0001558370-23-004191 | 10-K | XBRL Viewer

Document and Entity Information - USD ($)	12 Months Ended
Document and Entity Information - USD ($)	Dec. 31, 2022	Mar. 02, 2023	Jun. 30, 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	FY
Document Fiscal Year Focus	2022
Document Type	10-K
Document Annual Report	true
Document Period End Date	Dec. 31, 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 Well-known Seasoned Issuer	No
Entity Voluntary Filers	No
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
ICFR Auditor Attestation Flag	false
Entity Shell Company	false
Entity Public Float			$ 205,436,978
Entity Common Stock, Shares Outstanding		64,688,314
Auditor Firm ID	238
Auditor Name	PricewaterhouseCoopers LLP
Auditor Location	Raleigh, North Carolina

Consolidated Balance Sheets - USD ($) $ in Thousands	Dec. 31, 2022	Dec. 31, 2021
Current assets:
Cash and cash equivalents	$ 93,283	$ 57,494
Accounts receivable, net	5,017	2,990
Prepaid expenses and other current assets	1,511	792
Total current assets	99,811	61,276
Property, plant and equipment, net	4,151	5,017
Operating lease right-of-use assets, net	2,101	2,412
Indemnification asset, related party	6,595	6,282
Contract acquisition costs, net	8,604	10,138
Intangible asset, net	3,726	4,390
Goodwill	3,903	3,903
Other assets	307	311
Total assets	129,198	93,729
Current liabilities:
Accounts payable	2,197	1,070
Accrued expenses and other current liabilities	5,522	5,171
Current portion of operating lease liabilities	900	775
Current portion of finance lease liabilities	181	311
Total current liabilities	8,800	7,327
Litigation finance payable	6,594	6,143
Long-term operating lease liabilities	3,332	4,232
Long-term finance lease liabilities	171	352
Long-term debt	19,879	10,410
Total liabilities	38,776	28,464
Commitments and contingencies (Note 15)
Stockholders' equity:
Preferred stock - 10,000,000 shares authorized, none outstanding
Common stock - $0.001 par value, 80,000,000 shares authorized, 64,517,912 and 52,287,737 shares issued and outstanding as of December 31, 2022 and December 31, 2021, respectively	64	52
Additional paid-in capital	440,954	374,794
Accumulated deficit	(350,596)	(309,581)
Total stockholders' equity	90,422	65,265
Total liabilities and stockholders' equity	$ 129,198	$ 93,729

Consolidated Balance Sheets (Parentheticals) - $ / shares	Dec. 31, 2022	Dec. 31, 2021
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)	64,517,912	52,287,737
Common stock, shares outstanding (in shares)	64,517,912	52,287,737

Consolidated Statements of Operations and Comprehensive Loss - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2022	Dec. 31, 2021
Consolidated Statements of Operations and Comprehensive Loss
Revenue	$ 15,935	$ 12,853
Costs and expenses:
Cost of revenue	2,859	3,023
Research and development	19,435	20,517
General and administrative	32,411	23,110
Total costs and expenses	54,705	46,650
Loss from operations	(38,770)	(33,797)
Other income (expense):
Interest income	1,090	33
Interest expense	(2,338)	(762)
Loss on extinguishment of debt	(997)	(53)
Total other expense, net	(2,245)	(782)
Net loss and comprehensive loss	$ (41,015)	$ (34,579)
Net loss per common share, basic (in dollars per share)	$ (0.67)	$ (0.70)
Net loss per common share, diluted (in dollars per share)	$ (0.67)	$ (0.70)
Weighted average common shares outstanding, basic (in shares)	60,958,862	49,677,737
Weighted average common shares outstanding, diluted (in shares)	60,958,862	49,677,737

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		41		41
Issuance of common stock upon exercise of stock options (in shares)	14,699
Issuance of common stock upon vesting of restricted stock units (in shares)	40,539
Issuance of common stock under employee stock purchase plan (in shares)	270,185
Equity consideration for acquisition		261		261
Sale of common stock, net	$ 9	21,701		21,710
Sale of common stock, net (in shares)	8,626,037
Stock-based compensation		6,746		6,746
Net loss			(34,579)	(34,579)
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		838		$ 838
Issuance of common stock upon exercise of stock options (in shares)	232,877			233,356
Issuance of common stock upon vesting of restricted stock units (in shares)	54,181
Issuance of common stock under employee stock purchase plan		258		$ 258
Issuance of common stock under employee stock purchase plan (in shares)	51,941
Issuance of warrants		1,317		1,317
Equity consideration for acquisition	$ 1	(1)
Equity consideration for acquisition (in shares)	616,666
Sale of common stock, net	$ 11	54,450		54,461
Sale of common stock, net (in shares)	11,274,510
Stock-based compensation		9,298		9,298
Net loss			(41,015)	(41,015)
Balance at Dec. 31, 2022	$ 64	$ 440,954	$ (350,596)	$ 90,422
Balance (in shares) at Dec. 31, 2022	64,517,912

Consolidated Statements of Cash Flows - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2022	Dec. 31, 2021
Operating activities
Net loss	$ (41,015)	$ (34,579)
Adjustments to reconcile net loss to net cash used in operating activities:
Stock-based compensation	9,298	6,746
Depreciation and amortization	3,647	5,612
Non-cash lease expense	311	237
Loss on disposal of property and equipment	4	44
Loss on extinguishment of debt	997	53
Non-cash interest expense	328	232
Changes in operating assets and liabilities:
Accounts receivable, net	(2,027)	(2,990)
Prepaid expenses and other current assets	(719)	(40)
Other non-current assets	4	80
Accounts payable	814	(7,559)
Accrued expenses and other current liabilities	545	563
Refund liability		(1,769)
Operating lease liabilities	(775)	(665)
Net cash used in operating activities	(28,588)	(34,035)
Investing activities
Purchases of property, plant and equipment	(592)	(107)
Proceeds from the sale of property, plant and equipment	5
Net cash used in investing activities	(587)	(107)
Financing activities
Principal payments on finance leases	(311)	(477)
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	451	4,989
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	1,096	41
Net cash provided by financing activities	64,964	26,320
Net increase (decrease) in cash and cash equivalents	35,789	(7,822)
Cash and cash equivalents, beginning of period	57,494	65,316
Cash and cash equivalents, end of period	93,283	57,494
Supplemental disclosure of cash flow information
Cash paid for interest	1,626	423
Cash paid for operating lease liabilities	1,244	1,208
Reduction of lease liability and right-of-use asset from lease modification		39
Non-cash increase in property, plant and equipment through accounts payable	139
Non-cash increase in indemnification asset through accounts payable	$ 313	$ 4,895

Business

12 Months Ended

Dec. 31, 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 Sandoz’s 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 in the treatment of pulmonary arterial hypertension (“PAH”), 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 subject matter expertise in cardiopulmonary diseases and our proprietary PRINT® technology, 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. Through development of the Company’s own products and research with third parties, the Company has experience applying PRINT across multiple routes of administration and drug payloads including inhaled therapies, vaccines, biologics, nucleic acids and ophthalmic implants, among others.

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 with PRINT to improve the therapeutic profile of treprostinil by enhancing deep lung delivery while using a convenient, low resistance dry-powder inhaler (“DPI”) and by achieving higher dose levels than the labelled dose of current inhaled therapies. The Company’s New Drug Application (“NDA”) for YUTREPIA was tentatively approved by the U.S. Food and Drug Administration (“FDA”) for the treatment of PAH in November 2021. The FDA also confirmed that the clinical data in the NDA would support the Company’s pursuit of a supplemental NDA to treat patients with pulmonary hypertension and interstitial lung disease (PH-ILD) upon the expiration of regulatory exclusivity for the nebulized form of treprostinil in March 2024.

Recent Developments

On January 9, 2023, the Company entered into a Revenue Interest Financing Agreement (the “RIFA”) with HealthCare Royalty Partners IV, L.P. (“HCR”) and HealthCare Royalty Management, LLC. Pursuant to the RIFA and subject to customary closing conditions, HCR has agreed to pay the Company an aggregate investment amount of up to $100.0 million (the “Investment Amount”). Under the terms of the RIFA, $32.5 million of the Investment Amount was funded on January 27, 2023 (the “Initial Investment Amount”), $22.4 million of which was used to satisfy in full and retire the Company’s indebtedness under the Amended and Restated Loan and Security Agreement with Silicon Valley Bank, with the excess proceeds less transaction costs of approximately $0.7 million funded to the Company. Under the RIFA, an additional $35.0 million of the Investment Amount will be funded fifteen business days after the earlier of regulatory approval of YUTREPIA or a favorable determination relating to the asserted patents in the ongoing patent litigation with

United Therapeutics Corporation and $25.0 million of the Investment Amount will be funded fifteen business days after the mutual agreement of HCR and the Company to fund such amount. See Note 16 for further information.

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 may require additional capital in advance of a potential commercial launch of YUTREPIA. If the Company is unable to access the contingent Investment Amounts from the RIFA or generate substantial YUTREPIA product revenue by the second quarter of 2024, the Company will require additional capital. The Company may also require additional capital to pursue in-licenses or acquisitions of other product candidates. If the Company concludes it requires but 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 has evaluated whether there are conditions and events, considered in the aggregate, that raise substantial doubt about the Company’s ability to continue as a going concern within one year after the date that the consolidated financial statements are issued. The Company has financed its growth and operations through a combination of funds generated from revenues, the issuance of convertible preferred stock and common stock, bank borrowings, bank borrowings with warrants and the issuance of convertible notes and warrants, and revenue interest financing. Since inception, the Company has incurred recurring losses, including net loss of $41.0 million for the year ended December 31, 2022 and the Company had an accumulated deficit of $350.6 million as of December 31, 2022. Although the Company expects to continue to generate operating losses for the foreseeable future, management believes that based on its current operating plan, excluding any potential contingent Investment

Amounts from the RIFA and future YUTREPIA product revenue, its cash and cash equivalents will be sufficient to fund operations and capital expenditure requirements and allow it to remain in compliance with its minimum cash covenants pursuant to the RIFA for at least twelve months from the issuance date of these consolidated financial statements. If the Company is unable to access additional Investment Amounts from the RIFA, there could be substantial doubt about the Company’s ability to continue as a going concern as of the date of the issuance of the Company’s second quarter 2023 financial statements. The Company has based these estimates on assumptions that may differ from actual results, and it could use its available resources sooner than expected.

Basis of Presentation and Summary of Significant Accounting Policies

12 Months Ended

Dec. 31, 2022

Basis of Presentation and Summary of Significant Accounting Policies

Basis of Presentation and Summary of Significant Accounting Policies

2. Basis of Presentation and Summary of Significant Accounting Policies

Basis of Presentation

The Company has prepared the accompanying financial statements in conformity with generally accepted accounting principles in the United States of America (“GAAP”). Such financial statements reflect all adjustments that are, in management’s opinion, necessary to present fairly, in all material respects, the Company’s financial position, results of operations and cash flows and are presented in U.S. Dollars.

Consolidation

The accompanying consolidated financial statements include the Company’s wholly owned subsidiaries, Liquidia Technologies and Liquidia PAH. All intercompany accounts and transactions have been eliminated.

