Theravance Biopharma, Inc. Price & Performance (TBPH)

And our hospital performance was excellent. With doses up 49% year over year. With ampreloxetine, we achieved solid enrollment in cypress throughout the quarter and remain on track with our development timelines. In December, we had a positive exchange with the FDA, which reaffirmed our expectation [indiscernible] We learned that two abstracts have been accepted for oral presentation at the upcoming American Academy of Neurology meeting in April. And we completed market research underscoring the potential for ampreloxetine to address significant unmet needs of patients with MSA and symptomatic NoH. Finally, based on twenty twenty four TRELEGY net sales reported by GSK, we've earned a $50,000,000 milestone payment from Royalty Pharma. We continue to manage our expenses carefully and delivered full year results which fell within our guidance ranges. I'll cover our strategic priorities on Slide five. For YUPELRI, we continue to focus on growing revenue while increasing brand In addition, there's a potential for a near term $25,000,000 sales milestone in The U. S. As well as milestone and royalty income from China once approved. With ampraloxetine, we're moving towards completing enrollment the open label portion of the CYPRES study, while simultaneously preparing for an expedited NDA filing. We plan to request priority review in order to bring the much needed potential treatment to patients as quickly as possible.

We'll continue to build awareness of NoH within the MSA community. Turning to TRELEGY where there's a potential of an additional $150,000,000 of milestone in the coming twenty four months plus the considerable value of our retained interest in TRELEGY royalties. We remain dedicated to maximizing the value of TRELEGY and committed to returning excess capital to our shareholders. We'll continue to build on our recent track record of strong expense management and capital discipline to deliver sustainable value to our investors. I'll now turn the presentation over to Rhonda to cover YUPELRI's performance in the quarter. Rhonda, Thanks, Rick. Beginning on Slide seven, I'm pleased to report that the Theravance Beatrice commercial partnership having driven YUPALRI net sales growth of 10% in the quarter reaching approximately $67,000,000 and full year sales of $239,000,000 With QUPEL rerecording its highest level of profitability since launch, The growth in Q4 was primarily driven by a 9% increase in demand. Additionally, pricing continued to be favorable compared to the first half of twenty twenty four in demonstrating effective pricing strategy execution as well as an improved channel mix. Meaning stronger demand in the higher margin channels aligning with our brand objectives. While the record high net sales this quarter closely tracked with demand generation, I will remind you that we traditionally experience seasonal dips in reported net sales as we transition from the fourth quarter to the first quarter of the following year.

Turning to Slide eight. Continue to experience considerable momentum in the hospital setting which exemplifies the strength and effectiveness of the Theravance Hospital selling capability. During the quarter, there were 285,000 UPON doses pulled through to hospital customers. Up 49% year over year. In addition, we continue to broaden our base of formulary wins and therapeutic interchange protocols. Achieving the highest annual gain since pre COVID and resulting in an increase long acting net market share of nearly 20% by the end of the fourth quarter. Strong hospital performance remains critical to our overall brand strategy, specifically in transitioning patients from the hospital to the community setting. Where YUPALRI's long acting NIM market share may To summarize on Slide nine, YUPALRIA delivered another strong year of net sales growth. Up 8% in 2024 and driven by an impressive full year 11% growth in demand. Additionally, we're encouraged by the potential sales milestones in The U. S. Along with the extended IP protection to 02/1939 and the opportunity for future milestones in royalties in China.

At this point, I'll turn things over to Aziz for an update on [indiscernible] Thanks, Rhonda. I'll start on Slide 11 where I'll discuss our potential to earn milestones for TRELEGY. In 2024, GSK reported full year sales of $3,500,000,000 dollars up 26% year over year which triggered a $50,000,000 milestone payment to Theravance. With cash receipt received this month Going forward, given the grant's continued growth trajectory, and consensus being well above the required thresholds, we believe there is a high probability of achieving the higher end of milestones in both 2025 and 2026, totaling an additional $150,000,000 On Slide 12, I'll comment on our royalty interest in Trelegy. In mid-twenty twenty nine, we will start to receive royalties based on ex U. S. Sales. And in January 2031 start to receive royalties based on U. S. Sales.

As a reminder, these royalties expire on a country by country basis to later of fifteen years after commercial launch or until expiration of the longest lived patent. To give you a sense of the potential financial implications for Theravance, we've outlined consensus net sales on the right hand side of the slide. Based on these projections, we expect to receive several hundred million of cumulative royalties starting in 2029 and lasting through the duration of the royalty terms. Combining these royalties with $150,000,000 of probable milestones over the next two years represents a significant and durable source of value to the company. With that, I'll pass it to Anya to provide an Amparoxetine update. [indiscernible] Thanks, Aziz. I'll begin the development update on the top of Slide 14. We continue to focus on important academic as we near the completion of enrollment in the CYPRES study.

