Patrick S. Kityo, 43, of Newtonville, has agreed to plead guilty to one count of aiding the preparation of a false tax return. A plea hearing has not yet been scheduled by the Court.

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According to the charging documents, Kityo owned and operated a home health care company named Every Step Home Care Inc. (Every Step).  It is alleged that, during the years 2016 and 2017, Every Step’s total gross receipts were at least $2 million.  Kityo, however, allegedly failed to report all of Every Step’s gross receipts to his tax preparer.  Instead, it is alleged that Kityo only reported those gross receipts that Kityo deposited into Every Step’s business bank account and did not report those he received via checks written to Kityo personally.  As a result, Kityo allegedly caused his tax preparer to underreport nearly $2 million in gross receipts and Kityo allegedly failed to pay at least $306,603 in personal income taxes.

The charge of aiding the preparation of a false tax return provides for a sentence of up to three years in prison, one year of supervised release, and a fine of up to $250,000. Sentences are imposed by a federal district court judge based upon the U.S. Sentencing Guidelines and statutes which govern the determination of a sentence in a criminal case.

Acting United States Attorney Joshua S. Levy and Harry Chavis, Jr., Special Agent in Charge of the Internal Revenue Service’s Criminal Investigation in Boston, made the announcement. Assistant U.S. Attorney James R. Drabick of the Securities, Financial & Cyber Fraud Unit is prosecuting the case.

The details contained in the charging documents are allegations. The defendant is presumed innocent unless and until proven guilty beyond a reasonable doubt in a court of law.

For all of the FAA’s recent efforts to promote advanced air mobility (AAM) services in American airspace and chip away at China’s growing influence on the industry, the agency and U.S. lawmakers may be disappointed by a recent piece of news: A Chinese company appears set to obtain the world’s first electric vertical takeoff and landing (eVTOL) type certification.

EHang, a Guangzhou-based manufacturer of autonomous eVTOL aircraft for passenger transport and tourism services, announced it has completed all planned tests and flights of its EH216-S two-seater in the last phase of demonstrating compliance of its technology.

The flight test regimen included a definitive final demonstration for the Civil Aviation Authority of China (CAAC), which eliminated the last obstacle on the aircraft’s path to type certification, according to the company. EHang expects to obtain that approval “soon” after it wraps up a handful of final procedures.

“This achievement marks a significant, unprecedented milestone in the global emerging eVTOL industry, underscoring our unwavering dedication and pioneering advantages,” said Huazhi Hu, founder, chairman, and CEO of EHang. “Additionally, this sets the stage for us to secure the type certificate soon and proceed with our endeavors to initiate commercial operations.”

The CAAC also approved EHang’s Unmanned Aircraft Cloud System (UACS) for trial operations, representing another key step toward the entry into service Hu alluded to. The system is expected to be an important component of the company’s operations and will help customers orchestrate multiple aircraft, manage airspace and flight plans, and more.

The two announcements represent a blow to U.S. eVTOL firms and aviation regulators that are hoping to be the first to launch AAM services in 2025. EHang, however, is expected to enter service as early as this year or next, starting with China and Japan. 

The company currently ranks fifth on SMG Consulting’s AAM Reality Index, which measures an AAM manufacturer’s likelihood of certifying their aircraft, entering service, and producing thousands of units per year. It’s the top AAM company looking to serve the tourism industry.

Certifying the EH216-S

The next step for EHang will be obtaining type certification for its eVTOL, a small, wingless, fully autonomous design unlike most others in development. By and large, manufacturers, such as Archer Aviation and Lilium, are building larger, winged models to be flown by an onboard pilot.

EH216-S will carry two passengers at low altitude on short- and medium-haul routes. It has a 485-pound payload and an 18.5 sm (16 nm) range when fully loaded. The aircraft cruises at around 62 mph (54 knots) and can hit a top speed of 80 mph (69.5 knots), making it slower than most models expected to enter service.

A coaxial dual-propeller architecture makes the design light and reduces the space and structural components required to install propellers and motors. Its eight foldable arms house 18 lift-and-thrust rotors. Notably, it lacks fixed wings, a staple of most eVTOL models.

