UNITED STATES
`SECURITIES AND EXCHANGE COMMISSION
`Washington, D.C. 20549
`
`FORM 10-K
`
`(Mark One)
`☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
`For the fiscal year ended December 31, 2019
`
`☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
`For the transition period from to
`
`or
`
`Commission File Number: 001-38601
`LIQUIDIA TECHNOLOGIES, INC.
`(Exact Name of Registrant as Specified in Its Charter)
`
`Delaware
`(State or Other Jurisdiction of Incorporation or Organization)
`
`20-1926605
`(I.R.S. Employer Identification No.)
`
`419 Davis Drive, Suite 100
`Morrisville, North Carolina
`(Address of Principal Executive Offices)
`
`27560
`(Zip Code)
`
`Registrant’s telephone number, including area code: (919) 328-4400
`
` Securities registered pursuant to Section 12(b) of the Act:
`
`Title of each class
`Common stock, $0.001 par value per share
`
`Trading Symbol(s)
`LQDA
`
`Name of each exchange on which registered
`The Nasdaq Stock Market LLC
`
`Securities registered pursuant to Section 12(g) of the Act: None
`
`Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ☐ No ☒
`
`Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Act. Yes ☐ No ☒
`
`Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934
`during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing
`requirements for the past 90 days. Yes ☒ No ☐
`
`Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of
`Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).
`Yes ☒ No ☐
`
`Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an
`emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth
`company” in Rule 12b-2 of the Exchange Act.
`Large Accelerated Filer ☐
`Accelerated Filer ☒
`
`Non-accelerated Filer ☐
`
`Smaller Reporting Company ☒
`Emerging Growth Company ☒
`
`If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or
`revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act ☒
`
`Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes ☐ No ☒
`
`The aggregate market value of common stock held by non-affiliates of the registrant on June 28, 2019, which was the last business day of the registrant’s
`most recently completed second fiscal quarter, was $107,845,184 based on a $8.00 closing price per share as reported on the Nasdaq Capital Market.
`
`As of March 9, 2020, there were 28,368,464 shares of the registrant’s common stock outstanding.
`
`DOCUMENTS INCORPORATED BY REFERENCE
`
`Portions of the Liquidia Technologies, Inc. Definitive Proxy Statement with respect to the 2020 Annual Meeting of Stockholders to be filed pursuant to
`Regulation 14A within 120 days after the end of the fiscal year ended December 31, 2019 are incorporated by reference into Part III of this Annual Report
`on Form 10-K to the extent stated therein. Except with respect to information specifically incorporated by reference in the Form 10-K, each document
`incorporated by reference herein is deemed not to be filed as part hereof.
`
`IPR2021-00406
`United Therapeutics EX2089
`Page 1 of 260
`
`

`

`LIQUIDIA TECHNOLOGIES, INC.
`
`PART I
`
`Item 1.
`
`Business
`
`Item 1A.
`
`Risk Factors
`
`Item 1B.
`
`Unresolved Staff Comments
`
`Item 2.
`
`Item 3.
`
`Item 4.
`
`PART II
`
`Item 5.
`
`Item 6.
`
`Item 7.
`
`Properties
`
`Legal Proceedings
`
`Mine Safety Disclosures
`
`Market For Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities
`
`Selected Financial Data
`
`Management’s Discussion and Analysis of Financial Condition and Results of Operations
`
`Item 7A.
`
`Quantitative and Qualitative Disclosures About Market Risk
`
`Item 8.
`
`Item 9.
`
`Financial Statements and Supplementary Data
`
`Changes in and Disagreements With Accountants on Accounting and Financial Disclosure
`
`Item 9A.
`
`Controls and Procedures
`
`Item 9B.
`
`Other Information
`
`PART III
`
`Item 10.
`
`Directors, Executive Officers and Corporate Governance
`
`Item 11.
`
`Executive Compensation
`
`Item 12.
`
`Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters
`
`Item 13.
`
`Certain Relationships and Related Transactions, and Director Independence
`
`Item 14.
`
`Principal Accounting Fees and Services
`
`PART IV
`
`Item 15.
`
`Exhibits and Financial Statement Schedules
`
`Item 16.
`
`Form 10-K Summary
`
`3
`
`3
`
`49
`
`91
`
`91
`
`92
`
`92
`
`93
`
`93
`
`94
`
`95
`
`111
`
`111
`
`111
`
`111
`
`113
`
`114
`
`114
`
`114
`
`114
`
`114
`
`115
`
`116
`
`116
`
`118
`
`Page 2 of 260
`
`

