Theravance Biopharma, Inc. Reports Second Quarter 2022 Financial Results and Provides Business Update
- Highest quarter of YUPELRI® (revefenacin) net sales and profitability to date1:
$17.2M Q2 2022 sales up 17% from Q2 2021 (implied 35% share) - Ampreloxetine discussions with FDA create a path to NDA filing with one additional Phase 3 clinical study in Multiple System Atrophy (MSA) patients with symptomatic neurogenic orthostatic hypotension (nOH)
- Closed transaction to sell TRELEGY ELLIPTA royalty interests to
Royalty Pharma for approximately$1.1 billion in upfront cash with over$1.5 billion in total potential value - Launched tender offer for outstanding 3.25% Convertible Senior Notes
"The Company has continued to execute on its strategy and, since the first quarter, we have accomplished several transformative goals. YUPELRI delivered its strongest quarter of sales to date. Our ampreloxetine discussions with FDA create a path to an NDA filing in MSA patients with symptomatic nOH. The closing of the sale of our TRELEGY ELLIPTA royalty interests to
Quarterly Highlights
- YUPELRI® (revefenacin) inhalation solution, the first and only once-daily, nebulized bronchodilator approved in the US for the maintenance treatment of patients with chronic obstructive pulmonary disease (COPD), with net sales increasing by 17% year-over-year (Q2 2022 vs Q2 2021) – its strongest quarter to date, and increased its share of the long-acting nebulized COPD market, increasing to 25.3% through
April 2022 , up from 24.1% in Q1 2022. - Ampreloxetine, an investigational,
Theravance Biopharma -discovered, potent, long-acting, once-daily norepinephrine reuptake inhibitor in development for the treatment of symptomatic nOH in patients with MSA. Phase 3 results (Study 0170) showed a benefit to MSA patients in the study that was observed in multiple endpoints including Orthostatic Hypotension Symptom Assessment (OHSA) composite, Orthostatic Hypotension Daily Activities Scale (OHDAS) composite, Orthostatic Hypotension Questionnaire (OHQ) composite and OHSA #1. (Read more about the data here). The Company held a Type C meeting with the FDA inJune 2022 and agreed on a path to NDA filing with one new Phase 3 clinical study in MSA patients with symptomatic nOH. The Company plans to start the new Phase 3 study in early 2023, with a primary endpoint of Change in OHSA Composite Score. The Company reiterates it expects the$25 million investment fromRoyalty Pharma to fund the majority of the Phase 3 costs as a result of study size as well as insights and learnings from earlier studies. - TRELEGY ELLIPTA (once-daily, single inhaler triple therapy for COPD and asthma)
Sale of TRELEGY ELLIPTA Royalty Interest
OnJuly 20, 2022 ,Theravance Biopharma closed the sale of its units inTheravance Respiratory Company, LLC representing its 85% economic interest in the sales-based royalty rights on worldwide net sales of GSK's TRELEGY ELLIPTA ("TRELEGY") toRoyalty Pharma (NASDAQ: RPRX) for over$1.5 billion in potential total value (the "TRELEGY Royalty Transaction"). The Trelegy Royalty Transaction is intended to provide near-, mid- and long-term value to the Company with an upfront cash payment of approximately$1.1 billion , up to$250 million in additional milestone payments contingent on the achievement of certain TRELEGY net sales thresholds between 2023 and 2026 and outer year royalties to the Company providing an opportunity to receive an estimated NPV of$200 million . (View the closing 8-K here. For deal specifics, view the press release here and accompanying presentation and appendix here).
GlobalNet Sales and Milestones
GSK posted second quarter 2022 global net sales of$591 million (up from$405 million , or 46%, from second quarter of 2021).Theravance Biopharma is entitled to a milestone payment from RPI of$50 million if TRELEGY global net sales are equal to or exceed$2.863 billion 2 in 2023. - Tender Offer Convertible Senior Notes On
July 26, 2022 ,Theravance Biopharma announced a Tender Offer for its outstanding 3.25% Convertible Senior Notes due 2023. As ofJuly 20, 2022 , there were$230 million aggregate principal amount of the Convertible Notes outstanding.
