On October 7, 2026, the Third Circuit entered a decision (1) affirming the grant of summary judgment dismissing the antitrust and state unfair competition claims, citing our procompetitive conduct; (2) reversing the District Court’s finding that we breached our contract with Sandoz and remanding these claims to the District Court; and (3) reversing the District Court’s dismissal of the tortious interference claims, and remanding these claims to the District Court.
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As more fully discussed below, on October 13, 2026, we entered into a settlement agreement with Liquidia Technologies, Inc. (Liquidia) (the Settlement Agreement) that provides for, among other terms, the settlement of all claims related to this matter in exchange for a $ 10.0 million payment by us to Liquidia. In exchange for this payment, Liquidia agreed to obtain any third-party approvals and consents, including from Sandoz, necessary to secure dismissal of the litigation. We made the $ 10.0 million payment to Liquidia on October 16, 2026. The case was dismissed by the District Court on October 28, 2026.
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As a result of the Settlement Agreement, we recorded a $ 66.5 million reversal of the previously accrued liability, resulting in a remaining liability of $ 10.0 million as of September 30, 2026. We recorded the reversal within selling, general, and administrative in our consolidated statements of operations for the three and nine months ended September 30, 2026, and classified the remaining liability within other current liabilities in our consolidated balance sheet as of September 30, 2026.
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On September 30, 2026, the U.S. District Court for the District of Delaware ruled that Yutrepia infringes two valid claims of the ‘327 patent. The claims of the ’327 patent generally cover improving exercise capacity in patients suffering from PH-ILD by inhaling treprostinil at specific dosages.
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On October 13, 2026, we entered into the Settlement Agreement, under which we and Liquidia agreed to seek dismissal with prejudice of all of the foregoing actions (except that we may continue to pursue our claims against Dr. Roscigno). The parties also agreed to releases that become effective upon: (1) our receipt of the $ 185.0 million payment from Liquidia described below and Liquidia’s receipt of the $ 10.0 million payment from us described above; (2) our receipt of a Liquidia officer’s declaration confirming cessation of marketing, promotion, distribution, sales, and offers for sale of Yutrepia bearing the PH-ILD indication following regulatory approval of the label amendment; and (3) dismissal of the covered proceedings. Key terms of the Settlement Agreement include the following:
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• Liquidia agreed to pay us an aggregate of $ 330.4 million, consisting of: (1) $ 185.0 million, representing an estimate of damages for past sales of Yutrepia for PH-ILD, which we received on October 19, 2026; and (2) $ 145.4 million, representing an agreed estimate of damages for continuing sales of Yutrepia to PH-ILD patients after execution of the Settlement Agreement, payable in two equal installments of $ 72.7 million each on or before February 1, 2027 and April 30, 2027. We expect to recognize a gain of $ 330.4 million within total other income, net in our consolidated statements of operations in the fourth quarter of 2026.
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• Liquidia agreed to immediately file with the FDA a supplement to its new drug application for Yutrepia to remove the PH-ILD indication and references to PH-ILD from the product’s labeling, and to diligently and urgently pursue FDA approval of that amendment. Such a supplement had already been filed by Liquidia on October 1, 2026, as a result of the District Court decision in the ’327 patent infringement case. Pending FDA approval of the label amendment, Liquidia may continue to sell Yutrepia under its current labeling subject to the Settlement Agreement, but Liquidia must immediately cease, desist, and terminate all activities related to the marketing, advertising, promotion, proactive medical education, and detailing of Yutrepia for the treatment of PH-ILD. Upon FDA approval of the label amendment, Liquidia must immediately cease all sales of Yutrepia bearing the PH-ILD indication.
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• Going forward, Liquidia agreed that it will only market, detail, and promote Yutrepia to healthcare practitioners who, to Liquidia’s knowledge, treat patients with PAH. Liquidia must send letters to healthcare practitioners advising that PH-ILD patients prescribed Yutrepia should be transitioned to an alternative therapy and to specified payers requesting immediate denial of prior authorization requests for Yutrepia for PH-ILD, and must instruct its sales force to no longer use marketing and detailing information containing any reference to PH-ILD or the INCREASE study. With immediate effect, Liquidia must include a mandatory certification with a checkbox that must be completed on any referral form, voucher application, prescription, or similar document for Yutrepia certifying that the patient has Group 1 PAH (or, in the future, any additional indication for which Yutrepia has received FDA approval), and require healthcare practitioners to certify the accuracy of the form. Liquidia must also send letters to all pharmacies carrying Yutrepia instructing them to include the mandatory Group 1 PAH certification on their own referral forms and to obtain verbal attestations from healthcare practitioners for pending referrals on old forms or forms lacking the certification. Liquidia must also terminate cohorts of its ASCENT clinical trial of Yutrepia that are studying PH-ILD as promptly as practicable, cease and desist from publishing any new data, and cease and desist disseminating already-published data, from cohorts of the ASCENT trial that are studying PH-ILD until after the expiration of the ’327 patent.
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• The parties have also agreed to certain covenants not to sue each other, and Liquidia agreed not to challenge certain of our patents subject to certain exceptions.