`

`This annual report on Form 10-K includes our trademarks, trade names and service marks, such as Liquidia, the Liquidia logo and PRINT, or Particle
`Replication In Non-wetting Templates, which are protected under applicable intellectual property laws and are the property of Liquidia Technologies, Inc.
`This annual report also contains trademarks, trade names and service marks of other companies, which are the property of their respective owners. Solely
`for convenience, trademarks, trade names and service marks referred to in this annual report may appear without the ®, ™ or SM symbols, but such
`references are not intended to indicate, in any way, that we will not assert, to the fullest extent under applicable law, our rights or the right of the applicable
`licensor to these trademarks, trade names and service marks. We do not intend our use or display of other parties’ trademarks, trade names or service marks
`to imply, and such use or display should not be construed to imply, a relationship with, or endorsement or sponsorship of us by, these other parties.
`
`Page 3 of 260
`
`

`

`Cautionary Note Regarding Forward-Looking Statements
`
`This annual report on Form 10-K contains forward-looking statements. All statements other than statements of historical facts contained in this annual
`report may be forward-looking statements. The forward-looking statements are contained principally in the sections entitled “Risk Factors,” and
`“Management’s Discussion and Analysis of Financial Condition and Results of Operations”, but are also contained elsewhere in this annual report. In some
`cases, you can identify forward-looking statements by terms such as “may,” “might,” “will,” “should,” “expects,” “plans,” “anticipates,” “could,” “would,”
`“intends,” “targets,” “projects,” “contemplates,” “believes,” “estimates,” “predicts,” “potential” or “continue” or the negative of these terms or other similar
`expressions. Forward-looking statements involve known and unknown risks, uncertainties and other important factors that may cause our actual results,
`performance or achievements to be materially different from any future results, performance or achievements expressed or implied by the forward-looking
`statements. Forward-looking statements include, but are not limited to, statements about:
`
`● our plans to develop and commercialize our product candidates;
`
`● our planned clinical trials for our product candidates;
`
`● the timing of the availability of data from our clinical trial;
`
`● the timing of our planned regulatory filings;
`
`● the timing of and our ability to obtain and maintain regulatory approvals for our product candidates, including the January 2020 filing of the New
`Drug Application, or NDA, for LIQ861 or U.S. Food and Drug Administration, or FDA, acceptance of the NDA submission and potential approval
`thereof;
`
`● our ability to execute on our strategic or financial initiatives;
`
`● the clinical utility of our product candidates and their potential advantages compared to other treatments;
`
`● our commercialization, marketing and distribution capabilities and strategy;
`
`● our ability to establish and maintain arrangements for the manufacture of our product candidates and the sufficiency of our current manufacturing
`facilities to produce development and commercial quantities of our product candidates;
`
`● our ability to establish and maintain collaborations;
`
`● our estimates regarding the market opportunities for our product candidates;
`
`● our intellectual property position and the duration of our patent rights;
`
`● our estimates regarding future expenses, capital requirements and needs for additional financing; and
`
`● our expected use of proceeds from prior public offerings and the period over which such proceeds, together with cash, will be sufficient to meet our
`operating needs.
`
`You should refer to the “Risk Factors” section of this annual report for a discussion of important factors that may cause our actual results to differ materially
`from those expressed or implied by our forward-looking statements. The forward-looking statements in this annual report are only predictions, and we may
`not actually achieve the plans, intentions or expectations included in our forward-looking statements. We have based these forward-looking statements
`largely on our current expectations and projections about future events and financial trends that we believe may affect our business, financial condition and
`results of operations. Because forward-looking statements are inherently subject to risks and uncertainties, some of which cannot be predicted or quantified,
`you should not rely on these forward-looking statements as predictions of future events. The events and circumstances reflected in our forward-looking
`statements may not be achieved or occur and actual results could differ materially from those projected in the forward-looking statements.
`
`1
`
`Page 4 of 260
`
`