We have observed a solid month over month enrollment rate over the last quarter, This progress keeps us on track to achieve our objective of enrolling the final pay the middle of this year I'm disclosing top line results of the study approximately six months later. We are very pleased to announce that we've had two abstracts accepted for oral presentation at the upcoming American Academy of Neurology Annual Meeting scheduled to take place this April in San Diego. Our first oral presentation will focus on the analysis of CUPINE blood pressure measured in a home with a twenty four hour ambulatory blood pressure monitor the gold standard method for detecting two point hypertension, allowing us to assess the impact of ambrelocetine on coupon blood pressure the double blind randomized controlled Study 169. The second oral presentation looked at orostatic blood pressures and venous norepinephrine levels and allows for detailed analysis of the mechanism of action of ampreloxidine in the previous randomized withdrawal study, Turning now to the bottom of the slide, I also want to provide an update on where we stand with preparation for the amperolostatine NDA.

We are very encouraged by our recent Type C interactions with the FDA in December of last year where we reaffirmed alignment on key requirements for a full approval should the Slicer's study be positive.

In this interaction, we covered important pre NDA topics, including content of NDA and our data analysis lab. This represents another important milestone on our journey to advance Amperlog NoH in patients with MSA. We are well positioned to complete key modules of the NDA in advance of the cypress readout and then be poised for an expedited regulatory filing should CIPRIS be positive. We also intend to request a priority review at the time of filing. Now I'll turn the call back to Rhonda to highlight some of the work we've been doing in support of our launch preparedness. Rhonda?

Thanks, Sonya. Focusing on Slide 15, as part of our launch preparation efforts supporting disease education and awareness, and our work developing product positioning we have been actively engaged with the MSA community. Today, I'd like to share with you some of the early results of our market research, which supports the high unmet need for an improved In Q4, we conducted a blinded survey of 200 board certified neurologists and cardiologists who are treating patients with MSA and are familiar with NoH symptoms. As you see on the left hand side, of Slide 15, the vast majority of those we surveyed agreed that there is a significant need for better NoH therapies. With over seventy percent of neurologists indicating that they strongly agreed.

On the right, we asked these physicians to rank different attributes that they consider to be most important in selecting a new treatment for NoH. Effectiveness and improving NoH symptoms ranked highest. Followed closely by the ability to improve a patient's quality of life and durability in maintaining symptom improvements. Finally, safety and tolerability including avoiding worsening of supine hypertension also ranked amongst the top five most important attributes, Next, we turn to Slide 16, which highlights ampreloxetine's target product profile. This profile is based on the results in the MSA subpopulation from the previous Phase three study and closely matches the market research respondents ranked desired attributes. [indiscernible] on this assumption and if FDA approved, camperolostine could provide a differentiated new treatment option with a meaningful improvement in OHSA composite scores positive impact on patients' daily activities of living and durable effectiveness. Market research also suggests that ampreloxetine small once daily pill without the need for dose titration is another point of differentiation. As this could provide a better experience especially for patients with MSA who often have difficulty swallowing. Lastly, as shown in the graph on the right, ampreloxetine's target product profile has the potential to address the high unmet need in the NoH population of FDA The majority of physicians had a favorable view of Amphrolox blinded target product profile with ninety percent of neurologists and eighty percent of cardiologists signaling they are likely to prescribe such a product if available.

The results from our initial market research coupled with discussions with neurologists and advocacy organizations have reinforced our belief in the significant impact could have on the estimated forty thousand patients with MSA in The U. S. Suffering with NoH symptoms. Now I will turn the presentation back to Aziz to cover the financials.

