158 |
Total minimum lease payments | 5,885 |
Less: Interest | (1,020) |
Present value of lease liabilities | $ 4,865 |
Long-term Debt - Summary (Detai
Long-term Debt - Summary (Details) - USD ($) $ in Thousands | Sep. 30, 2022 | Dec. 31, 2021 |
Long-Term Debt | ||
Long-term debt | $ 19,741 | $ 10,410 |
A&R Silicon Valley Bank Term Loan | ||
Long-Term Debt | ||
Long-term debt | $ 19,741 | |
Silicon Valley Bank Term Loan | ||
Long-Term Debt | ||
Long-term debt | $ 10,410 |
Long-term Debt - Terms (Details
Long-term Debt - Terms (Details) $ / shares in Units, $ in Thousands | 3 Months Ended | 9 Months Ended | ||||||
Jan. 07, 2022 USD ($) tranche $ / shares shares | Mar. 01, 2021 USD ($) | Feb. 26, 2021 USD ($) $ / shares shares | Mar. 31, 2022 USD ($) | Mar. 31, 2021 USD ($) | Sep. 30, 2022 USD ($) $ / shares shares | Sep. 30, 2021 USD ($) | Dec. 31, 2021 USD ($) | |
Long-Term Debt | ||||||||
Loss on extinguishment of debt | $ 997 | $ 53 | ||||||
Repayments of debt | 10,500 | 10,353 | ||||||
Long-term Debt, Gross | 20,000 | |||||||
Warrants included in additional paid-in capital | $ 1,317 | $ 261 | ||||||
Long-term debt, noncurrent | $ 19,741 | $ 10,410 | ||||||
A&R SVB Warrants | ||||||||
Long-Term Debt | ||||||||
Warrants included in additional paid-in capital | $ 1,300 | |||||||
Gain (loss) extinguishment component | 700 | |||||||
Debt discount | $ 600 | |||||||
A&R SVB Warrants | SVB | ||||||||
Long-Term Debt | ||||||||
Class of Warrant or Right, Number of Securities Called by Warrants or Rights (in shares) | shares | 250,000 | |||||||
Class of Warrant or Right, Exercise Price of Warrants or Rights (in dollars per share) | $ / shares | $ 5.14 | |||||||
A&R SVB Warrants | Maximum | SVB | ||||||||
Long-Term Debt | ||||||||
Class of Warrant or Right, Additional Warrants Issued Under Loan Agreement | shares | 100,000 | |||||||
SVB Warrant | ||||||||
Long-Term Debt | ||||||||
Class of Warrant or Right, Number of Securities Called by Warrants or Rights (in shares) | shares | 200,000 | |||||||
SVB Warrant Initial Tranche | ||||||||
Long-Term Debt | ||||||||
Class of Warrant or Right, Number of Securities Vested (in shares) | shares | 100,000 | |||||||
Class of Warrant or Right, Exercise Price of Warrants or Rights (in dollars per share) | $ / shares | $ 3.05 | $ 3.05 | ||||||
Class of Warrant or Right, Outstanding (in shares) | shares | 100,000 | |||||||
SVB Warrant Term B and Term C Tranche | ||||||||
Long-Term Debt | ||||||||
Class of Warrant or Right, Outstanding (in shares) | shares | 100,000 | |||||||
A&R Silicon Valley Bank Term Loan | Maximum | ||||||||
Long-Term Debt | ||||||||
Debt Issuance Costs, Noncurrent, Net | $ 100 | |||||||
Pacific Western Bank Term Loan | ||||||||
Long-Term Debt | ||||||||
Repayments of Debt | $ 9,400 | |||||||
Pacific Western Bank Term Loan | Maximum | ||||||||
Long-Term Debt | ||||||||
Loss on extinguishment of debt | $ 100 | |||||||
Loan and Security Agreement with SVB | ||||||||
Long-Term Debt | ||||||||
Loss on extinguishment of debt | 1,000 | |||||||
Repayments of debt | 10,500 | |||||||
Silicon Valley Bank Term Loan | ||||||||
Long-Term Debt | ||||||||
Maximum Borrowing Capacity | $ 20,500 | |||||||
Long-term debt, noncurrent | $ 19,400 | |||||||