`

`
`
`These forward-looking statements speak only as of the date of this annual report. While we may elect to update these forward-looking statements at some
`point in the future, we have no current intention of doing so except to the extent required by applicable law. You should therefore not rely on these forward-
`looking statements as representing our views as of any date subsequent to the date of this annual report on Form 10-K.
`
`Unless the context otherwise requires, references in this annual report to “we,” “us”, “our” and the “Company” refer to Liquidia Technologies, Inc., a
`Delaware corporation.
`
`
`2
`
`Page 5 of 260
`
`

`

`
`
`
`3
`
`PART I
`
`
`Item 1. Business.
`
`Overview
`
`We are a late-stage clinical biopharmaceutical company focused on the development and commercialization of novel products utilizing our proprietary
`PRINT® technology to transform the lives of patients. PRINT is a particle engineering platform that enables precise production of uniform drug particles
`designed to improve the safety, efficacy and performance of a wide range of therapies. We are currently focused on the development of two product
`candidates for which we hold worldwide commercial rights: LIQ861 for the treatment of pulmonary arterial hypertension, or PAH, and LIQ865 for the
`treatment of local post-operative pain. LIQ861, for which we recently filed a New Drug Application, or NDA, with the FDA, 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. We have applied our PRINT technology to enable us to deliver LIQ861 through a convenient, palm-sized dry powder inhaler, or
`DPI. We have also applied our PRINT technology to our second product candidate, LIQ865, for which we have completed two Phase 1 clinical trials and
`have initiated Phase 2-enabling toxicology studies. LIQ865 is designed to deliver sustained-release particles of bupivacaine, a non-opioid anesthetic, to treat
`local post-operative pain for three to five days through a single administration. Additionally, we recently initiated a pre-clinical program to develop an
`inhaled product leveraging the benefits of our PRINT technology to engineer particles with precise, uniform, aerodynamic size and shape for deep lung
`delivery.
`
`LIQ861 for Pulmonary Arterial Hypertension
`
`In January 2020, we submitted an NDA to the FDA for LIQ861, our lead product candidate, as a potential treatment for patients with PAH. Treprostinil is a
`synthetic analog of prostacyclin, a vasoactive mediator essential to normal lung function, which is deficient in patients with PAH. We believe that LIQ861
`has the potential to improve the therapeutic profile of existing formulations of treprostinil by enhancing deep-lung delivery and achieving higher dose levels
`than current inhaled therapies. We are developing LIQ861 under the 505(b)(2) regulatory pathway with Tyvaso® (treprostinil, inhaled solution) as the
`reference listed drug, which allows us to rely in part on the FDA’s previous findings of efficacy and safety of Tyvaso and the active ingredient treprostinil,
`which has been approved in four different products administered through the oral, inhaled and continuous infusion (parenteral) routes.
`
`PAH is a chronic, progressive disease caused by the hardening and narrowing of the pulmonary arteries that can lead to right heart failure and eventually
`death. Treprostinil is a synthetic analog of prostacyclin, a vasoactive mediator essential to normal lung function that is deficient in patients with PAH. PAH
`is a rare disease, with an estimated prevalence in the United States of approximately 30,000 patients. An independent industry research firm estimated that
`in 2019 products containing treprostinil across its three routes of administration (oral, inhaled and parenteral infusion) may generate revenue that represents
`about one-quarter of the approximately $3.5 billion U.S. market for pulmonary hypertension drug therapies. The inhaled route of administration, in which
`medication is inhaled directly into the lungs, helps minimize the off-tissue adverse side effects of systemic delivery. Tyvaso, marketed by
`United Therapeutics in the United States, is the standard of care among the inhaled therapies, with more than 80% of inhaled prostacyclin sales in the
`United States. Current inhaled therapies, including Tyvaso, are delivered by a nebulizer, a device that converts a liquid formulation into mist, and require
`between four and nine doses per day. Nebulizers require regular care and maintenance, including daily cleaning and access to additional parts and supplies,
`such as distilled water and a power source, all of which compromise the portability of the device and the quality of life of patients.
`
`We believe LIQ861, if approved, will be the first-to-market inhaled dry powder treprostinil that can be delivered using a convenient, palm-sized DPI. We
`further believe that LIQ861 can overcome the limitations of current inhaled therapies and has the potential to maximize the therapeutic benefits of
`treprostinil in treating PAH by safely delivering higher doses into the lungs. Based on our in vitro studies we believe that the precise size, trefoil-like shape
`and uniformity of each LIQ861 particle may provide deep-lung delivery of treprostinil and may reduce deposition in the upper airway where irritation and
`pain have been observed with nebulized treprostinil.
`
`
`Page 6 of 260
`
`