Thanks, Rhonda. Let's begin with the quarterly results. Slides eighteen and nineteen cover the detailed financials. On Slide 20, I'll highlight our quarterly performance, we generally exceeded expectations and stayed within all financial guidance ranges for the full year. In the fourth quarter, collaboration revenue grew by 8% to approximately $19,000,000 dollars and YUPELRI brand level cash profitability reached its highest level to date. Operating expenses excluding share based comp increased to $22,000,000 this quarter This was due to incremental commercial and medical affairs Ben, on amperoloxetine pre launch activities and increased R and D expenses due to an uptick in SYYPRIS patient enrollment. As mentioned for the year, R and D SG and A and share based comp expense were all within our full year financial guidance ranges. We utilized $3,000,000 of cash this quarter and $14,000,000 for the full year aligning with our goal of maintaining a strong balance sheet. While progressing towards the completion of the Cipher study. We ended the year with $88,000,000 of cash which excludes the $50,000,000 Cotologie milestone cash receipt [indiscernible] On Slide 21, I'll provide our 2025 financial guidance. First, we're guiding to R and D expense excluding share based comp of between $32,000,000 and 38,000,000 This reflects the completion of the Cipher study with clinical trial costs decreasing in the second half of the year offset by one time incremental spend to facilitate the majority to facilitate the completion of a majority of the NDA prior to data readout.

Second, we expect slight growth to our SG and A expense driven by measured investments for ampreloxetine. In areas such as market research, market access and medical affairs. In preparation for potential NDA filing. For the year, we expect total SG and A expense excluding share based comp to be between $50,000,000 and $60,000,000 Third, we expect share based comp to decrease year over year to a range of $18,000,000 to 20,000,000 driven by continued cost cutting initiatives. And finally, we expect non GAAP losses and cash burn to be similar to 2024 levels, where we had non GAAP losses of 16,000,000 and cash burn of $14,000,000 For both metrics, we anticipate higher levels in the first half of the year with improvements coming in the second half.

And as Rhonda has mentioned, Q1 collaboration revenue will be impacted by typical YUPELRI seasonality we've experienced over the past several years. Lastly, our accounting treatment for the TRELEGY milestones has been updated to reflect recent changes to accounting guidelines. We will now only recognize other income if cumulative milestones exceed $194,000,000 For example, achieving the remaining $150,000,000 of milestones would result in only $6,000,000 of other income recognized in 2026 with no other income recognized in 2024 and 2025. As a reminder, this accounting treatment has no impact on cash receipt which we expect in Q1 of each year. With that, I'll pass it back to Rick to conclude. Thanks Aziz. To summarize on Slide 22, we entered 2025 in a strong financial position with a compelling outlook for shareholders. We ended the year with $88,000,000 in cash, excluding the $50,000,000 we just received from Royalty Pharma no debt and up to another hundred and 50,000,000 in Trelegy, related potential milestones in the near term. We're also increasingly optimistic regarding the value that Trelegy royalties may bring to the company and remain committed to ensuring our shareholders benefit directly from our financial success. Thanks to the hard work our employees and our partner Beatrice we're well positioned to continue driving YUPELRI growth for the foreseeable future.

With strong demand generation and a winning patient centered strategy. We're optimistic regarding the growing contributions to Theravance, Which Not Only Include Our Share Of U. S. Profits, but meaningful royalties in China and potential near term milestones in both territories. Finally, I'd highlight the transformation continue to complete continue to expect to complete enrollment in the open label portion of Cypress by mid-twenty twenty five with top line data expected approximately six months later. Based on the results we've generated to date, as well as feedback from the community and market research, we believe ampreloxetine has the potential to deliver meaningful clinical benefits to many patients with MSA who suffer debilitating symptoms of NLH. We thank you for your continued support and ready to take your questions. Operator, Thank you, sir. And our first question comes from the line of Douglas Tsao from H. C. Wainwright. Your question please.

Hi, good afternoon. Thanks for taking questions and congrats on the progress.

Maybe as a starting point, I guess I would like to hear a little bit more from Rhonda about what really drove so much of the success in the just sort of a follow through on some of the execution or sort of some of the initiatives you've had ongoing or was there anything in particular that led to this real sort of step up in performance?

Thanks, Doug. Really, always appreciate your questions. On the hospital front, the team is executing the strategy very clearly. And to see the wins in larger systems and that these systems are now more frequently, not always, but more frequently coming with therapeutic interchange as part of the initial formulary approval that brings additional volume as I think you already appreciate You will see a doubling of market share in those formulary approval. So team is executing. Know where to go They have a strategy of not only ensuring that concomitant use becomes adopted in protocols, and then following on with that to ensure if there's opportunity with converting short acting nebulized use to long acting that certainly follows through.

So we're just very, very pleased with what our small team of 14 have been able to accomplish, particularly this last quarter.

And Rhonda, I guess on the third GD interchange side, I'm just curious, I mean, how long when did those wins occur? And did you sort of anticipate seeing this improvement or just maybe not quite as early just because sort of the magnitude or sort of the inflection [indiscernible] Impressive.