EHang’s three core design philosophies for EH216-S are full redundancy, an autonomous pilot, and a centralized command and control center. In addition to redundant batteries, the eVTOL includes backups for all major flight components, multiple flight control systems, and a built-in fail-safe system that allows a remote pilot to take over in case of emergency.

Though it’s capable of flying entirely on its own, EH216-S uses 4G and 5G wireless transmission to communicate with a command and control center. As mentioned, the center lets remote pilots step in as needed, but it also monitors and displays real-time flight data such as battery level, altitude, speed, and position. It centralizes the routing, dispatch, and management of multiple flight routes and aircraft flying simultaneously, giving operators a firm grip on their activities.

The CAAC officially accepted EHang’s type certification application for EH216-S in January 2021. Over the past 30-plus months, the company has completed over 9,300 low-altitude tourism flight trials in 18 Chinese cities, including the mega-metropolises of Guangzhou and Shenzhen. It also completed Japan’s first passenger-carrying flight of an autonomous eVTOL in February.

EHang has tested the aircraft’s load, durability, reliability, and environmental impact, flying it under low and high temperatures and in high humidity, salt spray, and even typhoon conditions. It also evaluated batteries, electronics, software, the data link to the ground control station, and other components to demonstrate they meet CAAC airworthiness and safety standards.

EH216-S’s recent demonstration before CAAC marked the final milestone before it can achieve type certification.

“I believe the remaining procedures will be finished very soon before the official authorization of the type certificate,” said Hu. “It will pave the way for our commercial operations in the next stage.”

UACS Approval Adds Momentum

Cloud software has become a critical safeguard for the secure and efficient operation of unmanned aircraft. Just about every eVTOL manufacturer has some form of this technology, and EHang is no exception.

The company’s UACS manages airspace, aircraft, and flight plans and operators, including “cluster management” for the safe operation of multiple aircraft in the same airspace. Now, a CAAC letter of approval for trials signifies it meets China’s civil aviation standards. According to EHang, the tech will be a key component of service following type certification.

“From unmanned aerial vehicle systems to the UACS, as well as operating teams and service platforms, EHang has made comprehensive and sufficient preparation for the upcoming commercial operations after years of planning,” said Hu. “With EHang’s long-term accumulated advantages, we are confident and well positioned to embark on a new chapter of UAM operations with our partners.”

Hu indicated that favorable CAAC rulemaking and an array of partnership with city governments position the company well to integrate and operate its services when the time comes. 

The most recent of those partnerships is an agreement with the Bao’an District Government of Shenzhen to jointly develop urban air mobility use cases and systems, as well as routes for low-altitude demonstrations. The Bao’an District will provide support for EH216-S procurement, financial leasing, infrastructure construction, and low-altitude operations in Shenzhen.

The ultimate goal of the partnership is to turn the metropolis into a “national low-altitude economy development demonstration city.” EHang plans to establish its first Operation Demonstration Center there and to eventually launch aerial tourism and sightseeing services with its eVTOL. The partners hope to develop more than 10 routes by year’s end.

If all goes according to plan, EHang will beat Archer, Joby Aviation, Wisk Aero, and other U.S. rivals to market—albeit outside of the U.S. and European markets. While that’s only part of the battle, the company appears well positioned to capitalize on its early entry. 

According to SMG, it had just over 1,400 EH216-S orders as of June—that’s more than every AAM manufacturer besides Embraer’s Eve Air Mobility and the U.K.’s Vertical Aerospace, which is now contending with a prototype accident that threatens to further delay certification.

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MORRISVILLE, N.C., Aug. 10, 2023 (GLOBE NEWSWIRE) -- Liquidia Corporation (NASDAQ: LQDA) (Liquidia or the Company) today reported financial results for the second quarter ended June 30, 2023. The Company will host a webcast at 8:30 a.m. ET to discuss the financial results and provide a corporate update.

