UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, DC  20549

 


 

FORM 8-K

 


 

Current Report Pursuant

to Section 13 or 15(d) of the

Securities Exchange Act of 1934

 

Date of Report (Date of earliest event Reported):  November 6, 2018

 


 

THERAVANCE BIOPHARMA, INC.

(Exact Name of Registrant as Specified in its Charter)

 


 

Cayman Islands

 

001-36033

 

98-1226628

(State or Other Jurisdiction of
Incorporation)

 

(Commission File Number)

 

(I.R.S. Employer Identification Number)

 

PO Box 309

Ugland House, South Church Street

George Town, Grand Cayman, Cayman Islands KY1-1104

(650) 808-6000

(Addresses, including zip code, and telephone number, including area code, of principal executive offices)

 


 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

 

o            Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

 

o            Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

 

o            Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

 

o            Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

 

Emerging growth company  o

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.   o

 

 

 


 

Item 2.02. Results of Operations and Financial Condition.

 

On November 6, 2018, Theravance Biopharma, Inc. issued a press release and is holding a conference call regarding its financial results for the quarter ended September 30, 2018 and a business update.  A copy of the press release is furnished as Exhibit 99.1 to this Current Report and a copy of materials that will accompany the call is furnished as Exhibit 99.2 to this Current Report.

 

The information in Item 2.02 and in Item 9.01 of this Current Report on Form 8-K, including Exhibits 99.1 and 99.2, is being furnished and shall not be deemed “filed” for the purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Securities Exchange Act of 1934”), or otherwise subject to the liabilities of that Section, nor shall it be incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, except as expressly set forth by specific reference in such a filing.

 

Item 9.01. Financial Statements and Exhibits.

 

(d) Exhibits.

 

99.1

 

Press Release dated November 6, 2018

 

 

 

99.2

 

Materials Accompanying the Call

 

2


 

EXHIBIT INDEX

 

Exhibit No.

 

Description

 

 

 

99.1

 

Press Release dated November 6, 2018

 

 

 

99.2

 

Materials Accompanying the Call

 

3


 

SIGNATURE

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

 

THERAVANCE BIOPHARMA, INC.

 

 

 

 

 

 

Date: November 6, 2018

By:

/s/ Renee D. Gala

 

 

Renee D. Gala

 

 

Senior Vice President and Chief Financial Officer

 

4


Exhibit 99.1

 

 

Theravance Biopharma, Inc. Reports Third Quarter 2018 Financial Results and Provides Business Update

 

PDUFA date for YUPELRITM (revefenacin) inhalation solution on November 13

 

TD-1473 and TD-9855 entering late-stage clinical development programs; TD-8236 advancing from research into clinic

 

Company to host R&D Day on December 12 in New York City

 

DUBLIN, IRELAND — NOVEMBER 6, 2018 — Theravance Biopharma, Inc. (“Theravance Biopharma” or the “Company”) (NASDAQ: TBPH) today reported financial results for the third quarter ended September 30, 2018. Revenue for the third quarter of 2018 was $12.8 million. The Company’s third quarter operating loss was $62.5 million or $50.7 million excluding share-based compensation expense. Cash, cash equivalents, and marketable securities totaled $320.6 million as of September 30, 2018.

 

Rick E Winningham, Chairman and Chief Executive Officer, commented: “The steps we have taken over the course of the year reflect a focus on our strategic priorities, placing us in an optimal position as we approach 2019. The decision to sell VIBATIV® to Cumberland Pharmaceuticals allows our commercial organization to concentrate exclusively on the potential launch of YUPELRI, which if approved will be the first once-daily nebulized LAMA for the treatment of COPD. We are eager to bring this potential medicine to patients and remain on track with an assigned PDUFA date of November 13. Meanwhile, the rapid uptake in scripts for GSK’s Trelegy Ellipta in its first full year on the market remains extremely impressive. Our economic interest in the first and only once-daily single inhaler triple therapy represents an important strategic asset to the Company.  Earlier this year, we established proof of concept in patients with highly encouraging clinical results for TD-1473 in ulcerative colitis and TD-9855 in nOH, and we are driving both programs to begin late stage studies in the near term. We also approach the first in human studies of TD-8236, our novel inhaled JAK inhibitor for serious respiratory diseases. Finally, we look forward to discussing the insight and innovation in our early stage assets at our 2018 R&D Day next month.”