It starts with knowing who to focus on and then it takes a full team effort with starting with national accounts and having C suite discussions. With ensuring that when requested that the medical team can provide the clinical information that necessary for completing the dossier submission for formulary review. And then once approved, that's when the sales team is certainly there to ensure the pull through recognizing the clinicians, whether they're hospitalists, [indiscernible] or the pulmonologist specialist and the discharge team understand the access meaning formulary is approved, so product is available. And that everyone involved knows how to use it. And then ensuring that these patients are leaving the hospital with what they were exposed to in the hospital with their YUPELRI script in hand so that they continue their maintenance care post. So it's It's It's the execution again. Knowing where to prioritize the effort.

And then one final one for me, if I can. I know you talked a lot about sort of improvements and focus on the channel mix to improve the gross to net. And I think sort of some of that improvement seems to have happened maybe faster than you expected. And I guess I'm just curious sort of the trajectory we should expect to see on that front into 2025?

Well, as we've commented in the past, in partnership with Beatrice, [indiscernible] not only starts with effective execution, but also ensuring their contracting discipline along the way. And effective pricing strategy. So we certainly did comment that it would take Probably more into 2025 before you would see more right siding of that. I think that strategy of pricing coupled with that improvement in channel mix, meaning getting to those higher margin volumes pushing through or being pulled through, that's what's driving the improvement. And we're very pleased about it obviously.

Okay, great. Thank you.

Thank you. And our next question comes from the line of Julien Harrison from BTIG. Your question please.

Hi, good afternoon. Congrats on a very strong end to 2024 and for taking my questions. Thank you for taking my questions.

It looks like 4Q was really a standout quarter on the hospital side.

Kind of related to the last questions asked. I'm wondering if you could comment on any follow through of that trajectory or trend you saw in 4Q into the first two months of twenty twenty five?

Well Rhonda, you want to take that?

Julian, not to get ahead of ourselves as as a comment in Q1 can typically be a softer quarter. I think everyone's quite aware of what's happening, particularly on the hospital front. Relative to RSV, flu and census being high in the hospitals. So I think the demonstrated need of ensuring that having product access to YUPELRI is is paying off and that's also Whether I would probably classify that as unfortunate giving patients having difficulties there's a need. So I do think that is a tailwind for us.

Okay, great. Thank you. And then you remind us of the next steps for YUPELRI in China? Are you just waiting for a regulatory decision there? With your partner Beatrice? Do you have an approximate sense of the timing of next steps too?

Definitely, it's the waiting for the regulatory commentary back to the Beatrice team. And for planning assumptions as we've stated in the past.

That two year window is what we typically would expect from time of submission to approval. So that's still what we're operating under.

And as a reminder that, so basically, in June of twenty twenty four, so last year, so two years from then, would be middle of next year is kind of the baseline assumption for that.

That obviously triggers a $7,500,000 milestone and then then very high 14% to 20% royalties on any potential sales in the market.

Excellent. That's helpful. And then finally, I'm just curious if you could talk more about your recent feedback from the FDA on ampreloxetine. Wondering if you could share specifically what spurred that interaction and can you talk in any more detail about what you received clarity on? Andy, you want to Take that.

I don't know, we can't hear Anya, but this This was a Type C meeting. We just wanted to make sure that we understood what the content of the filing should be, make sure that we have everything documented in terms of FDA expectations.

For the filing. And that was really just good good regulatory practice. So that as we said, we can invest the money in 2025 to really developing and writing the NDA such that it would provide for an expedited filing once we had Cypress results hopefully that are positive.

Got it. Thank you. That makes sense. Thank you. And our next question comes from the line of David Risinger from Leerink Partners.

Your question please.

Yes. Thanks very much and thanks for all of the detail today and congrats on the fourth quarter performance. So I just had some basic sort of financial questions. So first, was there any channel stocking or any other anomalies that benefited the fourth quarter net revenue? Second, what percentage of YUPELRI sales are non hospital sales dollars Just wanted to understand, if hospital is like 90% of net sales of YUPELRI or 60% of net sales of YUPELRI? Just wanted to understand that.

And then third, could you just explain why the non hospital sales dollars are trending down year over year. Thanks very much. Just in terms of the and I'll turn this over over to Teresa over to Rhonda, but just in terms of sort of year end levels, I think based on what we understand, year end inventory levels were about the same as they are [indiscernible] Every year for for VITRIS. So I don't think there was any unusual there. Rhonda, That's correct, Rick.

David, your second question, if I understand correctly, the percent of you tell rate that runs through hospital channel and what proportion of that of the total brand, is that correct?