Dr. Roger Jeffs, Liquidia’s Chief Executive Officer, said: “This quarter saw Liquidia significantly advance our mission to become the leading inhaled treprostinil provider for pulmonary hypertension patients. Achievements of note include: 1) the affirmation by the U.S. Court of Appeals for the Federal Circuit (CAFC) that all claims of the No. 9,593,066 (‘066 patent) are invalid or not infringed, 2) the filing of an amendment to add PH-ILD to the YUTREPIA label, and 3) the license of L606 from Pharmosa Biopharm to develop and commercialize a sustained-release liposomal formulation of treprostinil for twice-daily nebulization. With these achievements in mind, we we will continue to prepare for a potential launch of YUTREPIA in the near future, both for PAH and subsequently PH-ILD.”

Corporate Updates

Advanced litigation with United Therapeutics. With the decision of the CAFC issued in July with respect to the Hatch-Waxman litigation between Liquidia and United Therapeutics Corporation (UTHR), only one of the three patents originally asserted against Liquidia in Hatch-Waxman litigation, U.S. Patent No. 10,716,793 (‘793 Patent), remains gating to final approval for YUTREPIA. In July 2022, the Patent Trial and Appeal Board (PTAB) found the ‘793 Patent to be unpatentable due to the existence of prior art as cited in the inter partes review filed by Liquidia. The PTAB then re-affirmed that decision in February 2023, and UTHR appealed the decision to the CAFC. Briefing in the appeal should be completed in fourth quarter 2023 and oral arguments will be heard on the next available date in the oral argument calendar, expected to be late fourth quarter 2023 to early 2024. Once argued, the CAFC could rule within a few days, in the case of summary affirmance, or within a few months after oral argument if a full written opinion is issued. If affirmed by the CAFC, the PTAB’s decision would override any earlier finding of infringement, and Liquidia would immediately seek final regulatory approval for YUTREPIA.

Submitted amendment to add PH-ILD indication to tentatively approved new drug application (NDA) for YUTREPIA. The U.S. Food and Drug Administration (FDA) had previously confirmed that the additional PH-ILD indication would not require any new clinical efficacy data. If approved, YUTREPIA would be indicated for the treatment of both PAH and PH-ILD, though final approval of the PH-ILD indication cannot occur until the new clinical investigation exclusivity granted to Tyvaso® expires on March 31, 2024. Concurrent with this amendment, Liquidia also submitted a paragraph IV certification indicating that the patents listed for Tyvaso® in the FDA’s publication commonly known as the Orange Book are invalid and/or not infringed by YUTREPIA. All Orange Book patents previously asserted by United Therapeutics have already been found to be invalid or not-infringed as decided by U.S. District Court, confirmed on appeal, or by the PTAB, pending the appeal described above.

Expanded pipeline through partnership with Pharmosa Biopharm to develop L606 in North America. In June, Liquidia acquired an exclusive license to develop and commercialize L606, an inhaled, sustained-release, liposomal formulation of treprostinil currently being evaluated in a Phase 3 open-label clinical trial for the treatment of PAH and PH-ILD. L606 offers potential advantages of (a) less frequent dose administrations, (b) more consistent drug exposure over 24 hours, including sleeping hours, (c) improved tolerability via lower peak exposure, and (d) improved portability via a modern, next-gen nebulizer. Liquidia will be responsible for development, regulatory and commercial activities of L606 in North America, while Pharmosa will manufacture clinical and commercial supplies of L606 and support Liquidia’s effort to establishing a redundant global supply chain. Pending input from the FDA from a planned Type B meeting later this year, Liquidia intends to initiate a Phase 3 randomized, placebo-controlled study in 2024 to evaluate treatment of PH-LD patients with L606.

Second Quarter 2023 Financial Results

Cash totaled $88.2 million as of June 30, 2023, compared to $93.3 million as of December 31, 2022.

Revenue was $4.8 million for the three months ended June 30, 2023, compared to $3.9 million for the three months ended June 30, 2022. Revenue related primarily to the promotion agreement between Liquidia PAH and Sandoz Inc, sharing profit derived from the sale of Sandoz’s substitutable generic treprostinil injection (Treprostinil Injection) in the United States. The increase of $0.9 million was primarily due to favorable gross-to-net chargeback and rebate adjustments.

Cost of revenue was $0.7 million for both the three months ended June 30, 2023, and 2022. Cost of revenue related to the promotion agreement as noted above.