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Unless earlier terminated, the Settlement Agreement expires on the later of (1) the expiration of our applicable patents containing a valid claim directed to PH-ILD; and (2) the expiration of the last valid claim of the applicable Liquidia patents. The applicable patents include our ’327 and ’782 patents and the ’494 patent for Liquidia, together with the related patents and patent applications specified in the Settlement Agreement. The labeling, promotional, and patent-challenge obligations described above expire on the earlier of the end of the term and the expiration of our applicable patents containing a valid claim directed to PH-ILD.
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We also believe that Boehringer has failed to adequately plead viable causes of action against us. On August 20, 2026, we filed a motion to dismiss the complaint and filed our opening brief in support of that motion on September 21, 2026. On September 11, 2026, we filed a motion to stay discovery that Boehringer had initiated on August 7, 2026. On September 25,
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2026, before responding to our motion to dismiss, Boehringer filed its opposition to our motion to stay discovery, and simultaneously filed a motion to expedite discovery, more than two months after initiating the lawsuit and seven weeks after serving discovery. On October 5, 2026, the court denied both Boehringer’s motion to expedite discovery and our motion to stay discovery and on October 22, 2026, Boehringer filed an amended complaint, and the parties are engaged in discovery.
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We entered into an Exclusive License Agreement, dated November 15, 2018 (the License Agreement), with Arena Pharmaceuticals, Inc., a subsidiary of Pfizer Inc. (Arena). The License Agreement granted to us perpetual, irrevocable, and exclusive rights to develop, manufacture, and commercialize ralinepag in exchange for (1) an upfront payment of $ 800.0 million paid on January 24, 2019; (2) a one-time milestone payment of $ 250.0 million for the first, if any, marketing approval we receive in the United States for an inhaled version of ralinepag to treat PAH; (3) a one-time milestone payment of $ 150.0 million for the first, if any, marketing approval we receive in any of Japan, France, Italy, the United Kingdom, Spain, or Germany for an oral version of ralinepag to treat any indication; and (4) low double-digit, tiered royalties on net sales of any pharmaceutical product containing ralinepag as an active ingredient, subject to certain adjustments for third-party license payments.
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On November 3, 2026, we entered into an amendment to the License Agreement and made a lump-sum payment of $ 525.0 million to Arena in exchange for eliminating our obligation to pay royalties on future net sales of any pharmaceutical product containing ralinepag as an active ingredient (the Royalty Substitution Payment), including, if approved, ralinepag extended-release tablets and ralinepag DPI. We expect to recognize an expense of $ 525.0 million within research and development in our consolidated statements of operations in the fourth quarter of 2026 in connection with the Royalty Substitution Payment. Milestone payment obligations pursuant to the License Agreement remain in place.
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• The parties’ compliance with, and the implementation and impact of, our settlement agreement with Liquidia Technologies, Inc. (Liquidia), including the timing and receipt of remaining payments, the removal of PH-ILD from the Yutrepia label, and the potential impact on sales of Nebulized Tyvaso and Tyvaso DPI for PH-ILD;
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We recently agreed to settle patent litigation with Liquidia concerning Yutrepia. Specifically, we alleged that Yutrepia infringes a patent we own covering the treatment of PH-ILD to improve exercise capacity in patients suffering from PH-ILD by inhaling treprostinil at specific dosages. On September 30, 2026, the District Court ruled that Liquidia’s product infringes two valid claims of this patent. As a result of this decision, on October 1, 2026, Liquidia filed a supplement to its NDA to remove the PH-ILD indication from the Yutrepia labeling. Under our settlement agreement with Liquidia (Settlement Agreement), Liquidia is required to diligently seek approval of this updated label. In addition, our Settlement Agreement permits Liquidia to continue to sell Yutrepia under its current labeling, but must immediately cease, desist, and terminate all activities related to the marketing, advertising, promotion, proactive medical education, and detailing of Yutrepia for the treatment of PH-ILD. Upon FDA approval of the label amendment, Liquidia must immediately cease all sales of Yutrepia bearing the PH-ILD indication. We believe this outcome will result in an increase in the number of patients being prescribed Nebulized Tyvaso and Tyvaso DPI for PH-ILD, although the timing and extent of this impact is uncertain as it is unclear to what extent Yutrepia will continue to be used off-label to treat PH-ILD. Under our settlement agreement, Liquidia also agreed to pay us $330.4 million as an estimate of past and future damages resulting from infringing sales of its product.
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Nebulized Tyvaso Inhaled PPF Phase 3 TETON-PPF study enrollment complete Worldwide
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August 2026, with 754 patients. We expect topline data from the TETON-PPF study will be available in the second half of 2027.
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We previously conducted a separate study, known as the PERFECT study, of Nebulized Tyvaso in patients with PH-COPD. While that study was not successful, we have designed the SUMMIT study with learnings from the PERFECT study, including the design of the trial and the patient inclusion criteria, and we also believe an SMI device may provide benefits not seen in the PERFECT study as the SMI device technology is already widely used by COPD patients to administer bronchodilator treatments.