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. These estimates are based on historical experience and various other assumptions believed reasonable under the circumstances. The Company evaluates its estimates on an ongoing basis, including those related to the valuation of stock-based awards, certain accruals, and intangible and contract acquisition cost amortization, and makes changes to the estimates and related disclosures as experience develops or new information becomes known. Actual results will most likely differ from those estimates.

Summary of Significant Accounting Policies

Cash

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 consolidated balance sheet. As of December 31, 2022 all of the Company’s cash and cash equivalents were held with Silicon Valley Bank (“SVB”). Following the March 10, 2023 closure of SVB, substantially all of the Company’s cash and cash equivalents were moved to a different accredited financial institution. The Company has not experienced any losses on such accounts and does not believe that it is subject to unusual credit risk beyond the normal credit risk associated with commercial banking relationships. Such deposits have and will continue to exceed federally insured limits.

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 99% and 98% of accounts receivable at December 31, 2022 and 2021, respectively. As of December 31, 2022 and 2021, the Company has not recorded an allowance for credit losses.

Leases

ASC 842 Leases sets out the principles for the recognition, measurement, presentation and disclosure of leases for both lessees and lessors. The standard requires lessees to apply a dual approach, classifying leases as either finance or operating leases based on the principle of whether or not the lease is effectively a financed purchase by the lessee. This classification will determine whether lease expense is recognized based on an effective interest method or on a straight-line basis over the term of the lease. A lessee is also required to record a right-of-use asset and a lease liability for all leases with a term of greater than 12 months regardless of their classification. For operating leases, the asset and liability is expensed over the lease term on a straight-line basis, with all cash flows classified as an operating activity in the Statement of Cash Flows. For finance leases, interest on the lease liability is recognized separately from the amortization of the right-of-use asset in the Statement of Operations and Comprehensive Loss and the repayment of the principal portion of the lease liability is classified as a financing activity, while the interest component is classified as an operating activity in the Statement of Cash Flows.

Property, Plant and Equipment

Property, plant and equipment are stated at cost. Depreciation of property, plant and equipment is computed using the straight-line method over the estimated useful lives of the assets beginning when the assets are placed in service. Estimated useful lives for the major asset categories are:


Lab and build-to-suit equipment (years)		5 - 7
Office equipment (years)		5
Furniture and fixtures (years)		10
Computer equipment (years)		3
Leasehold improvements		Lesser of life of the asset or remaining lease term

Major renewals and improvements are capitalized to the extent that they increase the useful economic life or increase the expected economic benefit of the underlying asset. Maintenance and repairs are charged to operations as incurred. When items of property, plant and equipment are sold or retired, the related cost and accumulated depreciation or amortization is removed from the accounts, and any gain or loss is included in operating expenses in the accompanying Statements of Operations and Comprehensive Loss.

Long-Lived Assets

The Company reviews long-lived 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. 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 the quantitative goodwill impairment test is performed by comparing the fair value of the reporting unit with its carrying amount, including goodwill. If the fair value of the reporting unit exceeds its carrying amount, goodwill is not impaired. An impairment loss is recognized for any excess of the carrying amount of the reporting unit’s goodwill over the fair value up to the amount of goodwill allocated to the reporting unit. Income tax effects from any tax-deductible goodwill on the carrying amount of the reporting unit are considered when measuring the goodwill impairment loss, if applicable.

The Company completed its annual goodwill impairment test as of July 1, 2022. There have been no significant events or circumstances affecting the valuation of goodwill subsequent to the assessment.

Revenue Recognition from Promotion Agreements

The Company recognizes revenue in accordance with ASU 2014-09, Revenue from Contracts with Customers (Topic 606). The core principle of Topic 606 is that a company should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the company expects to be entitled in exchange for those goods or services. The following five steps are applied to achieve that core principle:

●

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.

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 exchange for a share of Sandoz’s net profits, as defined within the Promotion Agreement. In addition, the Company paid Sandoz $20.0 million at the inception of the Promotion Agreement, in consideration for the right to conduct the promotional activities for the product. In exchange for its services, the Company is entitled to receive a portion of net profits based on specified profit levels associated with the product.

The Company determined that certain activities within the contract are within the scope of ASC 808, Collaborative Arrangements. The commercialization of the product is a joint operating activity where the Company will provide promotional activities for Sandoz’s intellectual property and Sandoz will be responsible for items such as supply of the product, distribution to customers, managing sales, processing returns, and regulatory matters, and protection of patents. Both parties will be active participants, each carrying out its assigned responsibilities, and participating in the joint operating activity and will share in the risks and rewards of the commercialization through the profit-sharing arrangement.

In addition, the Company determined that the services provided under the Promotion Agreement fall within the scope of Topic 606. The promotional activities the Company performs are one of the services the Company expects to provide as part of its ordinary activities, and it is receiving consideration for this service from Sandoz in the form of a share of “Net Profits” (as defined in the Promotion Agreement). The Company has one combined performance obligation under the Promotion Agreement, which is to perform promotional and non-promotional activities to encourage the appropriate use of the product in accordance with the product labeling and applicable law. As such, and in accordance with ASU 2018-18: Clarifying the Interaction between Topic 808 and Topic 606, the Company will account for the entire Promotion Agreement under Topic 606.

Segment Information

U.S. 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.

Research and Development Expense

Research and development costs are expensed as incurred and include direct costs incurred to third parties related to the salaries of, and stock-based compensation for, personnel involved in research and development activities, contractor fees, administrative expenses and allocations of research-related overhead costs. Administrative expenses and research-related overhead costs included in research and development expense consist of allocations of facility and equipment lease charges, depreciation and amortization of assets and insurance directly related to research and development activities.

Patent Maintenance

The Company is responsible for all patent costs, past and future, associated with the preparation, filing, prosecution, issuance, maintenance, enforcement and defense of United States patent applications. Such costs are recorded as general and administrative expenses as incurred. To the extent that the Company’s licensees share these costs, such benefit is recorded as a reduction of the related expenses.

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 vesting term (see Note 8).

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 excludes the following common stock equivalent shares:


	Year Ended
	December 31,
	2022	2021
Stock Options	7,757,017	5,234,582
Restricted Stock Units	399,349	259,705
Warrants	445,205	168,767
Total	8,601,571	5,663,054

Certain common stock warrants are included in the calculation of basic and diluted net loss per share since their exercise price is de minimis.

Fair Value of Financial Instruments

The carrying amounts reflected in the Company's consolidated balance sheets for cash, accounts receivable, 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 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 — Other than quoted prices included in Level 1 inputs 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 liabilities measured at fair value:


	Quoted		Significant
	Prices in		Other		Significant
	Active		Observable		Unobservable
	Markets		Inputs		Inputs		Carrying
December 31, 2022	(Level 1)		(Level 2)		(Level 3)		Value
Assets
Money market mutual funds (cash equivalents)	$	92,283	$	—	$	—	$	92,283
Liabilities
A&R Silicon Valley Bank term loan	$	—	$	18,853	$	—	$	19,879


	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 consolidated balance sheets. They are valued using quoted market prices and therefore are classified within Level 1 of the fair value hierarchy.

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.

Income Taxes

The asset and liability method is used in the Company’s accounting for income taxes. Under this method, deferred tax assets and liabilities are determined based on differences between financial reporting and tax bases of assets and liabilities and are measured using the enacted tax rates and laws that are expected to be in effect when the differences are expected to reverse. The Company records a valuation allowance against deferred tax assets when realization of the tax benefit is uncertain.

A valuation allowance is recorded, if necessary, to reduce net deferred taxes to their realizable values if management believes it is more likely than not that the net deferred tax assets will not be realized.

The Company may recognize the tax benefit from an uncertain tax position only if it is more likely than not that the tax position will be sustained on examination by the taxing authorities based on the technical merits of the position. The tax benefits recognized in the financial statements from such a position are measured based on the largest benefit that has a greater than 50% likelihood of being realized upon ultimate settlement.

Recent Accounting Pronouncements

In August 2020, the FASB issued ASU 2020-06, Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity. This guidance simplifies the accounting for certain financial instruments with characteristics of liabilities and equity, including convertible instruments and contracts in an entity’s own equity. Effective January 1, 2022, the Company adopted ASU 2020-06, which had no impact on the Company’s financial statements and related disclosures.

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.

Property, Plant and Equipment

12 Months Ended

Dec. 31, 2022

Property, Plant and Equipment

Property, Plant and Equipment

3. Property, Plant and Equipment

Property, plant and equipment consisted of the following:


	December 31,		December 31,
	2022		2021
Lab and build-to-suit equipment	$	6,257	$	6,600
Office equipment		19		19
Furniture and fixtures		134		177
Computer equipment		291		347
Leasehold improvements		11,409		11,457
Construction-in-progress		155		—
Total property, plant and equipment		18,265		18,600
Accumulated depreciation and amortization		(14,114)		(13,583)
Property, plant and equipment, net	$	4,151	$	5,017

The Company recorded depreciation and amortization expense of $1.4 million and $1.8 million for the years ended December 31, 2022 and 2021, respectively. Maintenance and repairs are expensed as incurred and were $0.3 million and $0.1 million for the years ended December 31, 2022 and 2021, respectively.

Contract Acquisition Costs and Intangible Asset, and Goodwill

12 Months Ended

Dec. 31, 2022

Contract Acquisition Costs and Intangible Asset, and Goodwill

Contract Acquisition Costs and Intangible Asset, and Goodwill

4. Contract Acquisition Costs and Intangible Asset, and Goodwill

Contract acquisition costs and intangible asset are summarized as follows:


	December 31, 2022						December 31, 2021
	Gross Carrying Amount		Accumulated Amortization		Net Carrying Amount		Gross Carrying Amount		Accumulated Amortization		Net Carrying Amount
Contract acquisition costs	$	12,980	$	(4,376)	$	8,604	$	12,980	$	(2,842)	$	10,138
Intangible asset	$	5,620	$	(1,894)		3,726	$	5,620	$	(1,230)		4,390

The Company is amortizing the value of the contract acquisition costs and customer relationship 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 December 2032, the termination date of the Promotion Agreement (see Note 2-Revenue Recognition). 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 $1.5 million and $2.7 million for the years ended December 31, 2022 and 2021, respectively. The Company recorded amortization related to the intangible asset of $0.7 million and $1.1 million for the years ended December 31, 2022 and 2021, respectively. Annual amortization over the next five years is expected to be lower than prior years primarily due to an amendment to the Sandoz Agreement entered into during the fourth quarter of 2022, which extended the term of the Agreement by five years.

During the year ended December 31, 2020 the Company recorded goodwill of $3.9 million, which primarily represents the Liquidia PAH assembled workforce and the residual value of the purchase consideration and assumed liabilities that exceeded the assets acquired (see Note 2-Goodwill). As of December 31, 2022, the Company concluded that there were no events or changes in circumstances that indicated that the carrying amount of goodwill was not recoverable.

Indemnification Asset with Related Party and Litigation Finance Payable

12 Months Ended

Dec. 31, 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 in November 2020, were pursuing litigation against Smiths Medical. 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, all 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 March 1, 2023) 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 primarily 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 United Therapeutics and Smiths Medical ASC 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 ASC litigation.

As of December 31, 2022, the Indemnification Asset and Litigation Finance Payable were classified as long-term assets and liabilities, respectively as it is considered unlikely that the litigation will conclude prior to December 31, 2023.