Research and development expenses were $17.7 million for the three months ended June 30, 2023, compared to $5.2 million for the three months ended June 30, 2022. The increase of $12.5 million or 239% was primarily due to a $10.0 million upfront payment owed to Pharmosa for the exclusive license in North America to develop and commercialize L606. Additionally, there was a $2.2 million increase in expenses related to our YUTREPIA program driven by higher manufacturing and supply costs.

General and administrative expenses were $9.2 million for the three months ended June 30, 2023, compared to $6.9 million for the three months ended June 30, 2022. The increase of $2.3 million or 33% was primarily due to a $1.3 million increase in consulting and personnel expenses in preparation for the potential commercialization of YUTREPIA, a $0.7 million increase in legal fees related to our ongoing YUTREPIA-related litigation, and a $0.6 million increase in stock-based compensation expense.

Total other expense, net was $0.7 million for the three months ended June 30, 2023, compared with $0.5 million for the three months ended June 30, 2022. Liquidia incurred an increase of $0.9 million in interest expense attributable to the higher borrowings under the Revenue Interest Financing Agreement with HealthCare Royalty Partners as compared to balances outstanding under the Amended and Restated Loan and Security Agreement with Silicon Valley Bank, and a $0.7 million increase in interest income attributable to higher money market yields.

Net loss for the three months ended June 30, 2023, was $23.5 million, or $0.36 per basic and diluted share, compared to a net loss of $9.4 million, or $0.15 per basic and diluted share, for the three months ended June 30, 2022.  

About YUTREPIA™(treprostinil) inhalation powder

YUTREPIA is an investigational, inhaled dry powder formulation of treprostinil delivered through a convenient, low-resistance, palm-sized device. On November 5, 2021, the FDA issued a tentative approval for YUTREPIA, which is indicated for the treatment of pulmonary arterial hypertension (PAH) to Excellerate exercise ability in adult patients with New York Heart Association (NYHA) Functional Class II-III symptoms. The FDA has confirmed that YUTREPIA may add the indication to treat pulmonary hypertension with interstitial lung disease (PH-ILD) without additional clinical studies. YUTREPIA was designed using Liquidia’s PRINT® technology, which enables the development of drug particles that are precise and uniform in size, shape, and composition, and that are engineered for enhanced deposition in the lung following oral inhalation. Liquidia has completed INSPIRE, or Investigation of the Safety and Pharmacology of Dry Powder Inhalation of Treprostinil, an open-label, multi-center phase 3 clinical study of YUTREPIA in patients diagnosed with PAH who are naïve to inhaled treprostinil or who are transitioning from Tyvaso® (nebulized treprostinil). YUTREPIA was previously referred to as LIQ861 in investigational studies.

About L606 (liposomal treprostinil) inhalation suspension

L606 is an investigational, liposomal formulation of treprostinil administered twice-daily with a short-duration next-generation nebulizer. The L606 suspension uses Pharmosa Biopharma’s proprietary liposomal formulation to encapsulate treprostinil which can be released slowly at a controlled rate into the lung, enhancing drug exposure over an extended period of time and reducing local irritation of the upper respiratory tract. L606 is currently being evaluated in an open-label study in the United States for treatment of pulmonary arterial hypertension (PAH) and pulmonary hypertension associated with interstitial lung disease (PH-ILD) with a planned pivotal study for the treatment of PH-ILD.

About Treprostinil Injection

Treprostinil Injection is the first-to-file, fully substitutable generic treprostinil for parenteral administration. Treprostinil Injection contains the same active ingredient, same strengths, same dosage form and same inactive ingredients as Remodulin® (treprostinil) and is offered to patients and physicians with the same level of service and support, but at a lower price than the branded drug. Liquidia PAH promotes the appropriate use of Treprostinil Injection for the treatment of PAH in the United States in partnership with its commercial partner, who holds the Abbreviated New Drug Application (ANDA) with the FDA.

About pulmonary arterial hypertension (PAH)

Pulmonary arterial hypertension (PAH) is a rare, chronic, progressive disease caused by hardening and narrowing of the pulmonary arteries that can lead to right heart failure and eventually death. Currently, an estimated 45,000 patients are diagnosed and treated in the United States. There is currently no cure for PAH, so the goals of existing treatments are to alleviate symptoms, maintain or Excellerate functional class, delay disease progression, and Excellerate quality of life.