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In June 2026, we submitted an NDA to the FDA seeking approval to market ralinepag extended-release tablets for PAH. In August 2026, we were notified that the FDA had accepted our NDA and established a user fee goal date of June 24, 2027.
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We currently rely on a single contract manufacturer, ScinoPharm Taiwan, Ltd. (ScinoPharm), to produce ralinepag active pharmaceutical ingredient (API), including the API intended for our planned initial commercial supply of ralinepag tablets. In late September 2026, we were notified that the FDA had classified the outcome of a current Good Manufacturing Practices (cGMP) inspection of ScinoPharm’s facility as “Official Action Indicated” (OAI), meaning that the facility is in an unacceptable state of compliance, and that the FDA may consider regulatory and/or administrative actions. The FDA has indicated that satisfactory resolution of the deficiencies identified in this inspection of the ScinoPharm facility, likely confirmed by the FDA after a cGMP reinspection and/or a preapproval inspection, will be required before the FDA can approve our NDA for ralinepag tablets.
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We are in ongoing discussions with ScinoPharm about the potential impact of the FDA’s findings on the FDA’s review of our NDA and ScinoPharm’s plan to restore compliance at their facility. As discussed in Part II, Item 1A - Risk Factors, our ability to control regulatory compliance by third-party manufacturers is limited. There can be no assurance that ScinoPharm’s facility will be determined compliant, or that any required subsequent FDA inspections can be completed before the anticipated June 2027 action date for our ralinepag NDA. If the FDA does not determine that the facility is in compliance with cGMP requirements in the manufacture of ralinepag API, it may issue a complete response letter (CRL) with respect to our NDA, which could delay the approval and launch of the ralinepag extended-release tablets.
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We are working to qualify our Silver Spring, Maryland facility to manufacture our primary commercial supply of ralinepag API, and also evaluating alternative third-party manufacturers. However, qualifying any new manufacturing source is a lengthy and uncertain process that likely will not be completed in advance of the anticipated June 2027 action date for our ralinepag NDA.
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(1) Excluding impairment of PP&E and litigation accrual. See Impairment of PP&E and litigation accrual sections below.
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Litigation accrual. The changes in litigation accrual for the three and nine months ended September 30, 2026, as compared to the same periods in 2025, were primarily due to the reversal of a previously accrued liability related to the Sandoz litigation matter, which we agreed to settle in October 2026 in connection with our Settlement Agreement with Liquidia. The Sandoz litigation matter was dismissed on October 28, 2026. See Note 12 - Litigation, to our consolidated financial statements.
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In July 2025, our Board of Directors (Board) approved a share repurchase program authorizing up to $1.0 billion in aggregate repurchases of our common stock. Subsequently, in March 2026, our Board approved a share repurchase program authorizing up to $2.0 billion in aggregate repurchases of our common stock. Under these share repurchase program authorizations, we executed a combination of accelerated share repurchases and Rule 10b5-1 trading plan repurchases. As of September 30, 2026, we had fully utilized the $3.0 billion authorized under the share repurchase programs approved by our Board in July 2025 and March 2026.
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See Note 9 - Stockholders’ Equity - Share Repurchases, to our consolidated financial statements.
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Risk Factors
associated with the cleanup of the release of hazardous materials and such liability could have a material adverse effect on our business.
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not infringe our patents. In addition, patent laws of foreign jurisdictions may not protect our patent rights to the same extent as the United States’ laws.
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Other information
On November 3, 2026 (the Amendment Effective Date), we entered into the Arena Amendment, which amends the Exclusive License Agreement, dated November 15, 2018 (the License Agreement), with Arena. Under the License Agreement, we hold exclusive rights to develop, manufacture, and commercialize ralinepag.
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In exchange for these rights, we agreed to pay Arena (1) an upfront payment of $800.0 million, which was paid on January 24, 2019; (2) a one-time milestone payment of $250.0 million upon the first marketing approval, if any, in the United States of an inhaled version of ralinepag to treat pulmonary arterial hypertension; (3) a one-time milestone payment of $150.0 million upon the first marketing approval, if any, in any of Japan, France, Italy, the United Kingdom, Spain, or Germany of an oral version of ralinepag for any indication; and (4) low double-digit, tiered royalties on net sales of any pharmaceutical product containing ralinepag as an active ingredient, subject to certain adjustments for third-party license payments.
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Under the Arena Amendment, we paid Arena a lump-sum, non-refundable payment of $525.0 million on the Amendment Effective Date (the Royalty Substitution Payment) in exchange for the elimination of our obligation to pay royalties on net sales of any product containing ralinepag, including, if approved, ralinepag extended-release tablets and ralinepag DPI. Milestone payment obligations remain in place.
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We expect to recognize the $525.0 million Royalty Substitution Payment as research and development expense, during the fourth quarter of 2026.
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The foregoing description of the Arena Amendment does not purport to be complete and is qualified in its entirety by reference to the Arena Amendment, a copy of which is filed as Exhibit 10.1 to this Quarterly Report on Form 10-Q and incorporated herein by reference.
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