Accrued Expenses and Other Current Liabilities

12 Months Ended

Dec. 31, 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:


	December 31,		December 31,
	2022		2021
Accrued compensation	$	2,862	$	3,157
Accrued research and development expenses		1,757		344
Accrued other expenses		903		1,670
Total accrued expenses and other current liabilities	$	5,522	$	5,171

Stockholders' Equity

12 Months Ended

Dec. 31, 2022

Stockholders' Equity

Stockholders' Equity

7. Stockholders’ Equity

Authorized Capital

As of December 31, 2022, the authorized capital of the Company consists of 90,000,000 shares of capital stock, $0.001 par value per share, of which 80,000,000 shares are designated as common stock and 10,000,000 shares are designated as preferred stock.

Common Stock

Upon any voluntary or involuntary liquidation, dissolution or winding up of the affairs of the Company, the holders of the common stock shall be entitled to receive that portion of the remaining funds to be distributed to the stockholders, subject to the liquidation preferences of any outstanding preferred stock, if any. Such funds shall be paid to the holders of common stock on the basis of the number of shares so held by each of them.

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.

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 year ended December 31, 2022, no warrants to purchase shares of common stock were exercised. During the year ended December 31, 2021, 40,702 warrants to purchase shares of common stock were exercised.

As of December 31, 2022, outstanding warrants consisted of the following:


	Number of
	warrants	Exercise Price		Expiration Date
A&R SVB Warrant - Initial Tranche (see Note 12)	250,000	$	5.14	January 6, 2032
SVB Warrant - Initial Tranche (see Note 12)	100,000	$	3.05	February 26, 2031
SVB Warrant - Term B and Term C Tranches (see Note 12)	100,000	$	n/a	February 26, 2031
Other warrants	65,572	$	0.02	December 31, 2026

- Definition

The entire disclosure for shareholders' equity comprised of portions attributable to the parent entity and noncontrolling interest, including other comprehensive income. Includes, but is not limited to, balances of common stock, preferred stock, additional paid-in capital, other capital and retained earnings, accumulated balance for each classification of other comprehensive income and amount of comprehensive income.

+ References

Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 505
-URI https://asc.fasb.org/topic&trid=2208762

Reference 2: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 505
-SubTopic 10
-Section 50
-Paragraph 13
-Subparagraph (b)
-URI https://asc.fasb.org/extlink&oid=126973232&loc=SL123496158-112644

Reference 3: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 505
-SubTopic 10
-Section 50
-Paragraph 13
-URI https://asc.fasb.org/extlink&oid=126973232&loc=SL123496158-112644

Reference 4: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 505
-SubTopic 10
-Section 50
-Paragraph 14
-Subparagraph (c)
-URI https://asc.fasb.org/extlink&oid=126973232&loc=SL123496171-112644

Reference 5: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 505
-SubTopic 10
-Section 50
-Paragraph 14
-Subparagraph (b)
-URI https://asc.fasb.org/extlink&oid=126973232&loc=SL123496171-112644

Reference 6: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 505
-SubTopic 10
-Section S99
-Paragraph 1
-Subparagraph (SX 210.3-04)
-URI https://asc.fasb.org/extlink&oid=120397183&loc=d3e187085-122770

Reference 7: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 505
-SubTopic 10
-Section 50
-Paragraph 18
-Subparagraph (d)
-URI https://asc.fasb.org/extlink&oid=126973232&loc=SL123496189-112644

Reference 8: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 505
-SubTopic 10
-Section 50
-Paragraph 13
-Subparagraph (g)
-URI https://asc.fasb.org/extlink&oid=126973232&loc=SL123496158-112644

Reference 9: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 505
-SubTopic 10
-Section 50
-Paragraph 18
-Subparagraph (a)
-URI https://asc.fasb.org/extlink&oid=126973232&loc=SL123496189-112644

Reference 10: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 505
-SubTopic 10
-Section 50
-Paragraph 13
-Subparagraph (h)
-URI https://asc.fasb.org/extlink&oid=126973232&loc=SL123496158-112644

Reference 11: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 505
-SubTopic 10
-Section 50
-Paragraph 14
-Subparagraph (a)
-URI https://asc.fasb.org/extlink&oid=126973232&loc=SL123496171-112644

Reference 12: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 505
-SubTopic 10
-Section 50
-Paragraph 18
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-URI https://asc.fasb.org/extlink&oid=126973232&loc=SL123496189-112644

Reference 13: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 505
-SubTopic 10
-Section 50
-Paragraph 16
-Subparagraph (b)
-URI https://asc.fasb.org/extlink&oid=126973232&loc=SL123496180-112644

Reference 14: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 505
-SubTopic 10
-Section 50
-Paragraph 13
-Subparagraph (i)
-URI https://asc.fasb.org/extlink&oid=126973232&loc=SL123496158-112644

Reference 15: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
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-Paragraph 1
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Reference 16: http://www.xbrl.org/2003/role/disclosureRef
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-URI https://asc.fasb.org/extlink&oid=126731327&loc=SL126733271-114008

+ Details

Stock-Based Compensation

12 Months Ended

Dec. 31, 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 options, 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, 2023, the number of shares of common stock available for issuance under the 2020 Plan automatically increased by 2,580,716 shares to 2,851,611 shares pursuant to the Evergreen Provision. As of December 31, 2022, there were 270,895 shares available for future grants 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 December 31, 2022, the Company had a total of 673,880 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 December 31, 2022, the Company had a total of 12,800 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”). 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 year ended December 31, 2022, 51,941 shares of common stock were issued under the ESPP. As of December 31, 2022, a total of 548,059 shares of the Company’s common stock are reserved for issuance under the ESPP. On January 1, 2023, 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.

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 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 year ended December 31, 2022.

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 vested and became 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, subject to Dr. Jeffs’ continuous employment with the Company on each such vesting date. Notwithstanding the foregoing, in the event of a Change in Control (as defined in the 2020 Plan), 100% of the unvested portion of the Options shall become vested and exercisable as of the closing date of such Change in Control, provided that Dr. Jeffs is actively employed with the Company on such date.

Stock-Based Compensation Valuation and Expense

Total stock-based compensation expense recognized for employees and non-employees was as follows:


	Year Ended
	December 31,
By Expense Category:	2022		2021
Research and development	$	1,409	$	1,923
General and administrative		7,889		4,823
Total stock-based compensation expense	$	9,298	$	6,746

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 December 31, 2022
			Weighted
			Average
			Remaining
			Recognition
	Unamortized		Period
	Expense		(Years)
Stock options	$	15,532	2.9
Restricted stock units	$	1,723	2.9

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 Company uses the Black-Scholes option-pricing model to estimate the fair value of stock options granted and purchase rights issued under the ESPP.

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.

The following table summarizes the assumptions used for estimating the fair value of stock options granted under the Black-Scholes option-pricing model during the years ended December 31, 2022 and 2021:


	Year Ended
	December 31,
	2022	2021
Expected dividend yield	—	—
Risk-free interest rate	1.46% - 3.96%	0.62% - 1.67%
Expected volatility	90% - 95%	91% - 96%
Expected life (years)	5.8 - 6.1	5.2 - 6.1

The following table summarizes the assumptions used for estimating the fair value purchase rights granted to employees under the ESPP under the Black-Scholes option-pricing model during the year ended December 31, 2022:


		Year Ended
		December 31,
		2022
Expected dividend yield		—
Risk-free interest rate		0.69% - 3.92%
Expected volatility		80% - 129%
Expected life (years)		0.50

The following describes the Company’s methodology for determining each assumption:

Expected Dividend Yield: The dividend yield percentage is zero because the Company has not historically paid dividends and does not expect to for the foreseeable future.

Risk-Free Interest Rate: The risk-free interest rate is based on the U.S. Treasury yield curve approximating the term of the expected life of the award in effect on the date of grant.

Expected Volatility: Expected stock price volatility is based on a weighted average of several peer public companies and the historical volatility of the Company’s common stock during the period for which it has traded since the initial public offering. For purposes of identifying peer companies, the Company considered characteristics such as industry, length of trading history and similar vesting terms.

Expected Life: The expected life represents the period the awards are expected to be outstanding. The Company’s historical share option exercise experience does not provide a reasonable basis upon which to estimate an expected term because of a lack of sufficient data. Therefore, the Company estimates the expected term by using the simplified method.

Stock Options

The following table summarizes the Company’s stock option activity during the year ended December 31, 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	4,489,277		5.22
Exercised	(233,356)		3.60
Cancelled	(1,455,668)		5.73
Outstanding as of December 31, 2022	8,398,262	$	4.49	8.5	$	17,628
Exercisable as of December 31, 2022	3,327,055	$	4.03	7.8	$	9,442
Vested and expected to vest as of December 31, 2022	7,914,670	$	4.47	8.5	$	16,849

The weighted average fair value for options granted during the years ended December 31, 2022 and 2021 was $3.94 and $2.23 per share, respectively. The aggregate intrinsic value of stock options in the table above represents the difference between the $6.37 closing price of the Company’s common stock as of December 31, 2022 and the exercise price of outstanding, exercisable, and vested and expected to vest in-the-money stock options.

Additional information related to our stock options is summarized below:


	December 31,
	2022		2021
Cash proceeds from options exercised	$	837	$	41
Aggregate intrinsic value of options exercised	$	553	$	21
Fair value of options vested	$	4,427	$	6,169

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 year ended December 31, 2022, the Board of Directors approved grants of an aggregate of 503,403 time-based RSUs to employees. 93,834 of these RSUs were issued to Dr. Rajeev Saggar, the Company’s Chief Medical Officer since July 2022, pursuant to his employment agreement of which 50% will vest on the first anniversary of his start date with the balance to vest quarterly through July 2025. 63,230 of these RSUs were issued to Dr. Jeffs pursuant to his employment agreement and vest quarterly through January 2023. The remaining 346,339 RSUs vest over a four-year period similar to stock options granted to employees.

The following table summarizes the Company’s RSU activity during the year ended December 31, 2022:


		Weighted
		Average
		Grant-Date
	Number of	Fair Value
	RSUs	(per RSU)
Unvested as of December 31, 2021	15,204	$	3.31
Granted	503,403		5.64
Vested	(54,181)		4.91
Forfeited	(56,700)		6.25
Unvested as of December 31, 2022	407,726	$	5.57

Revenue From Contracts With Customers

12 Months Ended

Dec. 31, 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. The Company paid Sandoz $20.0 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 December 31, 2022 and 2021, a $0.5 million refund liability is offset against accounts receivable from Sandoz.

The Company derived approximately 98% and 99% of its revenue from the Promotion Agreement for the years ended December 31, 2022 and 2021, respectively.

- Definition

The entire disclosure of revenue from contract with customer to transfer good or service and to transfer nonfinancial asset. Includes, but is not limited to, disaggregation of revenue, credit loss recognized from contract with customer, judgment and change in judgment related to contract with customer, and asset recognized from cost incurred to obtain or fulfill contract with customer. Excludes insurance and lease contracts.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 606
-URI https://asc.fasb.org/topic&trid=49130388

Reference 2: http://www.xbrl.org/2003/role/disclosureRef
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-Name Accounting Standards Codification
-Topic 606
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+ Details

Income Taxes

12 Months Ended

Dec. 31, 2022

Income Taxes

Income Taxes

10. Income Taxes

No provision for federal and state income tax expense has been recorded for the years ended December 31, 2022 and 2021 due to the valuation allowance recorded against the net deferred tax asset and recurring losses.