`

`
`
`In August 2019, we completed an open-label Phase 3 clinical trial, INSPIRE, or Investigation of the Safety and Pharmacology of Dry Powder Inhalation of
`Treprostinil, for LIQ861. The primary objective of the INSPIRE study was to evaluate the long-term safety and tolerability of LIQ861. The study was
`designed to evaluate patients who have either been under stable treatment with Tyvaso (nebulizer-delivered treprostinil), for at least three months and were
`transitioned to LIQ861 under the protocol, or Transition patients, or patients who had been under stable treatment with no more than two non-prostacyclin
`oral PAH therapies for at least three months and then had their treatment regimen supplemented with LIQ861 under the protocol, or Add-On patients.
`Within the INSPIRE study, 18 Transition patients were evaluated in a one-directional crossover sub-study comparing bioavailability and pharmacokinetics,
`or PK, of treprostinil following dosing of LIQ861 as compared with Tyvaso.
`
`In March 2019, we reported that we had completed enrollment and met the primary endpoint, which was long-term safety and tolerability, in our INSPIRE
`trial. LIQ861 was observed to be well-tolerated in 109 patients, with 101 patients (93%) completing at least two months of treatment. During the two-month
`period, LIQ861 was evaluated at doses up to 159 mcg (clinical trial nomenclature of 150 mcg capsule strength) with no study-drug related serious adverse
`events. Dosing has exceeded 159 mcg in some patients receiving drug beyond the Month 2 time point. We have not yet determined a maximum tolerated
`dose of LIQ861. We also reported fully enrolling our one-directional crossover sub-study comparing bioavailability and PK of treprostinil as sub-study
`patients transitioned from Tyvaso to LIQ861.
`
`In April 2019, we reported further data from these 109 patients in our INSPIRE trial on exploratory endpoints at two months of treatment that demonstrated
`generally favorable results with respect to six-minute walk distance and quality of life as indicated by the Minnesota Living with Heart Failure
`Questionnaire, or MLHFQ. In May 2019, we reported further presentation of this data at the American Thoracic Society, or ATS, International Conference
`2019.
`
`In June 2019, we reported results from the INSPIRE study indicating that the 79.5 mcg dose of LIQ861 (clinical trial nomenclature of 75 mcg capsule
`strength) correlates with nine breaths of Tyvaso, the maximum recommended label dose of Tyvaso. Analysis of the data from the PK sub-study in patients
`showed variability in systemic plasma levels of both LIQ861 and Tyvaso, which is believed to be attributed to variation in severity of disease and has been
`seen in prior studies of treprostinil in patients. To more accurately characterize the PK of LIQ861, we conducted two additional PK studies in healthy
`volunteers. In the first of these studies, we observed unexpected variability in PK levels. Post-hoc analysis showed that plasma levels of treprostinil were
`tightly correlated to the LIQ861 dose delivered. Based upon additional non-clinical and clinical work, we believe the unexpected variability seen in this
`healthy volunteer study was due to an administration technique unique to the conduct of the study in the Phase 1 setting. In August 2019, we completed a
`second PK study in healthy volunteers in which the proper administration technique was followed. This study demonstrated significantly reduced variability,
`and we believe we have established comparative bioavailability to the reference listed drug.
`
`Final enrollment in the pivotal INSPIRE trial included 121 PAH patients to assess safety and tolerability through Month 2, the primary endpoint of the trial.
`Of the 121 patients enrolled in the study, 55 were Transition patients and 66 were Add-On patients. Add-On patients started on a dose of 26.5 mcg of
`LIQ861 (clinical trial nomenclature of 25 mcg capsule strength), with most (>80%) titrating to a 79.5 mcg dose or higher within the first two months of
`treatment. Consistent with preliminary data presented in the second quarter of 2019, LIQ861 was observed to be well-tolerated and treatment-emergent
`adverse events were mostly mild to moderate in nature at Month 2 up to doses of 159 mcg of LIQ861, the highest dose studied at Month 2. Durability of
`therapy with LIQ861 appeared to be favorable, with 96% of Transition patients and 91% of Add-On patients remaining on study drug at the Month 2
`timepoint.
`
`Initial analysis of the exploratory endpoints from the INSPIRE study indicates that LIQ861 may provide functional and quality-of-life benefits to PAH
`patients in New York Heart Association, or NYHA, functional classes II and III. More than 90% of all patients who completed two months of treatment
`maintained or improved their NYHA functional class. Additionally, we observed improvement in six-minute-walk-distance and quality of life as measured
`by the MLHFQ in both patient groups.
`
`We continued to treat patients who chose to remain on LIQ861 beyond the Month 2 timepoint of the primary endpoint. More than 80% of INSPIRE patients
`remained on study drug at Month 4 with no significant changes in safety or tolerability observed compared to Month 2. At the completion of the INSPIRE
`study, the patient with the longest duration of treatment had been on LIQ861 therapy for 18 months. To provide for continuity of treatment, patients from
`INSPIRE were provided the opportunity to continue receiving treatment in an extension study, which is currently ongoing. In addition, we are enrolling
`patients in a clinical study at certain investigational sites in Europe to characterize the hemodynamic dose-response relationship to LIQ861. We are also
`considering conducting other clinical trials to generate additional data on LIQ861, including a clinical trial in pediatric patients. We also continue to conduct
`development work in support of potential approval and commercialization of LIQ861, including label and patient-use assessments.
`
`
`4
`
`Page 7 of 260
`
`