About pulmonary hypertension associated with interstitial lung disease (PH-ILD)

Pulmonary hypertension (PH) associated with interstitial lung disease (ILD) includes a diverse collection of up to 150 different pulmonary diseases, including interstitial pulmonary fibrosis, chronic hypersensitivity pneumonitis, connective tissue disease related ILD, and chronic pulmonary fibrosis with emphysema (CPFE) among others. Any level of PH in ILD patients is associated with poor 3-year survival. A current estimate of PH-ILD prevalence in the United States is greater than 60,000 patients, though population growth in many of these underlying ILD diseases is not yet known due to factors including underdiagnosis and lack of approved treatments until March 2021, when inhaled treprostinil was first approved for this indication.

About Liquidia Corporation

Liquidia Corporation is a biopharmaceutical company focused on the development and commercialization of products in pulmonary hypertension and other applications of its PRINT® Technology. The company operates through its two wholly owned subsidiaries, Liquidia Technologies, Inc. and Liquidia PAH, LLC. Liquidia Technologies has developed YUTREPIA™ (treprostinil) inhalation powder for the treatment of pulmonary arterial hypertension (PAH) and pulmonary hypertension associated with interstitial lung disease (PH-ILD). Liquidia Technologies is also developing L606, an investigational liposomal formulation of treprostinil administered twice-daily with a short-duration next-generation nebulizer, for use in North America. Liquidia PAH provides the commercialization for pharmaceutical products to treat pulmonary disease, such as generic Treprostinil Injection. For more information, please visit www.liquidia.com.

Tyvaso® is a registered trademarks of United Therapeutics Corporation.

Cautionary Statements Regarding Forward-Looking Statements

This press release may include forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. All statements contained in this press release other than statements of historical facts, including statements regarding our future results of operations and financial position, our strategic and financial initiatives, our business strategy and plans and our objectives for future operations, are forward-looking statements. Such forward-looking statements, including statements regarding clinical trials, clinical studies and other clinical work (including the funding therefor, anticipated patient enrollment, safety data, study data, trial outcomes, timing or associated costs), regulatory applications and related submission contents and timelines, including the potential for final FDA approval of the NDA for YUTREPIA, the timeline or outcome related to appeals arising from our patent litigation in the U.S. District Court for the District of Delaware or inter partes review proceedings conducted at the PTAB, the issuance of patents by the USPTO and our ability to execute on our strategic or financial initiatives, involve significant risks and uncertainties and actual results could differ materially from those expressed or implied herein. The favorable decisions of the PTAB in the IPR for the ’793 patent and of the Court and CAFC in the Hatch-Waxman litigation are not determinative of the outcome of any appeal of those decisions. The words “anticipate,” “believe,” “continue,” “could,” “estimate,” “expect,” “intend,” “may,” “plan,” “potential,” “predict,” “project,” “should,” “target,” “would,” and similar expressions are intended to identify forward-looking statements. We have based these forward-looking statements largely on our current expectations and projections about future events and financial trends that we believe may affect our financial condition, results of operations, business strategy, short-term and long-term business operations and objectives and financial needs. These forward-looking statements are subject to a number of risks discussed in our filings with the SEC, including the impact of the coronavirus (COVID-19) outbreak on our Company and our financial condition and results of operations, as well as a number of uncertainties and assumptions. Moreover, we operate in a very competitive and rapidly changing environment and our industry has inherent risks. New risks emerge from time to time. It is not possible for our management to predict all risks, nor can we assess the impact of all factors on our business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements we may make. In light of these risks, uncertainties and assumptions, the future events discussed in this press release may not occur and actual results could differ materially and adversely from those anticipated or implied in the forward-looking statements. Nothing in this press release should be regarded as a representation by any person that these goals will be achieved, and we undertake no duty to update our goals or to update or alter any forward-looking statements, whether as a result of new information, future events or otherwise.

Contact Information

Media & Investors:

Jason Adair

Chief Business Officer

919.328.4400

jason.adair@liquidia.com

Liquidia Corporation

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