 

Program Updates and Upcoming Milestones

 

YUPELRITM (revefenacin, nebulized long-acting muscarinic antagonist (LAMA)):

 

·                  Prescription Drug User Fee Act (PDUFA) date on track as November 13, 2018. Final launch readiness activities with partner Mylan ongoing

·                  Phase 3 clinical program data in chronic obstructive pulmonary disease (COPD) shared in oral presentation at European Respiratory Society (ERS) Paris 2018 International Congress. Descriptive data showed reductions in the rates of COPD exacerbations in moderate to very severe COPD patients administered once-daily YUPELRI for up to 52 weeks as compared to placebo and tiotropium (Spiriva® HandiHaler®)

 

TD-1473 (gut-selective pan-Janus kinase (JAK) inhibitor):

 

·                  Results from the Phase 1b study of TD-1473 in patients with ulcerative colitis recently presented in an oral late-breaker session at United European Gastroenterology (UEG) Week 2018. Data demonstrated four weeks of TD-1473 treatment led to localized biologic activity and localized target engagement with minimal systemic exposure, and a favorable safety and tolerability profile

·                  Patient screening underway for Phase 2 induction study in Crohn’s disease

·                  Site initiation underway for Phase 2b/3 induction and maintenance study in ulcerative colitis, with patient dosing expected to begin in late 2018 or early 2019

 

1


 

TD-9855 (norepinephrine serotonin reuptake inhibitor (NSRI)):

 

·                  Positive four-week data reported from the Phase 2 study in patients with neurogenic orthostatic hypotension (nOH) in August 2018. Majority of patients enrolled in single ascending dose portion demonstrated response to TD-9855; durable improvements in nOH symptom severity observed as measured by OHSA Question #1 (a measure of dizziness, light-headedness or the sensation of being about to black out)

·                  Initiation of the registrational Phase 3 program in symptomatic nOH underway, with patient dosing expected to begin in late 2018 or early 2019

 

TD-8236 (novel inhaled JAK inhibitor for serious respiratory diseases):

 

·                  Progression into first-in-human studies this year, leveraging expertise in respiratory diseases and JAK inhibition

·                  Multiple JAK-dependent pathways clinically validated in asthma and COPD

·                  Potentially broad activity with JAK inhibition across a range of respiratory indications and phenotypes

 

VIBATIV® (telavancin):

 

·                  Proprietary antibiotic VIBATIV® sold to Cumberland Pharmaceuticals, Inc.; transaction is expected to close in mid-November, pending satisfaction of customary closing conditions

 

Trelegy Ellipta (first once-daily single inhaler triple therapy for COPD)1:

 

·                  GSK reported third quarter 2018 net sales of $56 million; Theravance Biopharma entitled to approximately 5.5% to 8.5% (tiered) of worldwide net sales of the product

·                  Trelegy Ellipta is currently available in 16 countries, with an additional nine expected over the course of 2019; more recent regulatory filings include Japan and China

·                  Potential label expansion in EU, as European Medicines Agency’s Committee for Medicinal Products for Human Use recently issued a positive opinion supporting the use of Trelegy Ellipta in patients not adequately treated by a long-acting muscarinic receptor antagonist and long-acting β2-agonist; also referenced the effect on exacerbations based on data from the IMPACT study

·                  Completion of Phase 3 CAPTAIN study in asthma patients anticipated in early 2019

 

2018 R&D Day:

 

·                  Company to host R&D Day on December 12, 2018, in New York City

 


Notes:

 