Second Quarter Financial Results
- Revenue: Total revenue for the second quarter of 2022 was
$11.1 million , primarily comprised of$10.9 million in Viatris collaboration revenue. Total revenue for the second quarter represents a$1.9 million decrease over the same period in 2021 primarily driven by the completion of the recognition of non-cash Janssen collaboration revenue in 2021, resulting from the planned close-out of the izencitinib program. - YUPELRI: The Viatris collaboration revenue of
$10.9 million for the second quarter of 2022 represents amounts receivable from Viatris and is comprised of the Company's 35% share of net sales of YUPELRI as well as its proportionate amount of the total shared costs incurred by the two companies. The non-shared YUPELRI costs incurred byTheravance Biopharma are recorded within operating expenses. While Viatris records the total net sales of YUPELRI within its financial statements,Theravance Biopharma's implied 35% share of net sales of YUPELRI for the second quarter of 2022 was$17.2 million , up 12% from the first quarter of 2022. There was a 17% increase in year-over-year implied net sales for the second quarter, however, due to accounting guidelines, Viatris collaboration revenue decreased by 1% due to lower costs incurred byTheravance Biopharma as a result of the corporate restructuring, which improves YUPELRI profitability but lowers Viatris collaboration revenue. Additionally, during the period there were higher costs incurred by Viatris, which also reduced our Viatris collaboration revenue. - Research and Development (R&D) Expenses: R&D expenses for the second quarter of 2022 were
$15.6 million , compared to$51.1 million in the same period in 2021. Second quarter R&D expenses included total non-cash share-based compensation of$3.6 million . - Selling, General and Administrative (SG&A) Expenses: SG&A expenses for the second quarter of 2022 were
$17.0 million , compared to$25.9 million in the same period in 2021. Second quarter SG&A expenses included total non-cash share-based compensation of$5.8 million . - Transaction-Related Legal Expenses: Non-routine legal expenses were
$3.8 million and$5.1 million for the three and six months endedJune 30, 2022 , respectively, and were related to the sale of our units in TRC and ampreloxetine investment inJuly 2022 . - Restructuring and Related Expenses: Restructuring expenses for the second quarter of 2022 were
$1.6 million . - Cash Position: Cash, cash equivalents and marketable securities totaled
$132.9 million as ofJune 30, 2022 .
2022 Financial Guidance
- Operating Expenses: The Company expects full year 2022 R&D expense of
$45 million to$55 million and SG&A expense of$35 million to$45 million (in each case, excluding share-based compensation, one-time restructuring costs and one-time transaction related legal expenses). - The Company expects to approach breakeven cash flow from operations in 2H 2022 and become sustainably cash flow positive going forward on an annual basis.
Conference Call and Live Webcast Today at
A replay of the conference call will be available on
About
For more information, please visit www.theravance.com.
Forward-Looking Statements
This press release contains and the conference call will contain certain "forward-looking" statements as that term is defined in the Private Securities Litigation Reform Act of 1995 regarding, among other things, statements relating to goals, plans, objectives, expectations and future events.
Additional Information and Where to Find It
This announcement is for informational purposes only and is neither an offer to buy nor the solicitation of an offer to sell any of the Company's outstanding 3.25% Convertible Senior Notes due 2023. The Tender Offer is being made solely pursuant to the Offer to Purchase and related materials, as they may be amended or supplemented. Holders should read the Company's Tender Offer Statement on Schedule TO filed with the
Contact: Gail B. Cohen
Corporate Communications / 917-214-6603
1 While Viatris, Inc. ("Viatris") records the total YUPELRI net sales, the Company is entitled to a 35% share of the profits and losses pursuant to a co-promotion agreement with Viatris.