Deferred income taxes reflect the net tax effect of temporary differences between the carrying amount of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. Significant components of the Company’s deferred tax assets and liabilities are as follows as of December 31, 2022 and 2021:


	2022		2021
Deferred income tax assets:
Tax loss carryforwards	$	59,241	$	57,302
Research and development credits		3,942		4,204
R&D section 174 costs		4,584		—
Share-based compensation		4,637		3,213
Lease liability		1,157		1,627
Compensation		621		800
Fixed assets		369		250
Patent amortization		476		325
Accrued litigation costs		1,546		1,641
Settlement reserve		123		141
Other		2		1
Valuation allowance		(74,549)		(66,987)
Total deferred income tax assets		2,149		2,517
Deferred income tax liabilities:
Section 481(a) adjustment		21		48
Intangible assets		1,546		1,679
Right of use asset		582		790
Total deferred income tax liabilities		2,149		2,517
Total net deferred tax	$	—	$	—

As of December 31, 2022 and 2021, the Company has established a full valuation allowance against its net deferred tax assets since, at the time, the Company could not assert that it was more likely than not that its deferred tax assets would be realized. As a result, there was an increase in the valuation allowance in 2022 of approximately $7.6 million.

As of December 31, 2022, the Company had federal and state income tax loss carryforwards of $278.7 million and $304.1 million, respectively, which begin to expire in 2024 for federal purposes and in 2023 for state purposes. In addition, the Company has tax credit carryforwards for federal tax purposes of approximately $4.3 million as of December 31, 2022, which begin to expire in 2026. The utilization of net operating loss and tax credit carryforwards to reduce future income taxes will depend on the Company’s ability to generate sufficient taxable income prior to the expiration of the loss carryforwards.

The Internal Revenue Code of 1986, as amended, contains provisions which limit the ability to utilize the net operating loss carryforwards in the case of certain events, including significant changes in ownership interests. If the Company’s net operating loss carryforwards are limited, and the Company has taxable income which exceeds the permissible yearly net operating loss carryforwards, the Company would incur a federal income tax liability even though net operating loss carryforwards would be available in future years.

The reasons for the difference between actual income tax expense for the years ended December 31, 2022 and 2021 and the amount computed by applying the statutory federal income tax rate to income before income tax are as follows:


	2022				2021
			% of				% of
			Pretax				Pretax
	Amount		Earnings		Amount		Earnings
Income tax benefit at statutory rate	$	(8,613)	21.0	%	$	(7,261)	21.0	%
State income taxes, net of federal tax benefit		(1,787)	4.4			(2,626)	7.6
Non-deductible expenses		1	—			—	—
Stock-based compensation		310	(0.8)			286	(0.8)
Credits		—	—			(262)	0.8
Deferred tax true-up		1,159	(2.9)			—	—
Change in state rate		1,368	(3.3)			4,454	(12.9)
Other		—	—			18	(0.1)
Change in valuation allowance		7,562	(18.4)			5,391	(15.6)
Provision for income taxes	$	—	—	%	$	—	—	%

The Company has determined that there may be a future limitation on the Company’s ability to utilize its entire federal R&D credit carryover. Therefore, the Company recognized an uncertain tax benefit associated with the federal R&D credit carryover during the years ended December 31, 2022 and 2021, as follows:


Balance at December 31, 2020	$	403
Increases related to 2021		52
Balance at December 31, 2021		455
Decreases related to 2022		(65)
Balance at December 31, 2022	$	390

The Company recognizes the tax benefit from an uncertain tax position only if it is more likely than not that the tax position will be sustained on examination by the taxing authorities based on the technical merits of the position. The Company has determined that it had no other material uncertain tax benefits for the year ended December 31, 2022. The Company’s policy for recording interest and penalties related to uncertain tax provisions is to record them as a component of the provision for income taxes. The Company did not have any accrued interest or penalties associated with any unrecognized tax positions as of December 31, 2022 and 2021, and there were no such interest or penalties recognized during the years ended December 31, 2022 and 2021.

On November 18, 2021, North Carolina enacted the 2021 Appropriations Act, which included a gradual corporate income tax rate decrease from the current 2.5% to 0% by 2030. The Company is in a cumulative loss position and does not have significant deferred tax liabilities that can be utilized as a source of taxable income in the future. Therefore, in 2021, the Company reduced its deferred tax asset related to North Carolina NOLs to zero, as no benefit is expected to be realized from these deferred tax assets prior to 2030 when there would be no income tax in North Carolina. The reduction in the value of the deferred tax assets resulted in $5.7 million of cumulative tax expense, which is fully offset by the reduction in the corresponding valuation allowance. If the Company becomes profitable prior to 2030, the Company will recognize an income tax benefit related to the portion of its deferred tax asset related to North Carolina NOLs utilized.

The Company has all tax years open to examination by federal tax and state tax jurisdictions. No income tax returns are currently under examination by taxing authorities.

- Definition

The entire disclosure for income taxes. Disclosures may include net deferred tax liability or asset recognized in an enterprise's statement of financial position, net change during the year in the total valuation allowance, approximate tax effect of each type of temporary difference and carryforward that gives rise to a significant portion of deferred tax liabilities and deferred tax assets, utilization of a tax carryback, and tax uncertainties information.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
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Reference 2: http://www.xbrl.org/2003/role/disclosureRef
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Reference 6: http://www.xbrl.org/2003/role/disclosureRef
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Reference 7: http://www.xbrl.org/2003/role/disclosureRef
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Reference 8: http://www.xbrl.org/2003/role/disclosureRef
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Reference 9: http://www.xbrl.org/2003/role/disclosureRef
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-Subparagraph (SX 210.4-08(h)(2))
-URI https://asc.fasb.org/extlink&oid=120395691&loc=d3e23780-122690

+ Details

Leases

12 Months Ended

Dec. 31, 2022

Leases

Leases

11. 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 Topic 842, 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. 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 2021 consolidated financial statements.

The Company’s lease cost is reflected in the accompanying Statements of Operations and Comprehensive Loss as follows:


		Year Ended December 31,
	Classification	2022		2021
Operating lease cost:
Fixed lease cost	Research and development	$	702	$	702
Fixed lease cost	General and administrative		78		78
Finance lease cost:
Amortization of lease assets	Research and development		135		267
Interest on lease liabilities	Interest expense		32		43
Total Lease Cost		$	947	$	1,090

The weighted average remaining lease term and discount rates as of December 31, 2022 were as follows:


Weighted average remaining lease term (years):
Operating leases	3.8
Finance leases	1.9
Weighted average discount rate:
Operating leases	10.3	%
Finance leases	6.5	%

The discount rate for operating leases was estimated based upon market rates of collateralized loan obligations of comparable companies on comparable terms.

The future minimum lease payments as of December 31, 2022 were as follows:


	Operating		Finance
Year ending December 31:	Leases		Leases		Total
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		5,114		374		5,488
Less: Interest		(882)		(22)		(904)
Present value of lease liabilities	$	4,232	$	352	$	4,584

Long-Term Debt

12 Months Ended

Dec. 31, 2022

Long-term Debt

Long-term Debt

12. Long-Term Debt

Long-term debt consisted of the following:


		December 31,		December 31,
	Maturity Date	2022		2021
A&R Silicon Valley Bank term loan	December 1, 2025	$	19,879	$	—
Silicon Valley Bank term loan	September 1, 2024		—		10,410
Long-term debt		$	19,879	$	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 available in three tranches. $20.0 million was funded on the A&R SVB LSA Effective Date, $10.5 million of which was used to satisfy its existing obligations under the SVB LSA (see below). The Company accounted for the repayment of the SVB LSA in accordance with ASC 405-20, Extinguishments of Liabilities, which resulted in a loss on extinguishment during the year ended December 31, 2022 of $1.0 million.

The A&R SVB LSA was to mature on December 1, 2025 and consisted of interest-only payments through December 31, 2023. The outstanding principal amount of the term loans accrued interest at a floating rate per year equal to the greater of 7.25% and the prime rate of interest plus 4.0%.

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 December 31, 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 right to obtain a total of 250,000 shares of the Company’s stock at an exercise price of $5.14 per share. The A&R SVB Warrants provide an option for a cashless exercise.

In accordance with ASC 470, Debt, the value of the A&R SVB Warrants and A&R SVB LSA was allocated using a relative fair value allocation. The fair value of the A&R SVB Warrants was determined to be $1.3 million and included in additional paid-in-capital, of which $0.7 million was recognized as a component of the loss on extinguishment and $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 $0.1 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 and ASC 815, 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 A&R 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, which resulted in a loss on extinguishment during the nine months ended September 30, 2021 of less than $0.1 million.

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 and ASC 815, 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

Defined Contribution Retirement Plan

12 Months Ended

Dec. 31, 2022

Defined Contribution Retirement Plan

Defined Contribution Retirement Plan

13. Defined Contribution Retirement Plan

The Company maintains a defined contribution 401(k) retirement plan for its employees, pursuant to which employees may elect to contribute a portion of their compensation on a tax-deferred basis. The Company matches 100% of eligible employee contributions up to 4% of an employee’s salary, subject to the maximum amount permitted by the Internal Revenue Code. The Company’s matching contributions were $0.4 million and $0.3 million for the years ended December 31, 2022 and 2021, respectively.

Legal Proceedings

12 Months Ended

Dec. 31, 2022

Legal Proceedings

Legal Proceedings

14. Legal Proceedings

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 review with the Patent Trial and Appeal Board (the “PTAB”) of the USPTO. One petition was for inter partes review of the ‘901 Patent and sought a determination that the claims in the ‘901 Patent are invalid, and a second petition was for inter partes review of the ‘066 Patent and sought a determination that the claims in the ‘066 Patent are invalid. In October 2020, the PTAB instituted an 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 review with the PTAB relating to the ‘793 Patent, seeking a determination that the claims in the ‘793 Patent are invalid. In August 2021, the PTAB instituted an inter partes review of the ‘793 Patent, finding that the Company had demonstrated a reasonable likelihood that it would prevail with respect to showing that at least one challenged claim of the ‘793 patent is unpatentable as obvious over the combination of certain prior art cited by the Company in its petition to the PTAB. In July 2022, the PTAB 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 was denied in February 2023. United Therapeutics has publicly stated that 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. The Court has ordered that a three-day bench trial will be scheduled for summer of 2023.

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.

Commitments and Contingencies

12 Months Ended

Dec. 31, 2022

Commitments and Contingencies.

Commitments and Contingencies

15. Commitments and Contingencies

Mainbridge Health Care Device Development and Supply Agreement

On December 1, 2022, the Company entered into a Device Development and Supply Agreement (the “Pump Development Agreement”) with Mainbridge Health Partners, LLC (“Mainbridge”) and Sandoz Inc. (“Sandoz”).