1 As reported by Glaxo Group Limited or one of its affiliates (GSK); reported sales converted to USD; economic interest related to Trelegy Ellipta (the combination of fluticasone furoate, umeclidinium, and vilanterol, (FF/UMEC/VI), jointly developed by GSK and Innoviva, Inc.) entitles Company to upward tiering payments equal to approximately 5.5% to 8.5% on worldwide net sales of the product (net of TRC LLC expenses paid and the amount of cash, if any, expected to be used by TRC pursuant to the TRC LLC Agreement over the next four fiscal quarters)

 

2


 

Third Quarter Financial Results

 

Revenue

 

Revenue for the third quarter of 2018 was $12.8 million, comprised of revenue from collaborative arrangements of $9.0 million and product sales of VIBATIV® of $3.8 million. Revenue in the third quarter represents an increase of approximately $8.6 million over the same period in 2017. The increase is primarily related to revenue recognized from the upfront payment associated with the global collaboration agreement with Janssen for TD-1473.

 

Research and Development (R&D) Expenses

 

R&D expenses for the third quarter of 2018 were $52.7 million, compared to $39.3 million in the same period in 2017. The increase is primarily due to higher external and employee-related expenses to support our key programs and share-based compensation expense. Third quarter R&D expenses include non-cash share-based compensation of $6.3 million.

 

Selling, General and Administrative (SG&A) Expenses

 

SG&A expenses for the third quarter of 2018 were $21.9 million, compared to $20.9 million in the same period in 2017. Third quarter SG&A expenses include non-cash share-based compensation of $5.5 million.

 

Cash, Cash Equivalents and Marketable Securities

 

Cash, cash equivalents and marketable securities totaled $320.6 million as of September 30, 2018.

 

2018 Financial Guidance

 

The Company’s guidance on operating loss excluding non-cash share-based compensation for the full year of 2018 remains unchanged at $180.0 to $200.0 million. The actual amount could be above or below this forecast as a result of a variety of factors impacting the business. The Company’s financial guidance for 2018 does not include income related to Trelegy Ellipta.

 

Annual Meeting

 

The Company will hold its 2019 Annual General Meeting on April 30, 2019.

 

Conference Call and Live Webcast Today at 5:00 pm ET

 

Theravance Biopharma will hold a conference call and live webcast accompanied by slides today at 5:00 pm ET. To participate in the live call by telephone, please dial (855) 296-9648 from the US, or (920) 663-6266 for international callers, and use the confirmation code 8172459. Those interested in listening to the conference call live via the internet may do so by visiting Theravance Biopharma’s website at www.theravance.com, under the Investor Relations section, Presentations and Events. Please go to the website 15 minutes prior to the start of the call to register, download, and install any necessary audio software.

 

3


 

A replay of the conference call will be available on Theravance Biopharma’s website for 30 days through December 6, 2018. An audio replay will also be available through 8:00 pm ET on November 13, 2018 by dialing (855) 859-2056 from the U.S., or (404) 537-3406 for international callers, and then entering confirmation code 8172459.

 

About Theravance Biopharma

 

Theravance Biopharma, Inc. (“Theravance Biopharma”) is a diversified biopharmaceutical company with the core purpose of creating medicines that help improve the lives of patients suffering from serious illness.

 

In our relentless pursuit of this objective, we strive to apply insight and innovation at each stage of our business, including research, development and commercialization, and utilize both internal capabilities and those of partners around the world. Our research efforts are focused in the areas of inflammation and immunology. Our research goal is to design localized medicines that target diseased tissues, without systemic exposure, in order to maximize patient benefit and minimize risk. These efforts leverage years of experience in developing localized medicines for the lungs to treat respiratory disease. The first potential medicine to emerge from our research focus on immunology and localized treatments is an oral, gut-selective pan-Janus kinase (JAK) inhibitor, currently in development to treat a range of inflammatory intestinal diseases. Our pipeline of internally discovered product candidates will continue to evolve with the goal of creating transformational medicines to address the significant needs of patients.

 

In addition, we have an economic interest in future payments that may be made by Glaxo Group or one of its affiliates (GSK) pursuant to its agreements with Innoviva, Inc. relating to certain programs, including Trelegy Ellipta.

