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):  May 7, 2019

 


 

THERAVANCE BIOPHARMA, INC.

(Exact Name of Registrant as Specified in its Charter)

 


 

Cayman Islands
(State or Other Jurisdiction of
Incorporation)

 

001-36033
(Commission File Number)

 

98-1226628
(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

 

Securities registered pursuant to Section 12(b) of the Act:

 

Title of each class:

 

Trading Symbol(s)

 

Name of each exchange on which registered:

Ordinary Share $0.00001 Par Value

 

TBPH

 

NASDAQ Global Market

 

 

 


 

Item 2.02. Results of Operations and Financial Condition.

 

On May 7, 2019, Theravance Biopharma, Inc. issued a press release and is holding a conference call regarding its financial results for the quarter ended March 31, 2019 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 May 7, 2019

 

 

 

99.2

 

Slide deck entitled First Quarter 2019 Financial Results and Business Update

 

2


 

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: May 7, 2019

By:

/s/ Bradford J. Shafer

 

 

Bradford J. Shafer

 

 

Executive Vice President and General Counsel

 

3


Exhibit 99.1

 

 

Theravance Biopharma, Inc. Reports First Quarter 2019 Financial Results and Provides Business Update

 

·      Late-stage clinical studies of TD-1473 and ampreloxetine underway

 

·                  Phase 1 results including biomarker data in asthmatics for lung-selective inhaled pan-JAK inhibitor TD-8236 expected in third quarter 2019

 

·                  Product launch of YUPELRI® (revefenacin) inhalation solution progressing in partnership with Mylan

 

·                  GSK announced positive data from Phase 3 CAPTAIN study of TRELEGY ELLIPTA in patients with asthma

 

·                  Company has initiated arbitration against Innoviva to enforce its full TRELEGY ELLIPTA royalty rights

 

DUBLIN, IRELAND — MAY 7, 2019 — Theravance Biopharma, Inc. (“Theravance Biopharma” or the “Company”) (NASDAQ: TBPH) today reported financial results for the first quarter ended March 31, 2019. Revenue for the first quarter of 2019 was $5.3 million. First quarter operating loss was $73.7 million or $61.4 million excluding share-based compensation expense. Cash, cash equivalents, and marketable securities totaled $434.1 million as of March 31, 2019.

 

Rick E Winningham, Chief Executive Officer, commented: “As we continue to make progress in 2019, we remain highly focused on implementing our strategy to discover, develop and commercialize transformational medicines with the potential to address important unmet patient, payor and caregiver needs.

 

“The Phase 2 Crohn’s disease and Phase 2b/3 ulcerative colitis studies of TD-1473, our gut-selective pan-JAK inhibitor, are actively enrolling patients. Our registrational Phase 3 clinical program of ampreloxetine in symptomatic nOH is also underway, and we plan to present supportive five-month data from the completed Phase 2 study at scientific meetings in mid-2019. The Phase 1 study of TD-8236, our lung-selective JAK inhibitor, in healthy volunteers and asthmatic patients is ongoing and we expect to report results from the study in the third quarter of 2019.

 

“The YUPELRI launch is progressing following the commencement of formal sales and marketing efforts earlier this year in partnership with Mylan. In addition, sales of GSK’s TRELEGY ELLIPTA for COPD continue to accelerate supported by product approvals and launches in additional geographies, including the recent approval in Japan. We were pleased to see GSK’s recent announcement that the Phase 3 CAPTAIN study of TRELEGY ELLIPTA in patients with asthma met its primary endpoint, and GSK plans to submit the full dataset for regulatory review.

 

“Our strong cash position enables us to drive forward key programs in TD-1473, ampreloxetine, TD-8236, and YUPELRI, and to advance novel, organ-selective research programs toward the clinic. We intend to continue to build momentum throughout the year with a line-up of important milestones leading toward additional catalysts over the next 12 to 18 months as our late-stage trials mature, earlier-stage programs advance, and our commercial efforts gain traction,” concluded Mr. Winningham.

 

1


 

Program Updates

 

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

 

·                  Supplemental data from the Phase 1b study of TD-1473 in patients with ulcerative colitis to be shared in an oral presentation at Digestive Disease Week (DDW) in May 2019

·                  Phase 2 DIONE induction study in Crohn’s disease and registrational Phase 2b/3 RHEA induction and maintenance study in ulcerative colitis underway

 

Ampreloxetine (TD-9855, norepinephrine reuptake inhibitor (NRI)):

 

·                  5-month data from the Phase 2 study in patients with neurogenic orthostatic hypotension (nOH) to be presented at the International Association of Parkinsonism and Related Disorders (IAPRD) in June 2019 and selected for oral presentation at the 32nd European Neurology Congress (ENC) in July 2019

·                  Ongoing registrational Phase 3 program in symptomatic nOH comprised of two studies:

·                  4-week treatment study; and

·                  4-month open label study followed by a 6-week randomized withdrawal phase to demonstrate durability of response

 

TD-8236 (novel, lung-selective inhaled pan-JAK inhibitor for serious respiratory diseases):