The Pump Development Agreement provides for the cooperation between the Company, Sandoz and Mainbridge to develop a new pump that is suitable for the subcutaneous administration of Treprostinil Injection. Mainbridge will perform all development, validation and testing activities required for the pump and related consumables in anticipation of submitting a 510(k) clearance application for the pump to the FDA in 2023. In connection with the Pump Development Agreement, the Company and Sandoz have agreed to pay Mainbridge certain future contingent milestone payments in accordance with the terms and conditions set forth therein.

UNC License Agreement

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.

Chasm Technologies

In March 2012, the Company entered into an agreement, as amended, with Chasm Technologies, Inc. for manufacturing consulting services related to the Company’s manufacturing capabilities during the term of the agreement. The Company agreed to pay future contingent milestones and royalties on net sales totaling no more than $1.5 million, none of which has been earned as of December 31, 2022.

Employment Agreements

The Company has agreements with certain employees which require the funding of a specific level or payments if certain events, such as a change in control or termination without cause, occur.

Purchase Obligations

The Company enters into contracts in the normal course of business with contract service providers to assist in the performance of research and development and manufacturing activities. Subject to required notice periods and obligations under binding purchase orders, the Company can elect to discontinue the work under these agreements at any time. As of December 31, 2022, the Company has non-cancelable commitments for product manufacturing costs of approximately $3.7 million for the year ending 2023.

In addition, the Company has entered into a multi-year supply agreement with LGM Pharma, LLC (LGM) to produce active pharmaceutical ingredients for YUTREPIA. Under the supply agreement with LGM, the Company is required to provide rolling forecasts, a portion of which will be considered a binding, firm order, subject to an annual minimum purchase commitment of $2.7 million for the term of the agreement. The agreement expires five years from the first marketing authorization approval of YUTREPIA.

Other Contingencies and Commitments

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. See Note 14 for further discussion of pending legal proceedings.

In addition to the commitments described above, the Company is party to other commitments, including non-cancelable leases and long-term debt, which are described elsewhere in these financial statements.

Subsequent Events

12 Months Ended

Dec. 31, 2022

Subsequent Events

Subsequent Events

16. Subsequent Events

Revenue Interest Financing Agreement

An additional $7.5 million of the Investment Amount will be funded fifteen business days after a request made by the Company to HCR to fund acquisition of rights, whether in the form of an acquisition, license, joint venture or similar transaction, to a clinical stage or commercial stage biopharmaceutical product to diagnose, prevent, or treat pulmonary hypertension, an additional $35.0 million of the Investment Amount will be funded fifteen business days after the earlier of regulatory approval of YUTREPIA or a favorable determination relating to the asserted patents in the ongoing patent litigation with United Therapeutics, and the remaining $25.0 million of the Investment Amount will be funded fifteen

business days after the mutual agreement of HCR and the Company to fund such amount (the “Fourth Investment Amount”).

As consideration for the Investment Amount and pursuant to the RIFA, the Company has agreed to pay HCR a tiered royalty on annual net revenue of the Company after the first commercial sale of YUTREPIA (the “Revenue Interests”). Except as may otherwise be mutually agreed to in connection with the funding of the Fourth Investment Amount, the applicable tiered percentage will range from 3.60% to 10.00% on the first $250 million on annual net revenue, 1.44% to 4.00% on the next $250 million in annual net revenue, and 0.36% to 1.00% on all annual net revenue in excess of $500 million. The specific royalty rate within such ranges will depend upon the total amount advanced by the HCR and the Company’s achievement of a certain annual net revenue threshold for the calendar year 2025. The Company will also make certain fixed quarterly payments to HCR, plus an additional amount on a ratable basis to reflect the funding of additional amounts by HCR under the RIFA. The Company will be required to make additional payments to HCR in the event that the first commercial sale of YUTREPIA does not occur by June 30, 2025 and certain minimum quarterly royalty payments beginning in 2026.

If HCR has not received cumulative minimum payments from the Company equal to 60% of the amount funded to date by December 31, 2026 or 100% of the amount funded to date by December 31, 2028, the Company must make a cash payment immediately following each applicable date to HCR sufficient to gross HCR up to such minimum amounts after giving full consideration of the cumulative amounts paid to HCR by the Company through each date. The net sale thresholds described above are not to be interpreted as financial guidance or projections for future net sales of the Company.

HCR’s rights to receive the Revenue Interests will terminate on the date on which HCR has received payments equal to 175% of funded portion of the Investment Amount less the aggregate amount of all payments made to HCR as of such date (the “Hard Cap”), plus an amount, if any, that HCR would need to receive to yield an internal rate of return on the funded Investment Amount equal to 18% (the “IRR True-Up Payment”), unless the RIFA is earlier terminated. If a change of control of the Company occurs, HCR may accelerate payments due under the RIFA up to the Hard Cap, plus the IRR True-Up Payment, plus any other obligations payable under the RIFA. Upon the occurrence of an event of default, HCR may accelerate payments due under the RIFA up to the Hard Cap, plus the IRR True-Up Payment, plus any other obligations payable under the RIFA.

The RIFA contains customary affirmative and negative covenants and customary events of default and other events that would cause acceleration, including, among other things, the occurrence of certain material adverse events or the material breach of certain representations and warranties and specified covenants, in which event HCR may elect to terminate the RIFA and require the Company to make payments to HCR equal to the lesser of the Hard Cap, plus any other obligations payable under the RIFA, or the funded portion of the Investment Amount, minus payments received by HCR in respect of the Revenue Interests, plus the IRR True-Up Payment. If the FDA grants final approval to an inhaled treprostinil product therapeutically equivalent to YUTREPIA and HCR has not received 100% of the amount funded by HCR to date, then the Company will be required to make payments to HCR equal to 100% of the amount funded by HCR to date, minus payments received by HCR in respect of the Revenue Interests.

In addition, the RIFA contains a financial covenant that requires us to maintain cash and cash equivalents in an amount at least equal to $7.5 million during the calendar year beginning on January 1, 2024 and at least equal to $15.0 million for the remainder of the payment term after the calendar year ended December 31, 2024.

As of the filing date of this Annual Report on Form 10-K, the Company was not aware of any breach of covenants, occurrence of material adverse event, nor had it received any notice of event of default from HCR.

Basis of Presentation, Summary of Significant Accounting Policies and Going Concern (Policies)

12 Months Ended

Dec. 31, 2022

Basis of Presentation and Summary of Significant Accounting Policies

Basis of Presentation

Consolidation

Use of Estimates

Cash

The Company considers all highly liquid investments with a maturity of three months or less at the date of purchase to be cash equivalents.

Accounts Receivable

Leases

Property, Plant and Equipment


Lab and build-to-suit equipment (years)		5 - 7
Office equipment (years)		5
Furniture and fixtures (years)		10
Computer equipment (years)		3
Leasehold improvements		Lesser of life of the asset or remaining lease term

Long-Lived Assets

Goodwill

The Company completed its annual goodwill impairment test as of July 1, 2022. There have been no significant events or circumstances affecting the valuation of goodwill subsequent to the assessment.

Revenue Recognition from Promotion Agreements

●

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

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.

Segment Information

Research and Development Expense

Patent Maintenance

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 vesting term (see Note 8).

Net Loss Per Share


	Year Ended
	December 31,
	2022	2021
Stock Options	7,757,017	5,234,582
Restricted Stock Units	399,349	259,705
Warrants	445,205	168,767
Total	8,601,571	5,663,054

Certain common stock warrants are included in the calculation of basic and diluted net loss per share since their exercise price is de minimis.

Fair Value of Financial Instruments

Level 1 — Quoted prices in active markets for identical assets or liabilities;

Level 2 — Other than quoted prices included in Level 1 inputs 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.


	Quoted		Significant
	Prices in		Other		Significant
	Active		Observable		Unobservable
	Markets		Inputs		Inputs		Carrying
December 31, 2022	(Level 1)		(Level 2)		(Level 3)		Value
Assets
Money market mutual funds (cash equivalents)	$	92,283	$	—	$	—	$	92,283
Liabilities
A&R Silicon Valley Bank term loan	$	—	$	18,853	$	—	$	19,879


	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

Income Taxes

Recent Accounting Pronouncements

Basis of Presentation, Summary of Significant Accounting Policies and Going Concern (Tables)

12 Months Ended

Dec. 31, 2022

Basis of Presentation and Summary of Significant Accounting Policies

Schedule of Property, Plant and Equipment, Useful Life


Lab and build-to-suit equipment (years)		5 - 7
Office equipment (years)		5
Furniture and fixtures (years)		10
Computer equipment (years)		3
Leasehold improvements		Lesser of life of the asset or remaining lease term

Summary of calculation of diluted net loss per share


	Year Ended
	December 31,
	2022	2021
Stock Options	7,757,017	5,234,582
Restricted Stock Units	399,349	259,705
Warrants	445,205	168,767
Total	8,601,571	5,663,054

Summary of financial assets and liabilities measured at fair value


	Quoted		Significant
	Prices in		Other		Significant
	Active		Observable		Unobservable
	Markets		Inputs		Inputs		Carrying
December 31, 2022	(Level 1)		(Level 2)		(Level 3)		Value
Assets
Money market mutual funds (cash equivalents)	$	92,283	$	—	$	—	$	92,283
Liabilities
A&R Silicon Valley Bank term loan	$	—	$	18,853	$	—	$	19,879


	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 (Tables)

12 Months Ended

Dec. 31, 2022

Property, Plant and Equipment

Schedule of Property, plant and equipment


	December 31,		December 31,
	2022		2021
Lab and build-to-suit equipment	$	6,257	$	6,600
Office equipment		19		19
Furniture and fixtures		134		177
Computer equipment		291		347
Leasehold improvements		11,409		11,457
Construction-in-progress		155		—
Total property, plant and equipment		18,265		18,600
Accumulated depreciation and amortization		(14,114)		(13,583)
Property, plant and equipment, net	$	4,151	$	5,017

Contract Acquisition Costs and Intangible Asset, and Goodwill (Tables)

12 Months Ended

Dec. 31, 2022

Contract Acquisition Costs and Intangible Asset, and Goodwill

Schedule of contract acquisition costs and intangible asset


	December 31, 2022						December 31, 2021
	Gross Carrying Amount		Accumulated Amortization		Net Carrying Amount		Gross Carrying Amount		Accumulated Amortization		Net Carrying Amount
Contract acquisition costs	$	12,980	$	(4,376)	$	8,604	$	12,980	$	(2,842)	$	10,138
Intangible asset	$	5,620	$	(1,894)		3,726	$	5,620	$	(1,230)		4,390

Accrued Expenses and Other Current Liabilities (Tables)

12 Months Ended

Dec. 31, 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:


	December 31,		December 31,
	2022		2021
Accrued compensation	$	2,862	$	3,157
Accrued research and development expenses		1,757		344
Accrued other expenses		903		1,670
Total accrued expenses and other current liabilities	$	5,522	$	5,171

Stockholders' Equity (Tables)

12 Months Ended

Dec. 31, 2022

Stockholders' Equity

Schedule of outstanding warrants

As of December 31, 2022, outstanding warrants consisted of the following:


	Number of
	warrants	Exercise Price		Expiration Date
A&R SVB Warrant - Initial Tranche (see Note 12)	250,000	$	5.14	January 6, 2032
SVB Warrant - Initial Tranche (see Note 12)	100,000	$	3.05	February 26, 2031
SVB Warrant - Term B and Term C Tranches (see Note 12)	100,000	$	n/a	February 26, 2031
Other warrants	65,572	$	0.02	December 31, 2026