`

`
`
`LIQ865 for Post-Operative Pain
`
`LIQ865 is our proprietary injectable, sustained-release formulation of bupivacaine, a non-opioid pain medication. We have engineered the size and
`composition of the LIQ865 PRINT particles to release bupivacaine over three to five days through a single administration for the management of local post-
`operative pain after a surgical procedure. We completed a Phase 1a clinical trial of LIQ865 in Denmark in 2017 and a Phase 1b clinical trial in the
`United States in 2018. We initiated Phase 2-enabling toxicology studies in 2019 to assess LIQ865 in multiple non-clinical tissue models. Results from a
`study to assess incision tensile strength after healing were acceptable and not statistically different from controls. A nonclinical study to examine soft tissue
`healing was also completed, and the results were acceptable and comparable to vehicle-treated, saline-treated, and Marcaine-treated sites. We believe this
`data supports progression to Phase 2 hernia repair studies. In a study to assess bone fracture healing, we observed dose-dependent delayed healing at the two
`LIQ865 doses studied; however, there were no adverse effects noted on surrounding soft tissues. Additional studies have been initiated with lower doses of
`LIQ865 to determine a no adverse effect level, or NOAEL, on bone healing. We will review the results from these toxicology studies, and if supportive, we
`intend to initiate Phase 2 proof-of-concept clinical trials, subject to availability of capital and other factors, during 2021. We believe LIQ865, if successfully
`developed and approved, has the potential to provide significantly longer local post-operative pain relief compared to currently marketed formulations of
`bupivacaine.
`
`We estimate that there were over 40 million surgeries in our target market, which consists of orthopedic and soft tissue surgeries, performed in the
`United States in 2016. According to IMS Health, an independent market research firm, the global market for local anesthetics was approximately
`$761.1 million in 2017. Despite current pain-management protocols, post-operative pain is still undermanaged, with studies showing that approximately
`50% of patients self-report inadequate pain relief. Post-operative pain management is becoming more important as surgeries increase in volume and
`complexity and hospitals seek treatments that support faster recovery and time to discharge. Concurrently, the risk of opioid abuse and diversion has led
`physicians, payors and the U.S. federal government to prioritize pain management strategies that minimize reliance on opioids. Local anesthetics, such as
`bupivacaine, provide a well-established, non-opioid option for post-operative pain management, but their duration of efficacy has been limited to
`eight hours or less. The FDA has approved one long-acting local anesthetic, liposomal bupivacaine, but pain relief typically lasts only 24 to 36 hours,
`according to physicians, and its use in combination with other local anesthetics can result in an unsafe release of drug.
`
`Our PRINT Technology
`
`Both LIQ861 and LIQ865 are based upon our proprietary PRINT particle engineering technology, which allows us to engineer and manufacture highly
`uniform drug particles with precise control over their size, three-dimensional geometric shape and chemical composition. By controlling these physical and
`chemical parameters of particles, PRINT enables us to target and design desirable pharmacological benefits into product candidates, including prolonged
`duration of drug release, increased drug loading, a more convenient method of administration, novel combination products, enhanced storage and stability
`and the potential to reduce adverse side effects. We have scaled PRINT manufacturing to meet the demands of clinical development and, we believe,
`commercial production. Our approach enables us to design and produce custom micro- and nano-particles containing existing or new small molecule drugs
`or biologics. For example, we have engineered LIQ861 so that each particle has an ideal, uniform, aerodynamic size and shape for deep-lung delivery. Our