 

For more information, please visit www.theravance.com.

 

THERAVANCE®, the Cross/Star logo, and VIBATIV® are registered trademarks of the Theravance Biopharma group of companies. Trademarks, trade names or service marks of other companies appearing on this press release are the property of their respective owners.

 

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. Theravance Biopharma intends such forward-looking statements to be covered by the safe harbor provisions for forward-looking statements contained in Section 21E of the Securities Exchange Act of 1934 and the Private Securities Litigation Reform Act of 1995. Examples of such statements include statements relating to: the expected closing date for the sale of VIBATIV®, the Company’s strategies, plans and objectives, the Company’s regulatory strategies and timing of clinical studies (including the data therefrom), the potential characteristics, benefits and mechanisms of action of the Company’s product and product candidates, the Company’s expectations for product candidates through development, potential regulatory approval and commercialization (including their potential as components of combination therapies and their differentiation from other products or potential products), product sales and the Company’s expectations for its 2018 operating loss, excluding share-based compensation. These statements are based on the current estimates and assumptions of the management of Theravance Biopharma as of the date of the press release and the conference call and are subject to risks, uncertainties, changes in circumstances, assumptions and other factors that may cause the actual results of Theravance Biopharma to be materially different from those reflected in the forward-looking statements. Important factors that could cause actual results to differ materially from those indicated by such forward-looking statements include, among others, risks related to: delays or difficulties in commencing, enrolling or completing clinical studies, the potential that results from clinical or non-clinical studies indicate the Company’s product candidates are unsafe or ineffective (including when our product candidates are studied in combination with other compounds), risks that product candidates do not obtain approval from regulatory authorities, the feasibility of undertaking future clinical trials for our product candidates based on policies and feedback from regulatory authorities, dependence on third parties to conduct clinical studies, delays or failure to achieve and maintain regulatory approvals for product candidates, risks of collaborating with or relying on third parties to discover, develop, manufacture and commercialize products, and risks associated with establishing and maintaining sales,

 

4


 

marketing and distribution capabilities with appropriate technical expertise and supporting infrastructure. Other risks affecting Theravance Biopharma are described under the heading “Risk Factors” contained in Theravance Biopharma’s Form 10-Q filed with the Securities and Exchange Commission (SEC) on August 2, 2018 and Theravance Biopharma’s other filings with the SEC. In addition to the risks described above and in Theravance Biopharma’s filings with the SEC, other unknown or unpredictable factors also could affect Theravance Biopharma’s results. No forward-looking statements can be guaranteed and actual results may differ materially from such statements. Given these uncertainties, you should not place undue reliance on these forward-looking statements. Theravance Biopharma assumes no obligation to update its forward-looking statements on account of new information, future events or otherwise, except as required by law.

 

Contact Information:

 

Alexander Dobbin

Head of Investor Relations

650-808-4045

investor.relations@theravance.com

 

5


 

THERAVANCE BIOPHARMA, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(In thousands, except per share data)

 

 

 

Three Months Ended September 30,

 

Nine Months Ended September 30,

 

 

 

2018

 

2017

 

2018

 

2017

 

 

 

(Unaudited)

 

(Unaudited)

 

Revenue:

 

 

 

 

 

 

 

 

 

Product sales

 

$

3,849

 

$

4,140

 

$

12,889

 

$

10,664

 

Revenue from collaborative arrangements

 

8,989

 

135

 

31,744

 

207

 

Total revenue

 

12,838

 

4,275

 

44,633

 

10,871

 

 

 

 

 

 

 

 

 

 

 

Costs and expenses:

 

 

 

 

 

 

 

 

 

Cost of goods sold

 

705

 

985

 

83

 

2,914

 

Research and development (1)

 

52,693

 

39,343

 

149,079

 

122,835

 

Selling, general and administrative (1)

 

21,890

 

20,944

 

71,601

 

66,069

 

Total costs and expenses

 

75,288

 

61,272

 

220,763

 

191,818

 

Loss from operations

 

(62,450

)