 

·                  Phase 1 data expected in the third quarter of 2019; study designed to evaluate safety and provide biomarker data of TD-8236 in healthy volunteers and asthmatic patients

·                  Program goal in asthma is the prevention of exacerbations and the improvement of symptoms in patients uncontrolled by steroids despite compliance

·                  TD-8236 shown to potently inhibit targeted mediators of Th2-high and Th2-low asthma in human cells in preclinical studies

 

YUPELRI® (revefenacin) inhalation solution (lung-selective nebulized long-acting muscarinic antagonist (LAMA)):

 

·                  First and only once-daily, nebulized bronchodilator approved in the US for the maintenance treatment of patients with COPD

·                  Launch underway with partner Mylan; combined sales infrastructures covering the hospital, hospital discharge, and home health settings

 

TRELEGY ELLIPTA (first once-daily single inhaler triple therapy for COPD)1:

 

·                  First quarter 2019 net sales of $112.7 million; Theravance Biopharma entitled to approximately 5.5% to 8.5% (tiered) of worldwide net sales of the product

·                  Phase 3 CAPTAIN study in patients with asthma met primary endpoint:

·                  TRELEGY demonstrated statistically significant 110mL improvement in lung function compared with RELVAR/BREO

·                  GSK plans to submit data for regulatory review once full dataset is available

·                  Marketing authorization granted in Japan for the treatment for COPD; product now launched in 30 markets with the potential for an approval in China later this year

 

2


 


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 in TRC over the next four fiscal quarters). RELVAR/BREO ELLIPTA (the combination of fluticasone furoate and vilanterol)

 

First Quarter Financial Results

 

Revenue

 

Revenue from collaborative arrangements for the first quarter of 2019 was $5.3 million compared to $4.6 million in the same period in 2018. Total revenue decreased by approximately $3.0 million as compared to the first quarter of 2018. The decrease in total revenue resulted primarily from no product sales being recognized in the first quarter of 2019 following the sale of VIBATIV® to Cumberland Pharmaceuticals in late 2018.

 

Research and Development (R&D) Expenses

 

R&D expenses for the first quarter of 2019 were $53.8 million, compared to $47.8 million in the same period in 2018. The increase was primarily due to an increase in external and employee-related expenses. The increase in employee-related expenses includes the impact of the reduction in force announced in the first quarter of 2019. First quarter R&D expenses included non-cash share-based compensation of $6.2 million.

 

Selling, General and Administrative (SG&A) Expenses

 

SG&A expenses for the first quarter of 2019 were $25.2 million, compared to $24.7 million in the same period in 2018. The increase was primarily due to higher collaboration and employee-related expenses. The increase in employee-related expenses includes the impact of the reduction in force announced in the first quarter of 2019. First quarter SG&A expenses included non-cash share-based compensation of $6.1 million.

 

Cash, Cash Equivalents and Marketable Securities

 

Cash, cash equivalents and marketable securities, excluding restricted cash, totaled $434.1 million as of March 31, 2019.

 

2019 Financial Guidance

 

The Company’s guidance on operating loss excluding non-cash share-based compensation for the full year of 2019 remains unchanged at $210.0 million to $230.0 million. Operating loss guidance does not include royalty income for TRELEGY ELLIPTA which the Company recognizes as non-operating income. The Company’s share of US profits and losses related to the commercialization of YUPELRI, potential future business development collaborations as well as the timing and cost of clinical studies associated with its key programs, among other factors, could impact the Company’s financial guidance.

 

3


 

Arbitration Against Innoviva

 

As noted in the Innoviva, Inc. (“Innoviva”) Quarterly Report on Form 10-Q for the three months ended March 31, 20192 filed with the Securities and Exchange Commission on May 1, 2019, no distributions were made to Theravance Biopharma with respect to its 85% economic interest in Theravance Respiratory Company, LLC (“TRC LLC”) for the quarter ended December 31, 2018. As a result of this unjustified withholding of cash and Innoviva’s statement to Theravance Biopharma that it intends to cause TRC LLC to withhold making further cash distributions through calendar 2019, the Company has initiated an arbitration against Innoviva and TRC LLC regarding Innoviva’s material breach of its obligations to cause TRC LLC to make contractually-required distributions to the Company from royalties paid to TRC LLC by GlaxoSmithKline and its affiliates (collectively, “GSK”) related to GSK’s net sales of TRELEGY ELLIPTA.

 

Rick E Winningham, chairman and chief executive officer of Theravance Biopharma, commented: “Theravance Biopharma intends to aggressively enforce all aspects of its agreement with Innoviva and TRC LLC to ensure we continue receiving our stipulated 85% share of royalties linked to TRELEGY ELLIPTA net sales. We firmly believe there is no justification or legal basis for Innoviva to cause TRC LLC to withhold the Q4 2018 distributions, the 2019 distributions or any material amount of cash. We are confident that Theravance Biopharma will prevail in this dispute and retain all rights to its full portion of the TRELEGY ELLIPTA royalties paid to TRC LLC by GSK.”

