Is it a Wise Move to Buy Liquidia Corp. (LQDA) Shares?

Arquitos Capital Management, an investment management firm, released its second-quarter 2025 investor letter. During the period, the fund delivered a net return of 13.1%, bringing year-to-date gains to an impressive 28.8% as of June 30, 2025. The firm highlighted that individual investor returns may differ depending on the timing of capital inflows, and encouraged clients to review their statements for personalized results. In addition, you can check the fund’s top 5 holdings to find out its best picks for 2025. A copy of Arquitos Capital Management’s Q2 2025 investor letter is available for download here.

One of the companies mentioned in the letter is Liquidia Corporation (NASDAQ:LQDA). Liquidia Corporation (NASDAQ:LQDA) operates as a biopharmaceutical company that develops, manufactures, and commercializes various products for unmet patient needs in the United States. Over the past month, Liquidia Corporation (NASDAQ:LQDA) rose by -19.40%, but its shares gained 120.85% of their value over the last 12 months. On September 22, 2025, Liquidia Corporation (NASDAQ:LQDA) shares closed at $22.90, with a market capitalization of $1.922 billion.

Here is what they have to say about Liquidia Corporation (NASDAQ:LQDA) in their investor letter:

"Liquidia Corporation (NASDAQ:LQDA) has navigated a complex landscape for years, marked by patent disputes and FDA approval delays for their flagship drug, Yutrepia. Today, everything is about Yutrepia’s product launch and their prospects to penetrate a previously monopolistic market. For Liquidia, that uncertainty has always been a buying opportunity. Shares are 200% higher today than our original purchase price more than three years ago. Yutrepia finally received FDA approval for Yutrepia in late May and officially launched soon thereafter. Interestingly, despite this significant milestone, Liquidia's stock price experienced a dramatic but temporary dip, falling from over $19 in early June to $12.46 by the end of the second quarter. This decline was primarily driven by investor apprehension regarding the initial commercial rollout and concerns about a potential competitor still years away from market entry.

Since then, the narrative has rapidly changed again and today shares trade for nearly $18. Initial reports for Yutrepia's June prescription numbers are exceptionally strong and well above expectations. While it's still early days, this robust start validates our confidence in Liquidia management's sales force and their go-to-market strategy, confirming the significant unmet need Yutrepia addresses in the market. I first highlighted Liquidia in our Q4 2022 letter. The issues then were a variety of patent disputes with competitor United Therapeutics.

To date, United Therapeutics has failed in each of those legal cases but had succeeded in delaying Liquidia’s launch and FDA approval. Lawfare worked extremely well in this situation. There are still two long-shot legal challenges from United Therapuertics. Both of these cases are highly likely to be resolved in Liquidia’s favor. But, as we have seen in this long saga, anything can happen. Fortunately, with Yutrepia now on the market, these legal tactics are far less impactful than before.

Beyond legal issues, Liquidia shares had dropped in early June due to the announcement of a successful phase two trial from a potential future competitor. On June 10, 2025, a company named Insmed announced outstanding results for its experimental PAH therapy. Both Liquidia and United Therapeutics shares dropped in response while Insmed shares rose more than 40%. Insmed’s drug, TPIP, is a dry powder treprostinil drug administrated via an inhaler and designed to be a once-daily treatment. As a reminder, Liquidia’s Yutrepia delivers treprostinil via an inhaler three to five times a day. Obviously, all things being equal, a once daily treatment would be much more attractive to patients, which is why the results hurt Liquidia’s stock price..." (Click here to continue reading)

Liquidia Corporation (NASDAQ:LQDA) is not included in our list of the 30 most popular stocks among hedge funds. According to our data, 43 hedge fund portfolios held positions in Liquidia Corporation (NASDAQ:LQDA) at the end of the first quarter of 2025, up from 39 in the previous quarter. LQDA misses Q2 2025 earnings expectations, posting an EPS of $-0.49 compared to the forecast of $-0.43. While we acknowledge the potential of LQDA as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you're looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock.

In another article, we covered Liquidia Corporation (NASDAQ:LQDA) and Jared Holz’s views on the company. In addition, please check out our hedge fund investor letters Q2 2025 page for more investor letters from hedge funds and other leading investors.

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Disclosure: None. This article is originally published at Insider Monkey.