(56,997

)

(176,130

)

(180,947

)

Income from investment in TRC, LLC

 

3,119

 

 

5,754

 

 

Interest expense

 

(2,137

)

(2,136

)

(6,411

)

(6,410

)

Other-than-temporary impairment loss

 

 

(8,000

)

 

(8,000

)

Interest and other income, net

 

1,376

 

1,124

 

4,144

 

3,579

 

Loss before income taxes

 

(60,092

)

(66,009

)

(172,643

)

(191,778

)

Provision for income tax (benefit)

 

(659

)

868

 

(7,305

)

6,705

 

Net loss

 

$

(59,433

)

$

(66,877

)

$

(165,338

)

$

(198,483

)

 

 

 

 

 

 

 

 

 

 

Net loss per share:

 

 

 

 

 

 

 

 

 

Basic and diluted net loss per share

 

$

(1.10

)

$

(1.27

)

$

(3.07

)

$

(3.80

)

Shares used to compute basic and diluted net loss per share

 

54,248

 

52,611

 

53,771

 

52,165

 

 


(1) Amounts include share-based compensation expense as follows:

 

 

 

Three Months Ended September 30,

 

Nine Months Ended September 30,

 

(In thousands)

 

2018

 

2017

 

2018

 

2017

 

Research and development

 

$

6,294

 

$

5,005

 

$

19,757

 

$

15,023

 

Selling, general and administrative

 

5,452

 

5,680

 

19,842

 

16,329

 

Total share-based compensation expense

 

$

11,746

 

$

10,685

 

$

39,599

 

$

31,352

 

 

6


 

THERAVANCE BIOPHARMA, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(In thousands)

 

 

 

September 30,

 

December 31,

 

 

 

2018

 

2017

 

 

 

(Unaudited)

 

(1)

 

Assets

 

 

 

 

 

Current assets:

 

 

 

 

 

Cash and cash equivalents and short-term marketable securities

 

$

300,409

 

$

348,566

 

Receivables from collaborative arrangements

 

3,907

 

7,109

 

Prepaid taxes

 

314

 

291

 

Other prepaid and current assets

 

10,053

 

5,953

 

Inventories

 

17,923

 

16,830

 

Property and equipment, net

 

12,415

 

10,157

 

Long-term marketable securities

 

20,217

 

41,587

 

Tax receivable

 

3,131

 

8,191

 

Restricted cash

 

833

 

833

 

Other assets

 

1,762

 

1,883

 

Total assets

 

$

370,964

 

$

441,400

 

 

 

 

 

 

 

Liabilities and Shareholders’ Equity (Deficit)

 

 

 

 

 

Current liabilities

 

102,029

 

62,552

 

Long-term liabilities

 

282,380

 

263,670

 

Shareholders’ equity (deficit)

 

(13,445

)

115,178

 

Total liabilities and shareholders’ equity (deficit)

 

$

370,964

 

$

441,400

 

 


(1)  The condensed consolidated balance sheet at December 31, 2017 has been derived from the audited consolidated financial statements included in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2017.

 

7


Exhibit 99.2

3Q 2018 Financial Results and Business Update November 6, 2018 Theravance Biopharma, Inc. (NASDAQ: TBPH)

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Cautionary Statement Regarding Forward-Looking Statements Under the safe harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995, the company cautions investors that any forward-looking statements or projections made by the company are subject to risks and uncertainties that may cause actual results to differ materially from the forward-looking statements or projections. Examples of forward-looking statements in this presentation include statements relating to the expected closing date for the sale of VIBATIV®, the company’s business plans and objectives, including financial and operating results, potential partnering transactions and sales targets, the company’s regulatory strategies and timing and results of clinical studies, the potential benefits and mechanisms of action of the company’s product and product candidates (including their potential as components of combination therapies). The company’s forward-looking statements are based on the estimates and assumptions of management as of the date of this presentation and are subject to risks and uncertainties that may cause the actual results to be materially different than those projected, such as risks related to delays or difficulties in commencing or completing clinical studies, the potential that results from clinical or non-clinical studies indicate product candidates are unsafe or ineffective (including when our product candidates are studied in combination with other compounds), delays or failure to achieve and maintain regulatory approvals for product candidates, risks of collaborating with third parties to discover, develop and commercialize products, risks associated with establishing and maintaining sales, marketing and distribution capabilities. Other risks affecting the company are described under the heading “Risk Factors” and elsewhere in the company’s Form 10-Q filed with the Securities and Exchange Commission (SEC) on August 2, 2018, and other periodic reports filed with the SEC.