2 The first milestone payment, of
THERAVANCE BIOPHARMA, INC. |
|||||
CONDENSED CONSOLIDATED BALANCE SHEETS |
|||||
(In thousands) |
|||||
|
|
||||
2022 |
2021 |
||||
Assets |
(Unaudited) |
(1) |
|||
Current assets: |
|||||
Cash and cash equivalents and short-term marketable securities |
$ |
132,850 |
$ |
173,465 |
|
Receivables from collaborative arrangements |
12,488 |
14,065 |
|||
Amounts due from |
- |
43,534 |
|||
Prepaid clinical and development services |
2,311 |
10,245 |
|||
Other prepaid and current assets |
7,080 |
8,561 |
|||
Total current assets |
154,729 |
249,870 |
|||
Property and equipment, net |
12,531 |
13,657 |
|||
Operating lease assets |
41,112 |
39,690 |
|||
Equity in net assets of |
148,250 |
67,537 |
|||
Restricted cash |
836 |
837 |
|||
Other assets |
3,303 |
3,228 |
|||
Total assets |
$ |
360,761 |
$ |
374,819 |
|
Liabilities and Shareholders' Deficit |
|||||
Current liabilities |
$ |
32,624 |
$ |
58,587 |
|
Convertible senior notes due 2023, net |
228,571 |
228,035 |
|||
Non-recourse notes due 2035, net |
396,125 |
371,359 |
|||
Long-term operating lease liabilities |
50,642 |
52,681 |
|||
Other long-term liabilities |
2,608 |
2,730 |
|||
Shareholders' deficit |
(349,809) |
(338,573) |
|||
Total liabilities and shareholders' deficit |
$ |
360,761 |
$ |
374,819 |
|
________________________________ |
|||||
(1) The condensed consolidated balance sheet as of |
THERAVANCE BIOPHARMA, INC. |
||||||||||||
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS |
||||||||||||
(In thousands, except per share data) |
||||||||||||
Three Months Ended |
Six Months Ended |
|||||||||||
2022 |
2021 |
2022 |
2021 |
|||||||||
(Unaudited) |
(Unaudited) |
|||||||||||
Revenue: |
||||||||||||
Viatris collaboration agreement |
$ |
10,878 |
$ |
10,934 |
$ |
21,565 |
$ |
21,319 |
||||
Collaboration revenue |
172 |
1,980 |
181 |
5,852 |
||||||||
Licensing revenue |
- |
- |
2,500 |
- |
||||||||
Total revenue |
11,050 |
12,914 |
24,246 |
27,171 |
||||||||
Costs and expenses: |
||||||||||||
Research and development (1) |
15,571 |
51,093 |
38,824 |
118,692 |
||||||||
Selling, general and administrative (1) |
16,986 |
25,931 |
34,828 |
56,481 |
||||||||
Transaction-related legal expenses (2) |
3,778 |
- |
5,057 |
- |
||||||||
Restructuring and related expenses (1) |
1,594 |
- |
10,918 |
- |
||||||||
Total costs and expenses |
37,929 |
77,024 |
89,627 |
175,173 |
||||||||
Loss from operations |
(26,879) |
(64,110) |
(65,381) |
(148,002) |
||||||||
Income from investment in |
28,127 |
21,926 |
53,237 |
38,473 |
||||||||
Interest expense |
(11,884) |
(11,612) |
(23,539) |
(23,485) |
||||||||
Interest income and other income (expense), net |
2,440 |
1,171 |
2,065 |
937 |
||||||||
Loss before income taxes |
(8,196) |
(52,625) |
(33,618) |
(132,077) |
||||||||
Provision for income tax (expense) benefit |
5 |
220 |
(519) |
(7) |
||||||||
Net loss |
$ |
(8,191) |
$ |
(52,405) |
$ |
(34,137) |
$ |
(132,084) |
||||
Net loss per share: |
||||||||||||
Basic and diluted net loss per share |
$ |
(0.11) |
$ |
(0.80) |
$ |
(0.45) |
$ |
(2.03) |
||||
Shares used to compute basic and diluted net loss per share |
76,270 |
65,669 |
75,761 |
65,085 |
||||||||
________________________________ |
||||||||||||
(1) Amounts include share-based compensation expense as follows: |
||||||||||||
Three Months Ended |
Six Months Ended |
|||||||||||
(In thousands) |
2022 |
2021 |
2022 |
2021 |
||||||||
Research and development |
$ |
3,556 |
$ |
7,315 |
$ |
8,086 |
$ |
15,236 |
||||
Selling, general and administrative |
5,794 |
7,626 |
11,292 |
15,537 |
||||||||
Restructuring and related expenses |
359 |
- |
4,876 |
- |
||||||||
Total share-based compensation expense |
$ |
9,709 |
$ |
14,941 |
$ |
24,254 |
$ |
30,773 |
||||
(2) Represents legal expenses related to the TRC sale to |
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