`PRINT particle engineering technology also allows us to design the chemical composition of particles to control drug release ranging from minutes, days,
`weeks or months as needed to meet a target profile, such as LIQ865’s three to five day release of bupivacaine.
`
`
`5
`
`Page 8 of 260
`
`

`

`
`
`Development, Regulatory and Commercial Strategy
`
`Initially, our internal pipeline is focused on the development of improved and differentiated drug products containing FDA-approved active pharmaceutical
`ingredients, or APIs, with established efficacy and safety profiles, which we believe are eligible for the 505(b)(2) regulatory pathway to seek marketing
`approval in the United States. The 505(b)(2) regulatory pathway can be capital efficient and potentially enable a shorter time to approval. We are seeking
`marketing approval in the United States for LIQ861 under the 505(b)(2) regulatory pathway, which would allow us to rely in part on existing knowledge of
`the safety and efficacy of the reference listed drugs. The FDA has indicated that it considers LIQ861, which is delivered by a DPI, to be a drug-device
`combination product and, accordingly, the DPI will be evaluated as part of our NDA filing. We also intend to develop LIQ865 under the 505(b)(2)
`regulatory pathway. Additionally, we recently initiated a pre-clinical program to develop an inhaled product leveraging the benefits of our PRINT
`technology to engineer particles with precise, uniform, aerodynamic size and shape for deep lung delivery.
`
`In addition to building our own internal pipeline, we may collaborate with pharmaceutical companies to assist in the development of their product
`candidates by leveraging our PRINT technology, which we believe has application across a wide range of therapeutic areas, molecule types and routes of
`administration. If our product candidates receive marketing approval, we plan to commercialize them in the United States either by ourselves or through
`partnership or licensing arrangements with other pharmaceutical companies. Outside of the United States, we intend to pursue the regulatory approval and
`commercialization of our product candidates in collaboration with pharmaceutical companies with regional expertise. We intend to manufacture our product
`candidates using in-house capabilities. Where appropriate, we will rely on contract manufacturing organizations, or CMOs, to produce, package and
`distribute our approved drug products on a commercial scale.
`
`Product Pipeline
`
`The following table summarizes our clinical-stage product candidates being developed using PRINT technology.
`
`
`
`Our Strategy
`
`Our goal is to develop and commercialize medicines with improved and differentiated product profiles based on our PRINT particle engineering technology.
`To achieve this goal, we intend to execute the following key elements of our business strategy:
`
`
`● Obtain regulatory approval of LIQ861, our proprietary dry powder inhalation formulation of treprostinil. In January 2020, we submitted an
`NDA to the FDA for LIQ861, our lead product candidate, as a potential treatment for patients with PAH. Treprostinil is a synthetic analog of
`prostacyclin, a vasoactive mediator essential to normal lung function, which is deficient in patients with PAH. We believe that LIQ861 has the
`potential to improve the therapeutic profile of existing formulations of treprostinil by enhancing deep-lung delivery and achieving higher dose
`levels than current inhaled therapies. LIQ861 is being developed under the 505(b)(2) regulatory pathway with Tyvaso as the reference listed drug,
`which allows us to rely in part on the FDA’s previous findings of efficacy and safety of Tyvaso and the active ingredient treprostinil, which has
`been approved in four different products administered through the continuous infusion (parenteral), inhaled and oral routes. Our NDA submission
`was supported by the favorable results of our pivotal Phase 3 trial, INSPIRE, conducted in 121 patients and completed during the third quarter of
`2019.
`
`
`
`
`
`6
`
`Page 9 of 260
`
`