Yes. Just trying to understand what percentage of YUPELRI sales dollars come from the non hospital category, however you categorize it, And then why is that trending down year over year?

The hospital business accounts for in pure volume. Within the inpatient setting is roughly 10% of the total brand. So you can see it's a smaller proportion [indiscernible] 90% to the larger channels of the community setting. Which includes long term care. So you'll have to orient me to what your question or where you're finding data of what the decline is because that's not in line with what we're seeing relative to the demand which was 11% full year for last year. Oh, got it. Yes, to orient you, so the slide only discusses the hospital growth and volume of something like 49%. [indiscernible] So that's what drove the question. I was wondering, what is happening in nonhospital since the slide this quarter and historical quarters only relate to hospital. So that's what was driving hospital hospital was a larger percentage of the sales dollars But obviously, since you just disclosed that the hospital volume is only 10% of total UPELRI volume Now I have better context and I understand that non hospital is growing.

That's right. Thank you, David. And I think a point of differentiation there it's unit dose in the hospital. And an average day is roughly three point five days. For for exacerbating patients whereas obviously I think you appreciate in the community setting it's a thirty day script. So that's a volume differentiator right there.

Got it. Thanks. The other you want to just touch on demand growth as well just so that David's got that.

Rhonda? Yes.

I offered that up.

And the beginning, 11% full year.

And so, yes, David, the the strategy here for us and Beatrice is we're in the hospital driving driving uses of use of the hospital such that the patient can have a good experience with the product that obviously we're talking about the ability to breathe better. Good experience and therefore get a prescription as they leave the hospital for outpatient use. We get about 80% between 8090% depending on the quarter. Of patients leaving the hospital with the script. And I think for the future, another source of growth for us as Beatrice is just simply converting a higher and higher percentage of those scripts to to really true chronic therapy out in the outpatient setting.

Got it. Thanks again. Thank you. And as a reminder, And our next question comes from the line of Mark Franck from TD Cowen. Your question please.

This is Alex on for Mark. Congrats on the quarter and thanks for taking my question. So just a couple on ampreloxetine.

First, what do you ultimately see as the bar for success for the Cypress readout? And then assuming Cypress is positive, what would kind of be the scale of the commercial organization you need to assemble to market the drug and will any of that build occur ahead of the data or is the potential OpEx in entirely a 2026 story? Thanks.

Yes. Just I think that we've touched on this before, but a one point change in the OHSA composite score is a clinically meaningful change. So So seeing a one point move in the [indiscernible] [indiscernible] evaluating patients in the randomized withdrawal and that being statistically significant that would constitute success both from a statistical as well as a clinical meaningfulness viewpoint I'll let Rhonda touch on the other other point, but really just on the spend, [indiscernible] will hold off on increasing the size of the organization until after we have Cypress data. But Rhonda, just you want to qualitatively talk about size of an organization?

Yes. Alex, it's an important question. And work that we have underway for determining what is the optimal size and relates to specific in person promotion. But what I will say, given what we understand about the market today and having a very close evaluation of claims to particularly understand what's being [indiscernible] with how we assemble and deploy the sales effort. And when I say the sales effort, that would be any personnel [indiscernible] that's in person or we have virtual reach and then that complemented by digital surround sound with omnichannel reach. So appreciating that the script view that we have today it helps us to appreciate the concentration of the potential targets with that being roughly 3,000 prescribers And then that being concentrated across I believe, two fifty centers that we centers and clinics that we want to ensure we're highly focused on. So that concentration really allows us to be very efficient which I think we've set the example of how efficiently we can operate with our current sales just to clarify the cost question. So yes, as you mentioned, the SG and A is going up, but not by much. Right? The midpoint of guidance is $55,000,000 relative to actuals of of $53,000,000 in 2024.

So going up a couple of million dollars very measured investment in Medical Affairs Market Act etcetera, market research, etcetera. This is all external spend and basically no incremental FTEs prior to the Cypress data readout. So no incremental FTEs baked into the guidance in 2025 for Got it. Thanks again.

Thank you.

And it appears that we have no further questions on the phone. I'd now like to turn the conference back to Mr. Wittenkamp. Please go ahead, sir.

Yes. I'd just like to thank everyone for joining us today and thank you for the questions. We look forward to an exciting 2025 and being able to deliver on the strategic priorities that we outlined in today's call. Have a great day. Thank you.

Thank you, ladies and gentlemen, for your participation in today's conference. This does conclude the program. You may now disconnect. Good day.