Term A Loan | ||||||||
Long-Term Debt | ||||||||
Debt Instrument, Face Amount | $ 10,500 | |||||||
Amended and Restated Loan and Security Agreement | ||||||||
Long-Term Debt | ||||||||
Debt Instrument, Final Payment Fees, Percentage | 5% | |||||||
Debt instrument, final payment | $ 185,000 | |||||||
A&R Silicon Valley Bank Term Loan | ||||||||
Long-Term Debt | ||||||||
Maximum Borrowing Capacity | $ 40,000 | |||||||
Number of Tranches in Debt Facility | tranche | 3 | |||||||
Interest rate threshold used in determining the floating interest rate at which interest accrues on the debt instrument | 7.25% | |||||||
Prime interest rate threshold used in determining the floating interest rate at which interest accrues on the debt instrument | 4% | |||||||
Amended and Restated Loan and Security Agreement Tranche One | ||||||||
Long-Term Debt | ||||||||
Proceeds from Lines of Credit | $ 20,000 | |||||||
Line of Credit Facility, Additional Borrowing Capacity | 5,000 | |||||||
Amended and Restated Loan and Security Agreement Tranche Two | ||||||||
Long-Term Debt | ||||||||
Maximum Borrowing Capacity | 7,500 | |||||||
Amended and Restated Loan and Security Agreement Tranche Three | ||||||||
Long-Term Debt | ||||||||
Maximum Borrowing Capacity | $ 7,500 | |||||||
Line of Credit Facility, Trailing Sales Period | 6 months | |||||||
Amount of net product sales required to be generated to trigger additional borrowing capacity | $ 27,500 |
Long-term Debt - SVB Warrant Fa
Long-term Debt - SVB Warrant Fair Value (Details) | Sep. 30, 2022 USD ($) Y |
A&R SVB Warrants | Measurement Input, Risk Free Interest Rate | |
Long-Term Debt, Fair Value of Warrant | |
Warrants and Rights Outstanding, Measurement Input | 0.0176 |
A&R SVB Warrants | Measurement Input, Price Volatility | |
Long-Term Debt, Fair Value of Warrant | |
Warrants and Rights Outstanding, Measurement Input | 0.972 |
A&R SVB Warrants | Measurement Input, Expected Life | |
Long-Term Debt, Fair Value of Warrant | |
Warrants and Rights Outstanding, Measurement Input | Y | 10 |
SVB Warrant | Measurement Input, Risk Free Interest Rate | |
Long-Term Debt, Fair Value of Warrant | |
Warrants and Rights Outstanding, Measurement Input | $ | 0.0143 |
SVB Warrant | Measurement Input, Price Volatility | |
Long-Term Debt, Fair Value of Warrant | |
Warrants and Rights Outstanding, Measurement Input | $ | 0.908 |
SVB Warrant | Measurement Input, Expected Life | |
Long-Term Debt, Fair Value of Warrant | |
Warrants and Rights Outstanding, Measurement Input | Y | 10 |
Long-term Debt - Maturities (De
Long-term Debt - Maturities (Details) - USD ($) $ in Thousands | Sep. 30, 2022 | Dec. 31, 2021 |
Scheduled annual maturities of long-term debt | ||
2022 (three months remaining) | ||
2023 | ||
2024 | 10,000 | |
2025 | 10,000 | |
Total | 20,000 | |
Less: Unamortized discount, debt issuance costs and accretion | (259) | |
Long-term debt, noncurrent | $ 19,741 | $ 10,410 |
Commitments and Contingencies (
Commitments and Contingencies (Details) $ in Thousands | Nov. 06, 2020 USD ($) |
Liquidia PAH and Sandoz | UTC and Smiths Medical Litigation | |
Commitments and Contingencies | |
Proceeds from Legal Settlements | $ 4,250 |