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Strategic Focus in 2018 JAK = Janus kinase. NSRI = noreprenephrine serotonin reuptake inhibitor. nOH = neurogenic orthostatic hypotension. SBP = systolic blood pressure. QD = once-daily. LAMA = long-acting muscarinic antagonist. PDUFA = Prescription Drug User Fee Act. YUPELRI is the proposed brand name for revefenacin inhalation solution. 1 YUPELRITM (revefenacin) inhalation solution. 2 TBPH holds 85% economic interest in upward-tiering royalty stream of 6.5% – 10% payable by GSK (net of TRC LLC expenses paid and the amount of cash, if any, expected to be used by TRC pursuant to the TRC LLC Agreement over the next four fiscal quarters). NDA accepted by FDA and under review Assigned PDUFA date of November 13, 2018; proposed as first QD nebulized LAMA for treatment of COPD Positive top-line four-week results in nOH Initiating pivotal Phase 3 program in symptomatic nOH TD-1473 (JAKi) TD-9855 (NSRI) YUPELRITM (LAMA)1 Partnership with global leader in Immunology Initiating Phase 2 study in Crohn’s disease and pivotal Phase 2b/3 study in ulcerative colitis Commercial organization to concentrate exclusively on YUPELRI if approved Economic interest in Trelegy Ellipta serves as an important strategic asset2 Promising initial launch following approvals in US and EU in late 2017 TD-1473, TD-9855, and YUPELRI each internally discovered and developed by R&D engine which serves as important driver of long term value

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TD-9855: Phase 2 Results Support Progression Three-part proof of concept study in nOH 1 Symptomatic defined as OSHA #1 > 4. OHSA = Orthostatic Hypotension Symptom Assessment. OHSA #1 measures dizziness (cardinal symptom of nOH), lightheadedness, feeling faint, or feeling of impending black out Key Findings A SAD portion Responses reported in majority of patients treated with TD-9855 27 of 34 patients enrolled in Part A showed improvements in SBP and/or standing time B Single dose, placebo-controlled TD-9855 increased SBP from a low baseline SBP dropped on placebo during the day as expected, in response to postural changes and eating No evidence of supine hypertension with TD-9855 overnight C Repeat dose extension phase Durability of effect observed through four weeks Reductions in symptom severity, most pronounced benefit in patients with symptomatic nOH1 Consistent increases in SBP through four weeks Generally well tolerated; no serious adverse events assessed as drug-related Patients started on Part A, and responders moved to Part B and/or Part C (extension phase) Registrational Phase 3 program in symptomatic nOH in advanced planning

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TD-1473: Encouraging Findings in Phase 1b Study 4-week treatment in 40 patients with active ulcerative colitis 1 Clinical response as measured by both partial and full Mayo 2 Surrogate biomarkers include C-reactive protein (CRP) and fecal calprotectin Key Findings Favorable overall safety and tolerability No systemic or opportunistic infections (including herpes zoster) No evidence of reduce white cell counts Minimal systemic exposure Plasma levels of TD-1473 very low Consistent in all cohorts to levels observed in healthy volunteers Biologic activity in GI tract Endoscopic improvements and mucosal healing reported in all active arms; none reported in placebo arm Rectal bleeding scores improved above placebo at highest two doses Rates of clinical response higher for all active doses compared to placebo1 Clinical responses matched by dose-dependent reductions in surrogate biomarkers2 Dose-related increases in local GI tissue drug concentrations; higher two doses produced mean concentrations above the JAK IC50 Detailed results presented in oral late-breaker at UEGW 2018; progressing into Phase 2 in Crohn’s disease and Phase 2b/3 in UC

