Design Therapeutics a new overweight at Wells Fargo on Friedreich ataxia program

H.C. Wainwright has reduced its price target on Liquidia Technologies (LQDA) stock to $58, down from $130, reflecting concerns over patent litigation with United Therapeutics. The analyst maintains a Buy rating but removed the PH-ILD indication from the financial model due to regulatory uncertainty. H.C. Wainwright now concentrates on the PAH indication and L606 pipeline.

The firm projects peak sales of $1.1 billion for PAH by 2030. The most likely near-term outcome, per the analyst, is a limited label for Yutrepia, with PH-ILD removed while the appeals process proceeds. The stock has plummeted 59% in a week to $27.99, significantly below InvestingPro’s Fair Value of $34.75, indicating possible undervaluation.

An InvestingPro tip suggests the stock is oversold, supporting the overreaction theory. H.C. Wainwright identifies Yutrepia’s dosing and efficacy as potential growth drivers for PAH. They also note the L606 pipeline opportunity in both PAH and PH-ILD indications. Liquidia reported mixed earnings for Q2 2026, with EPS at $0.74, slightly below expectations of $0.76, but revenue surpassing forecasts at $171.68 million.

Sales of YUTREPIA increased 31% to $170.4 million. The company faces downgrades from major analysts due to a recent unfavorable patent ruling. Wells Fargo cut the stock to Equal Weight, citing lower operating leverage and uncertainty around L606. Raymond James and BTIG also downgraded, citing a court decision that found Liquidia infringed on United Therapeutics’ patent related to inhaled treprostinil.

These developments expose the challenges Liquidia faces while navigating patent disputes and aiming for revenue growth.