Stock-Based Compensation (Tables)

12 Months Ended

Dec. 31, 2022

Schedule of stock-based compensation expense recognized for employees and non-employees


	Year Ended
	December 31,
By Expense Category:	2022		2021
Research and development	$	1,409	$	1,923
General and administrative		7,889		4,823
Total stock-based compensation expense	$	9,298	$	6,746

Schedule of unamortized compensation expense and weighted average remaining recognition period


	As of December 31, 2022
			Weighted
			Average
			Remaining
			Recognition
	Unamortized		Period
	Expense		(Years)
Stock options	$	15,532	2.9
Restricted stock units	$	1,723	2.9

Schedule of assumptions used for estimating the fair value of stock options


	Year Ended
	December 31,
	2022	2021
Expected dividend yield	—	—
Risk-free interest rate	1.46% - 3.96%	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	4,489,277		5.22
Exercised	(233,356)		3.60
Cancelled	(1,455,668)		5.73
Outstanding as of December 31, 2022	8,398,262	$	4.49	8.5	$	17,628
Exercisable as of December 31, 2022	3,327,055	$	4.03	7.8	$	9,442
Vested and expected to vest as of December 31, 2022	7,914,670	$	4.47	8.5	$	16,849

Schedule of additional information related to stock options


	December 31,
	2022		2021
Cash proceeds from options exercised	$	837	$	41
Aggregate intrinsic value of options exercised	$	553	$	21
Fair value of options vested	$	4,427	$	6,169

Schedule of non vested RSU awards outstanding


		Weighted
		Average
		Grant-Date
	Number of	Fair Value
	RSUs	(per RSU)
Unvested as of December 31, 2021	15,204	$	3.31
Granted	503,403		5.64
Vested	(54,181)		4.91
Forfeited	(56,700)		6.25
Unvested as of December 31, 2022	407,726	$	5.57

Employee Stock Purchase Plan

Schedule of assumptions used for estimating the fair value of stock options


		Year Ended
		December 31,
		2022
Expected dividend yield		—
Risk-free interest rate		0.69% - 3.92%
Expected volatility		80% - 129%
Expected life (years)		0.50

Income Taxes (Tables)

12 Months Ended

Dec. 31, 2022

Income Taxes

Schedule of deferred tax assets and liabilities


	2022		2021
Deferred income tax assets:
Tax loss carryforwards	$	59,241	$	57,302
Research and development credits		3,942		4,204
R&D section 174 costs		4,584		—
Share-based compensation		4,637		3,213
Lease liability		1,157		1,627
Compensation		621		800
Fixed assets		369		250
Patent amortization		476		325
Accrued litigation costs		1,546		1,641
Settlement reserve		123		141
Other		2		1
Valuation allowance		(74,549)		(66,987)
Total deferred income tax assets		2,149		2,517
Deferred income tax liabilities:
Section 481(a) adjustment		21		48
Intangible assets		1,546		1,679
Right of use asset		582		790
Total deferred income tax liabilities		2,149		2,517
Total net deferred tax	$	—	$	—

Schedule of federal income tax rate


	2022				2021
			% of				% of
			Pretax				Pretax
	Amount		Earnings		Amount		Earnings
Income tax benefit at statutory rate	$	(8,613)	21.0	%	$	(7,261)	21.0	%
State income taxes, net of federal tax benefit		(1,787)	4.4			(2,626)	7.6
Non-deductible expenses		1	—			—	—
Stock-based compensation		310	(0.8)			286	(0.8)
Credits		—	—			(262)	0.8
Deferred tax true-up		1,159	(2.9)			—	—
Change in state rate		1,368	(3.3)			4,454	(12.9)
Other		—	—			18	(0.1)
Change in valuation allowance		7,562	(18.4)			5,391	(15.6)
Provision for income taxes	$	—	—	%	$	—	—	%

Schedule of recognized uncertain tax benefit


Balance at December 31, 2020	$	403
Increases related to 2021		52
Balance at December 31, 2021		455
Decreases related to 2022		(65)
Balance at December 31, 2022	$	390

Leases (Tables)

12 Months Ended

Dec. 31, 2022

Leases

Lease cost


		Year Ended December 31,
	Classification	2022		2021
Operating lease cost:
Fixed lease cost	Research and development	$	702	$	702
Fixed lease cost	General and administrative		78		78
Finance lease cost:
Amortization of lease assets	Research and development		135		267
Interest on lease liabilities	Interest expense		32		43
Total Lease Cost		$	947	$	1,090


Weighted average remaining lease term (years):
Operating leases	3.8
Finance leases	1.9
Weighted average discount rate:
Operating leases	10.3	%
Finance leases	6.5	%

Lease Liability Maturity


	Operating		Finance
Year ending December 31:	Leases		Leases		Total
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		5,114		374		5,488
Less: Interest		(882)		(22)		(904)
Present value of lease liabilities	$	4,232	$	352	$	4,584

Long-term Debt (Tables)

12 Months Ended

Dec. 31, 2022

Long-Term Debt

Schedule of Long-Term Debt


		December 31,		December 31,
	Maturity Date	2022		2021
A&R Silicon Valley Bank term loan	December 1, 2025	$	19,879	$	—
Silicon Valley Bank term loan	September 1, 2024		—		10,410
Long-term debt		$	19,879	$	10,410

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

- Definition

Tabular disclosure of long-debt instruments or arrangements, including identification, terms, features, collateral requirements and other information necessary to a fair presentation. These are debt arrangements that originally required repayment more than twelve months after issuance or greater than the normal operating cycle of the entity, if longer.

+ References

Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 210
-SubTopic 10
-Section S99
-Paragraph 1
-Subparagraph (SX 210.5-02.22)
-URI https://asc.fasb.org/extlink&oid=120391452&loc=d3e13212-122682

Reference 2: http://www.xbrl.org/2009/role/commonPracticeRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 235
-SubTopic 10
-Section S99
-Paragraph 3
-Subparagraph (SX 210.12-04(a))
-URI https://asc.fasb.org/extlink&oid=120395691&loc=d3e24072-122690

Reference 3: http://fasb.org/us-gaap/role/ref/legacyRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 835
-SubTopic 30
-Section 45
-Paragraph 1A
-URI https://asc.fasb.org/extlink&oid=124435984&loc=d3e28541-108399

Reference 4: http://fasb.org/us-gaap/role/ref/legacyRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 505
-SubTopic 10
-Section 50
-Paragraph 6
-URI https://asc.fasb.org/extlink&oid=126973232&loc=d3e21506-112644

Reference 5: http://www.xbrl.org/2003/role/exampleRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 470
-SubTopic 20
-Section 55
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+ Details

Business (Details) $ in Thousands			12 Months Ended
Business (Details) $ in Thousands	Jan. 27, 2023 USD ($)	Jan. 09, 2023 USD ($) D	Dec. 31, 2022 USD ($)	Dec. 31, 2021 USD ($)
Business
Net loss			$ 41,015	$ 34,579
Accumulated deficit			$ 350,596	$ 309,581
Subsequent Events. \| Revenue Interest Financing Agreement
Business
RIFA, maximum investment amount		$ 100,000
RIFA, initial investment amount	$ 32,500
RIFA, additional investment amount		$ 35,000
Minimum number of days for grant of additional investment amount \| D		15
RIFA, remaining investment amount		$ 25,000
Minimum number of days for grant of remaining investment amount \| D		15
Subsequent Events. \| Revenue Interest Financing Agreement \| A&R Silicon Valley Bank Term Loan
Business
Amount of debt repaid with initial investment from RIFA	22,400
Excess proceeds less transaction costs funded to the Company	$ 700

Basis of Presentation, Significant Accounting Policies and Going Concern - Other (Details)		12 Months Ended
	Aug. 01, 2018 USD ($)	Dec. 31, 2022 USD ($) customer segment	Dec. 31, 2021 customer
Number of reporting units		1
Impairment of long-lived assets		$ 0
Number of operating segments \| segment		1
Sandoz
Fees paid related to the Promotion Agreement	$ 20,000,000.0
Credit Concentration Risk \| Accounts Receivable \| Customer One
Concentration risk, percentage		99.00%	98.00%
Number of customers \| customer		1	1

Basis of Presentation, Significant Accounting Policies and Going Concern - Estimated Useful Lives for Major Asset Categories (Details)	12 Months Ended
	Dec. 31, 2022
Lab and build-to-suit equipment \| Minimum
Property, Plant and Equipment, Useful life (Year)	5 years
Lab and build-to-suit equipment \| Maximum
Property, Plant and Equipment, Useful life (Year)	7 years
Office equipment
Property, Plant and Equipment, Useful life (Year)	5 years
Furniture and fixtures
Property, Plant and Equipment, Useful life (Year)	10 years
Computer equipment
Property, Plant and Equipment, Useful life (Year)	3 years
Leasehold improvements
Property, Plant and Equipment, Estimated Useful life	Lesser of life of the asset or remaining lease term

Basis of Presentation, Significant Accounting Policies and Going Concern - Common Stock Equivalent Shares Excluded From Calculation of Diluted Net Loss Per Share (Details) - shares	12 Months Ended
	Dec. 31, 2022	Dec. 31, 2021
Anti-dilutive Shares Excluded from Calculation of Diluted Net Loss Per Share (in shares)	8,601,571	5,663,054
Stock Options
Anti-dilutive Shares Excluded from Calculation of Diluted Net Loss Per Share (in shares)	7,757,017	5,234,582
Restricted Stock Units
Anti-dilutive Shares Excluded from Calculation of Diluted Net Loss Per Share (in shares)	399,349	259,705
Warrants
Anti-dilutive Shares Excluded from Calculation of Diluted Net Loss Per Share (in shares)	445,205	168,767

Basis of Presentation, Significant Accounting Policies and Going Concern - Fair Value of Financial Assets and Financial Liabilities (Details) - USD ($) $ in Thousands	Dec. 31, 2022	Dec. 31, 2021
A & R Silicon Valley Bank term loan \| Reported Value Measurement
Fair Value of Financial Instruments
Fair value of long-term debt	$ 19,879
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	18,853
Money market mutual funds (cash equivalents) \| Reported Value Measurement
Fair Value of Financial Instruments
Money market funds	92,283	$ 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	$ 92,283	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 - Schedule of Property, plant and equipment (Details) - USD ($) $ in Thousands	Dec. 31, 2022	Dec. 31, 2021
Total property, plant and equipment	$ 18,265	$ 18,600
Accumulated depreciation and amortization	(14,114)	(13,583)
Property, Plant and Equipment, Net, Total	4,151	5,017
Lab and build-to-suit equipment
Total property, plant and equipment	6,257	6,600
Office equipment
Total property, plant and equipment	19	19
Furniture and fixtures
Total property, plant and equipment	134	177
Computer equipment
Total property, plant and equipment	291	347
Leasehold improvements
Total property, plant and equipment	11,409	11,457
Construction-in-progress
Total property, plant and equipment	$ 155	$ 0

Property, Plant and Equipment - Expense (Details) - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2022	Dec. 31, 2021
Property, Plant and Equipment
Depreciation, Depletion and Amortization, Nonproduction, Total	$ 1.4	$ 1.8
Cost of Property Repairs and Maintenance	$ 0.3	$ 0.1

Contract Acquisition Costs and Intangible Asset, and Goodwill (Details) - USD ($) $ in Thousands	3 Months Ended	12 Months Ended
	Dec. 31, 2022	Dec. 31, 2022	Dec. 31, 2021	Dec. 31, 2020
Contract Acquisition Costs and Intangible Asset, and Goodwill
Business Combination, Amortization Expense		$ 1,500	$ 2,700
Amortization of Intangible Assets, Total		700	1,100
Goodwill	$ 3,903	$ 3,903	$ 3,903
Sandoz Agreement \| Contract acquisition costs
Contract Acquisition Costs and Intangible Asset, and Goodwill
Term of Agreement	5 years
Merger With RareGen LLC
Contract Acquisition Costs and Intangible Asset, and Goodwill
Goodwill				$ 3,900

- Definition

Amount after accumulated impairment loss of an asset representing future economic benefits arising from other assets acquired in a business combination that are not individually identified and separately recognized.