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NDA supported by Phase 3 efficacy and safety studies Primary endpoint achieved for both doses in replicate efficacy studies Generally well tolerated in 12-month safety study Additional Phase 3 program results presented at fall meetings ERS International Congress: Descriptive data showed reductions in rates of exacerbations compared to placebo and tiotropium (Spiriva® Handihaler®) 2018 CHEST: Efficacy in patients with suboptimal PIFR particularly those with severe disease markers YUPELRITM: PDUFA Date November 13, 2018 Potential as first once-daily nebulized LAMA for COPD FEV1 = forced expiratory volume in one second; pooled analysis * ** * * * ** Monotherapy Concomitant LABA Pooled Population * P < 0.0001, ** P <0.001 versus placebo

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3Q 2018 Financial Highlights Three Months Ended, September 30, 2018 2017 ($, in thousands) Unaudited Total Revenue 12,838 4,275 Cost of Goods Sold 705 985 Research and Development1 52,693 39,343 Selling, General and Administrative1 21,890 20,944 Total Costs and Expenses 75,288 61,272 Operating Loss (62,450) (56,997) 1Amounts include share-based compensation expense following Research and Development 6,294 5,005 Selling, General and Administrative 5,452 5,680 Total Share-based Compensation Expense 11,746 10,685 Operating Loss excluding Share-based Compensation (50,704) (46,312) Cash, Cash Equivalents and Marketable Securities as of September 30, 2018 320,626

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Economic interest in Trelegy Ellipta Upward-tiering royalty of approximately 5.5% - 8.5% of worldwide net sales1 Passive economic interest; no product cost obligations Program Summary FF/UMEC/VI: Comprise of ICS, LAMA, and LABA, active components of Breo (FF/VI) and Anoro (UMEC/VI) Available in 16 countries Filed with regulatory authorities in China and Japan Phase 3 CAPTAIN asthma study to complete in early 2019 GSK’s Trelegy Ellipta Offers Significant Potential First and only once-daily single inhaler triple therapy All statements based on publically available information. Trelegy Ellipta jointly managed by GSK and Innoviva (formerly Theravance, Inc.) 1 TBPH holds 85% economic interest in upward tiering royalty stream of 6.5% – 10% payable by GSK. ICS = Inhaled corticosteroids. LABA = long-acting beta2-adrenergic agonist So Source: GSK; IQVIA NPA weekly TRx data Strongest US Ellipta launch to date Launched in US in November 2017 Economic interest in Trelegy – An important strategic asset1 Strong initial launch by GSK approaching first full year on market Approvals in nine additional regions expected in 2019 An important source of future funding for Theravance Biophama

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Opportunities to Create Transformational Medicines YUPELRITM (revefenacin) Nebulized LAMA in COPD PDUFA date November 13, 2018 and commercial launch, if approved TD-1473 Intestinally-restricted JAKi for inflammatory intestinal diseases Initiating Phase 2 study in Crohn’s disease and Phase 2b/3 study in ulcerative colitis TD-9855 NSRI in symptomatic neurogenic orthostatic hypotension Initiating Phase 3 program TD-8236 Inhaled JAK inhibitor for serious respiratory diseases Progression into first in human studies Research 2018 R&D Day to highlight new programs advancing towards clinic Focus on Strategic Priorities Commitment to developing transformational medicines 1 Economic interest managed by GSK and innoviva. FF/UMEC/VI= Fluticasone Furoate/Umeclidinium/Vilanterol. Innoviva formerly Theravance, Inc. All statements based on publicly available information. Managed by GSK and Innoviva1 Economic Interest Trelegy Ellipta1 (FF/UMEC/VI) Single inhaler triple therapy in COPD Potential label expansion in EU, regulatory approval in Japan and China Phase 3 CAPTAIN study (asthma) expected to complete in early 2019

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Q&A Thank you

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