`

`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`● Advance our local post-operative pain product candidate, LIQ865, through Phase 2-enabling toxicology studies into Phase 2 clinical trials. We
`completed a Phase 1a clinical trial of LIQ865 in Denmark in 2017 and a Phase 1b clinical trial in the United States in 2018. We initiated Phase 2-
`enabling toxicology studies in 2019 to assess LIQ865 in multiple non-clinical tissue models. Results from a study to assess incision tensile strength
`after healing were acceptable and not statistically different from controls. A nonclinical study to examine soft tissue healing was also completed,
`and the results were acceptable and comparable to vehicle-treated, saline-treated, and Marcaine-treated sites. We believe this data supports
`progression to Phase 2 hernia repair studies. In a study to assess bone fracture healing, we observed dose-dependent delayed healing at the two
`LIQ865 doses studied; however, there were no adverse effects noted on surrounding soft tissues. Additional studies have been initiated with
`lower doses of LIQ865 to determine a NOAEL on bone healing. We will review the results from these toxicology studies, and if supportive, we
`intend to initiate Phase 2 proof-of-concept clinical trials, subject to availability of capital and other factors, during 2021. We believe LIQ865, if
`successfully developed and approved, has the potential to provide significantly longer local post-operative pain relief compared to currently
`marketed formulations of bupivacaine.
`
`● Secure regulatory approval and commercialize our products in the United States either ourselves or through partnership or licensing
`arrangements with other pharmaceutical companies, and globally through licensing arrangements with pharmaceutical companies. We hold
`worldwide commercialization rights to LIQ861 and LIQ865. We are currently exploring opportunities to commercialize LIQ861 in the United
`States, subject to receiving regulatory approval, either by ourselves or through partnership or licensing arrangements with other pharmaceutical
`companies. With respect to LIQ865, after reviewing the results of all of our Phase 2-enabling toxicology studies, and subject to the availability of
`sufficient funding, we plan to evaluate whether to pursue continued internal development or to explore licensing arrangements with other
`pharmaceutical companies. Outside of the United States, we intend to pursue the regulatory approval and commercialization of LIQ861 and
`LIQ865 through licensing arrangements with pharmaceutical companies with regional expertise.
`
`● Expand our internal pipeline leveraging our PRINT technology. We intend to continue targeting diseases where we believe our PRINT
`technology can improve the efficacy, safety and patient experience of current treatments that have been impaired by suboptimal drug product
`formu