+ References + Details

Contract Acquisition Costs and Intangible Asset, and Goodwill - Contract acquisition costs and intangible asset (Details) - USD ($) $ in Thousands	Dec. 31, 2022	Dec. 31, 2021
Contract Acquisition Costs and Intangible Asset, and Goodwill
Contract acquisition costs, Gross Carrying Amount	$ 12,980	$ 12,980
Intangible asset, Gross Carrying Amount	5,620	5,620
Contract acquisition costs, Accumulated Amortization	(4,376)	(2,842)
Intangible asset, Accumulated Amortization	(1,894)	(1,230)
Contract acquisition costs, Net Carrying Amount	8,604	10,138
Intangible asset, Net Carrying Amount	$ 3,726	$ 4,390

Indemnification Asset with Related Party and Litigation Finance Payable (Details)	Mar. 04, 2023
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 Current Liabilities (Details) - USD ($) $ in Thousands	Dec. 31, 2022	Dec. 31, 2021
Accrued Expenses and Other Current Liabilities
Accrued compensation	$ 2,862	$ 3,157
Accrued research and development expenses	1,757	344
Accrued other expenses	903	1,670
Total accrued expenses and other current liabilities	$ 5,522	$ 5,171

Stockholders' Equity (Details) - USD ($) $ / shares in Units, $ in Thousands						12 Months Ended
	Apr. 18, 2022	Apr. 12, 2022	Mar. 31, 2022	Apr. 13, 2021	Nov. 18, 2020	Dec. 31, 2022	Dec. 31, 2021	Feb. 26, 2021
Common Stock and Preferred Stock, Shares Authorized (in shares)						90,000,000
Common Stock and Preferred Stock, Par or Stated Value Per Share (in dollars per share)						$ 0.001
Common Stock, Shares Authorized (in shares)						80,000,000	80,000,000
Preferred Stock, Shares Authorized (in shares)						10,000,000	10,000,000
Value of shares sold						$ 54,461	$ 21,710
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	40,702
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 - Other (Details) - USD ($) $ / shares in Units, $ in Thousands			1 Months Ended	3 Months Ended	12 Months Ended
	Jan. 01, 2023	Jun. 16, 2022	Dec. 31, 2020	Dec. 31, 2021	Dec. 31, 2022	Dec. 31, 2021	Jan. 25, 2022
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Gross (in shares)					4,489,277
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					$ 9,298	$ 6,746
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercises in Period (in shares)					233,356
Cash proceeds from options exercised					$ 837	$ 41
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Grants in Period (in shares)					503,403
Vested (in shares)					54,181
Restricted Stock Units
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Grants in Period (in shares)					503,403
Common Stock
Total shares issued					51,941	270,185
Share Price (in dollars per share)					$ 6.37
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercises in Period (in shares)					232,877	14,699
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)			$ 3.00
Chief Executive Officer \| Stock Options
Modified stock-based compensation					$ 2,900
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		100.00%
Chief Executive Officer \| Share-based Payment Arrangement, Tranche One \| Restricted Stock Units
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		25.00%
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
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Period					4 years
Vested (in shares)					346,339
Dr Saggar \| Restricted Stock Units
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
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Rights, Percentage					50.00%
The 2020 Plan
Share-based Compensation Arrangement by Share-based Payment Award, Percent Annual Increase in Capital Shares Reserved for Future Issuance					4.00%
Share-based Compensation Arrangement by Share-based Payment Award, Number of Additional Shares Authorized (in shares)	2,580,716
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Authorized (in shares)	2,851,611
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Available for Grant (in shares)					270,895
Inducement Plan 2022
Common Stock, Capital Shares Reserved for Future Issuance ( in shares)					12,800		310,000
Employee Stock Purchase Plan
Common Stock, Capital Shares Reserved for Future Issuance ( in shares)	150,000				548,059
Total shares issued					51,941
Share-based Compensation Arrangement by Share-based Payment Award, Purchase Price of Common Stock, Percent					85.00%
Prior Equity Award Plans
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Available for Grant (in shares)					673,880

Stock-Based Compensation - Stock-based Compensation Expense (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2022	Dec. 31, 2021
Stock-based compensation expense	$ 9,298	$ 6,746
Research and Development Expense
Stock-based compensation expense	1,409	1,923
General and Administrative Expense
Stock-based compensation expense	$ 7,889	$ 4,823

Stock-Based Compensation - Unamortized Compensation Expense (Details) $ in Thousands	12 Months Ended
	Dec. 31, 2022 USD ($)
Stock Options
Stock-based awards, unamortized expense	$ 15,532
Stock-based awards, weighted average remaining recognition period (Year)	2 years 10 months 24 days
Restricted Stock Units
Stock-based awards, unamortized expense	$ 1,723
Stock-based awards, weighted average remaining recognition period (Year)	2 years 10 months 24 days

Stock-Based Compensation - Fair Value of Stock Options Granted and Purchase Rights Issued under the ESPP (Details) - $ / shares	12 Months Ended
	Dec. 31, 2022	Dec. 31, 2021
Expected dividend yield	0.00%
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Weighted Average Grant Date Fair Value (in dollars per share)	$ 3.94	$ 2.23
Employee Stock Purchase Plan \| Stock Options
Expected dividend yield
Risk-free interest rate, minimum	1.46%	0.62%
Risk-free interest rate, maximum	3.96%	1.67%
Expected Volatility, minimum	90.00%	91.00%
Expected Volatility, maximum	95.00%	96.00%
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	80.00%
Expected Volatility, maximum	129.00%
Expected life (years)	6 months

Stock-Based Compensation - Stock Option Activity (Details) $ / shares in Units, $ in Thousands	12 Months Ended
	Dec. 31, 2022 USD ($) $ / shares shares
Stock-Based Compensation.
Outstanding, number of shares (in shares) \| shares	5,598,009
Outstanding, weighted average exercise price (in dollars per share) \| $ / shares	$ 4.19
Granted, number of shares (in shares) \| shares	4,489,277
Granted, weighted average exercise price (in dollars per share) \| $ / shares	$ 5.22
Exercised, number of shares (in shares) \| shares	(233,356)
Exercised, weighted average exercise price (in dollars per share) \| $ / shares	$ 3.60
Cancelled, number of shares (in shares) \| shares	(1,455,668)
Cancelled, weighted average exercise price (in dollars per share) \| $ / shares	$ 5.73
Outstanding, number of shares (in shares) \| shares	8,398,262
Outstanding, weighted average exercise price (in dollars per share) \| $ / shares	$ 4.49
Outstanding, weighted average contractual term (Year)	8 years 6 months
Outstanding, aggregate intrinsic value \| $	$ 17,628
Exercisable, number of shares (in shares) \| shares	3,327,055
Exercisable, weighted average exercise price (in dollars per share) \| $ / shares	$ 4.03
Exercisable, weighted average contractual term (Year)	7 years 9 months 18 days
Exercisable, aggregate intrinsic value \| $	$ 9,442
Vested and expected to vest, number of shares (in shares) \| shares	7,914,670
Vested and expected to vest, weighted average exercise price (in dollars per share) \| $ / shares	$ 4.47
Vested and expected to vest, weighted average contractual term (Year)	8 years 6 months
Vested and expected to vest, aggregate intrinsic value \| $	$ 16,849

Stock-Based Compensation - Additional Information (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2022	Dec. 31, 2021
Stock-Based Compensation.
Cash proceeds from options exercised	$ 837	$ 41
Aggregate intrinsic value of options exercised	553	21
Fair value of options vested	$ 4,427	$ 6,169

Stock-Based Compensation - Restricted Stock Units (Details)	12 Months Ended
	Dec. 31, 2022 $ / shares shares
Nonvested, number (in shares)	15,204
Nonvested , weighted average grant date fair value (in dollars per share) \| $ / shares	$ 3.31
Granted, number (in shares)	503,403
Granted , weighted average grant date fair value (in dollars per share) \| $ / shares	$ 5.64
Vested , number (in shares)	(54,181)
Vested , weighted average grant date fair value (in dollars per share) \| $ / shares	$ 4.91
Forfeited, number (in shares)	(56,700)
Forfeited , weighted average grant date fair value (in dollars per share) \| $ / shares	$ 6.25
Nonvested , number (in shares)	407,726
Nonvested , weighted average grant date fair value (in dollars per share) \| $ / shares	$ 5.57
Restricted Stock Units
Granted, number (in shares)	503,403

Revenue From Contracts With Customers (Details) - Sandoz - USD ($) $ in Millions		12 Months Ended
	Aug. 01, 2018	Dec. 31, 2022	Dec. 31, 2021
Promotion Agreement, Payment	$ 20.0
Percentage of Revenue from Promotion Agreement		98.00%	99.00%
Contract with Customer, Refund Liability		$ 0.5	$ 0.5

Income Taxes (Details) - USD ($)	12 Months Ended
Income Taxes (Details) - USD ($)	Dec. 31, 2022	Dec. 31, 2021
Income Tax Expense (Benefit), Total	$ 0	$ 0
Valuation Allowance, Deferred Tax Asset, Increase (Decrease), Amount	7,600,000
Unrecognized Tax Benefits, Income Tax Penalties and Interest Accrued, Total	0	0
Unrecognized Tax Benefits, Income Tax Penalties and Interest Expense, Total	0	0
Federal Income Tax
Income Tax Expense (Benefit), Total	0	0
Operating Loss Carryforwards, Subject to Expiration		278,700,000
Tax Credit Carryforward, Amount		4,300,000
State Income Tax
Income Tax Expense (Benefit), Total	$ 0	0
Operating Loss Carryforwards, Subject to Expiration		$ 304,100,000

- Definition

Amount of current income tax expense (benefit) and deferred income tax expense (benefit) pertaining to continuing operations.

+ References + Details

Income Taxes - Components of Deferred Assets and Liabilities (Details) - USD ($) $ in Thousands	Dec. 31, 2022	Dec. 31, 2021
Income Taxes
Tax loss carryforwards	$ 59,241	$ 57,302
Research and development credits	3,942	4,204
R&D section 174 costs	4,584	0
Share-based compensation	4,637	3,213
Lease liability	1,157	1,627
Compensation	621	800
Fixed assets	369	250
Patent amortization	476	325
Accrued litigation costs	1,546	1,641
Settlement reserve	123	141
Other	2	1
Valuation allowance	(74,549)	(66,987)
Total deferred income tax assets	2,149	2,517
Section 481(a) adjustment	21	48
Intangible assets	1,546	1,679
Right of use asset	582	790
Total deferred income tax liabilities	2,149	2,517
Total net deferred tax	$ 0	$ 0

Income Taxes - Income Tax Expense (Details) - USD ($)	12 Months Ended
Income Taxes - Income Tax Expense (Details) - USD ($)	Dec. 31, 2022	Dec. 31, 2021
Income Taxes
Income tax benefit at statutory rate	$ (8,613,000)	$ (7,261,000)
Income tax benefit at statutory rate, percentage	21.00%	21.00%
State income taxes, net of federal tax benefit	$ (1,787,000)	$ (2,626,000)
State income taxes, net of federal tax benefit, percentage	4.40%	7.60%
Non-deductible expenses	$ 1,000	$ 0
Non-deductible expenses, percentage	0.00%	0.00%
Share-based compensation	$ 310,000	$ 286,000
Share-based compensation, percentage	(0.80%)	(0.80%)
Credits	$ 0	$ (262,000)
Credits, percentage	0.00%	0.80%
Deferred tax true-up	$ 1,159,000	$ 0
Deferred tax true-up, percentage	(2.90%)	0.00%
Change in state rate	$ 1,368,000	$ 4,454,000
Change in state rate, percentage	(3.30%)	(12.90%)
Other	$ 0	$ 18,000
Other, percentage	0.00%	(0.10%)
Change in valuation allowance	$ 7,562,000	$ 5,391,000
Change in valuation allowance, percentage	(18.40%)	(15.60%)
Provision for income taxes	$ 0	$ 0
Provision for income taxes, percentage	0.00%	0.00%

Income Taxes - Uncertain Tax Benefit (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2022	Dec. 31, 2021
Income Taxes
Beginning balance	$ 455	$ 403
Increases related to current period		52
Decreases related to current period	(65)
Ending balance	$ 390	$ 455
North Carolina corporate income tax rate	2.50%
North Carolina corporate income tax rate expected by 2030	0.00%
Income tax expense due to the reduction in value of the North Carolina deferred tax assets as a result of the 2021 Appropriations Act	$ 5,700

Leases - Other (Details) - ft²	Dec. 31, 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) - USD ($) $ in Thousands	12 Months Ended
Leases - Cost (Details) - USD ($) $ in Thousands	Dec. 31, 2022	Dec. 31, 2021
Leases
Total Lease Cost	$ 947	$ 1,090
Research and Development Expense
Leases
Fixed lease cost	702	702
Amortization of lease assets	135	267
General and Administrative Expense
Leases
Fixed lease cost	78	78
Interest Expense
Leases
Interest on lease liabilities	$ 32	$ 43

Leases - Remaining Lease Term and Discount Rates (Details)	Dec. 31, 2022
Leases
Weighted average remaining lease term, Operating leases	3 years 9 months 18 days
Weighted average remaining lease term, Finance leases	1 year 10 months 24 days
Weighted average discount rate, Operating leases	10.30%
Weighted average discount rate, Finance leases	6.50%

Leases - Future Minimum Lease Payments (Details) $ in Thousands	Dec. 31, 2022 USD ($)
Operating Leases
2023	$ 1,283
2024	1,317
2025	1,356
2026	1,158
Total minimum lease payments	5,114
Less: Interest	(882)
Present value of lease liabilities	4,232
Finance Leases
2023	195
2024	115
2025	64
2026	0
Total minimum lease payments	374
Less: Interest	(22)
Present value of lease liabilities	352
Total
2023	1,478
2024	1,432
2025	1,420
2026	1,158
Total minimum lease payments	5,488
Less: Interest	(904)
Present value of lease liabilities	$ 4,584

Long-term Debt - Summary (Details) - USD ($) $ in Thousands	Dec. 31, 2022	Dec. 31, 2021
Long-Term Debt
Long-term debt	$ 19,879	$ 10,410
A&R Silicon Valley Bank Term Loan
Long-Term Debt
Long-term debt	$ 19,879
Silicon Valley Bank Term Loan
Long-Term Debt
Long-term debt		$ 10,410

- Definition

Amount, excluding unamortized premium (discount) and debt issuance cost, of long-term debt. Excludes lease obligation.

+ References + Details

Long-term Debt - Terms (Details) $ / shares in Units, $ in Thousands						9 Months Ended		12 Months Ended
	Jan. 27, 2023 USD ($)	Jan. 09, 2023 USD ($)	Jan. 07, 2022 USD ($) tranche $ / shares shares	Mar. 01, 2021 USD ($)	Feb. 26, 2021 USD ($) $ / shares shares	Sep. 30, 2022 USD ($)	Sep. 30, 2021 USD ($)	Dec. 31, 2022 USD ($) $ / shares shares	Dec. 31, 2021 USD ($)
Long-Term Debt
Loss on extinguishment of debt								$ 997	$ 53
Repayments of debt								10,500	10,353
Long-term debt, noncurrent								$ 19,879	$ 10,410
Subsequent Events. \| Revenue Interest Financing Agreement
Long-Term Debt
Revenue Interest Financing Agreement, Maximum Investment Amount		$ 100,000
Revenue Interest Financing Agreement, Initial Investment Amount	$ 32,500
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
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
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
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			4.00%
Term A Loan
Long-Term Debt
Debt Instrument, Face Amount				$ 10,500
A&R Silicon Valley Bank Term Loan
Long-Term Debt
Maximum Borrowing Capacity			$ 40,000
A&R Silicon Valley Bank Term Loan \| Subsequent Events. \| Revenue Interest Financing Agreement
Long-Term Debt
Repayments of Debt	$ 22,400
A&R Silicon Valley Bank Term Loan \| Maximum
Long-Term Debt
Debt Issuance Costs, Noncurrent, Net			100
Amended and Restated Loan and Security Agreement Tranche One
Long-Term Debt
Proceeds from Lines of Credit			$ 20,000

Long-term Debt - SVB Warrant Fair Value (Details)	Dec. 31, 2022 Y
A&R SVB Warrants \| Measurement Input, Risk-free interest rate
Long-Term Debt, Fair Value of Warrant
Warrants and Rights Outstanding, Measurement Input	1.76
A&R SVB Warrants \| Measurement Input, Expected volatility
Long-Term Debt, Fair Value of Warrant
Warrants and Rights Outstanding, Measurement Input	97.2
A&R SVB Warrants \| Measurement Input, Expected life (years)
Long-Term Debt, Fair Value of Warrant
Warrants and Rights Outstanding, Measurement Input	10.0
SVB Warrant \| Measurement Input, Risk-free interest rate
Long-Term Debt, Fair Value of Warrant
Warrants and Rights Outstanding, Measurement Input	1.43
SVB Warrant \| Measurement Input, Expected volatility
Long-Term Debt, Fair Value of Warrant
Warrants and Rights Outstanding, Measurement Input	90.8
SVB Warrant \| Measurement Input, Expected life (years)
Long-Term Debt, Fair Value of Warrant
Warrants and Rights Outstanding, Measurement Input	10.0

Defined Contribution Retirement Plan (Details) - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2022	Dec. 31, 2021
Defined Contribution Retirement Plan
Defined Contribution Plan, Employer Matching Contribution, Percent of Match	100.00%
Maximum percentage of an employee's salary matched by the Company	4.00%
Defined Contribution Plan, Cost	$ 0.4	$ 0.3

Legal Proceedings (Details) $ in Thousands	Nov. 06, 2020 USD ($)
Liquidia PAH and Sandoz \| UTC and Smiths Medical Litigation \| Pending Litigation
Legal Proceedings
Proceeds from Legal Settlements	$ 4,250

Commitments and Contingencies (Details)	12 Months Ended
Commitments and Contingencies (Details)	Dec. 31, 2022 USD ($)
Maximum Net Sales Threshold As Basis For Payment Of Future Contingent Royalties	$ 1,500,000
Net sales earned relating to payment of future contingent royalties	0
Non-cancelable commitments for product manufacturing costs	3,700,000
Agreement With LGM Pharma, LLC
Purchase Commitment, Remaining Minimum Amount Committed	$ 2,700,000

Subsequent Events (Details) $ in Millions	Jan. 27, 2023 USD ($)	Jan. 09, 2023 USD ($) D
On First Two Hundred and Fifty Million Annual Revenue \| Subsequent Events.
Subsequent Events
RIFA, annual net revenue, threshold		$ 250.0
On Second Two Hundred and Fifty Million Annual Revenue \| Subsequent Events.
Subsequent Events
RIFA, annual net revenue, threshold		250.0
In Excess of Five Hundred Million Annual Revenue \| Subsequent Events.
Subsequent Events
RIFA, annual net revenue, threshold		$ 500.0
Funding Amount by December 31, 2026 \| Subsequent Events.
Subsequent Events
RIFA, minimum payment to be made, percentage		60
Minimum \| Subsequent Events.
Subsequent Events
RIFA, percentage of royalty payment on annual net revenue		3.60
Minimum \| On Second Two Hundred and Fifty Million Annual Revenue
Subsequent Events
RIFA, minimum payment to be made, percentage		1.44
Maximum \| Subsequent Events.
Subsequent Events
RIFA, percentage of royalty payment on annual net revenue		10.00
Maximum \| On Second Two Hundred and Fifty Million Annual Revenue
Subsequent Events
RIFA, minimum payment to be made, percentage		4.00
Revenue Interest Financing Agreement \| Subsequent Events.
Subsequent Events
RIFA, maximum investment amount		$ 100.0
RIFA, initial investment amount	$ 32.5
Revenue Interest Financing Agreement, Additional Investment Amount to Obtain Acquisition of Rights		$ 7.5
Minimum Number of Days For Grant of Additional Investment Amount to Obtain Acquisition of Rights \| D		15
RIFA, additional investment amount		$ 35.0
Minimum number of days for grant of additional investment amount \| D		15
RIFA, remaining investment amount		$ 25.0
Minimum number of days for grant of remaining investment amount \| D		15
RIFA, Hard Cap percentage		175
Percentage of investment amount to be repaid on final approval		100
Percentage of investment amount to be paid		100
RIFA, internal rate of return		18.00%
Minimum cash and cash equivalents required to be maintained during year two		$ 7.5
Minimum cash and cash equivalents required to be maintained after year two		$ 15.0
Revenue Interest Financing Agreement \| Funding Amount by December 31, 2026 \| Subsequent Events.
Subsequent Events
RIFA, minimum payment to be made, percentage		100
Revenue Interest Financing Agreement \| Minimum \| In Excess of Five Hundred Million Annual Revenue \| Subsequent Events.
Subsequent Events
RIFA, Hard Cap percentage		0.36
Revenue Interest Financing Agreement \| Maximum \| In Excess of Five Hundred Million Annual Revenue \| Subsequent Events.
Subsequent Events
RIFA, Hard Cap percentage		1.00
A&R Silicon Valley Bank Term Loan \| Revenue Interest Financing Agreement \| Subsequent Events.
Subsequent Events
Amount of debt repaid with initial investment from RIFA	22.4
Excess proceeds less transaction costs funded to the Company	$ 0.7