 

In connection with Theravance Biopharma’s spin-off from Innoviva in 2014, the two companies (collectively, and including Theravance Biopharma affiliates who became members, the “Members”) entered into a limited liability company agreement (the “TRC LLC Agreement”) that established TRC LLC.  TRC LLC is jointly owned by the two companies despite being managed by Innoviva, and its purpose is to collect and disburse royalties from GSK’s sales of certain products, including TRELEGY ELLIPTA, to the Members. The terms of the Agreement plainly state that Member interests owned by Theravance Biopharma entitle it to 85% of the royalties paid to TRC LLC by GSK as a result of GSK’s net sales of TRELEGY ELLIPTA (net of TRC LLC expenses paid and the amount of cash, if any, expected to be used in TRC LLC over the next four fiscal quarters). The TRC LLC Agreement imposes express fiduciary duties on Innoviva equal to those of directors of a for-profit corporation and those of a controlling shareholder. To ensure that Innoviva causes TRC LLC to fulfill its contractual duties to distribute royalties, and to discharge its own fiduciary duties, the TRC LLC Agreement imposes significant limitations on Innoviva’s authority as manager, including requiring Theravance Biopharma’s consent before taking actions or omitting to take actions that would reasonably be expected to have a direct or indirect material and adverse effect on the Company’s economic interest in TRC LLC or its rights, preferences, privileges or obligations.

 

On November 30, 2018, an affiliate of Theravance Biopharma named Triple Royalty Sub LLC (the “Issuer”) closed a private placement of $250 million aggregate principal amount of non-recourse Triple PhaRMAsm 9% Fixed Rate Term notes due on or before April 15, 2033 (the “Notes”).  The Notes are secured by, and the primary source of funds to make payments on the Notes is, the Issuer’s 63.75% economic interest in any future payments made by GSK to TRC LLC (net of TRC LLC expenses paid and the amount of cash, if any, expected to be used in TRC LLC over the next four fiscal quarters).

 

The Notes bear an annual interest rate of 9%, with interest and principal payable quarterly beginning April 15, 2019. Through October 15, 2020, the terms of the Notes provide that to the extent there are insufficient funds to satisfy the Issuer’s scheduled quarterly interest obligations, the shortfall shall be

 

4


 

added to the principal amount of the Notes without a default or event of default occurring.  The terms of the Notes also provide that, at Theravance Biopharma’s option, the quarterly interest payment obligations can be satisfied by making a capital contribution to the Issuer, but not for more than four (4) consecutive quarterly interest payment dates or for more than six (6) quarterly interest payment dates during the term of the Notes. For the April 15, 2019 interest payment date, Theravance Biopharma R&D, Inc. (parent entity of Issuer) made a capital contribution to satisfy the interest payment obligations for that scheduled payment. If necessary, interest may be paid in-kind or Theravance Biopharma may exercise its capital contribution option in the near future while we arbitrate this dispute with Innoviva.

 

Rick E Winningham concluded:

 

“As we work to resolve this dispute in our favor, we will continue to execute on our go-forward strategy. Again, we firmly believe there is no justification or legal basis for Innoviva to cause TRC LLC to withhold any material amount of cash. We are confident that Theravance Biopharma will prevail in this dispute and retain all rights to its full portion of the TRELEGY ELLIPTA royalties paid to TRC LLC by GSK. We believe the arbitration process provided for under the Agreement will enable us to pursue and achieve a favorable resolution in a relatively timely manner.”

 

Quinn Emanuel Urquhart & Sullivan, LLP is serving as external counsel to Theravance Biopharma in this matter.

 


Notes:

2 As disclosed in Innoviva’s Condensed Consolidated Statement of Cash Flows and the Condensed Consolidated Statements of Stockholders’ Equity in the Form 10-Q for the three months ended March 31, 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 9890346. 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.

 

A replay of the conference call will be available on Theravance Biopharma’s website for 30 days through June 7, 2019. An audio replay will also be available through 8:00 pm ET on May 14, 2019 by dialing (855) 859-2056 from the U.S., or (404) 537-3406 for international callers, and then entering confirmation code 9890346.

 

About Theravance Biopharma

 

Theravance Biopharma, Inc. (“Theravance Biopharma”) is a diversified biopharmaceutical company primarily focused on the discovery, development and commercialization of organ-selective medicines. Our purpose is to create transformational medicines to improve the lives of patients suffering from serious illnesses. Our research is focused in the areas of inflammation and immunology.

 

5


 

In pursuit of our purpose, we apply insights and innovation at each stage of our business and utilize our internal capabilities and those of partners around the world. We apply organ-selective expertise to biologically compelling targets to discover and develop medicines designed to treat underserved localized diseases and to limit systemic exposure, in order to maximize patient benefit and minimize risk. These efforts leverage years of experience in developing lung-selective medicines to treat respiratory disease, including FDA-approved YUPELRI® (revefenacin) inhalation solution indicated for the maintenance treatment of patients with chronic obstructive pulmonary disease (COPD). Our pipeline of internally discovered programs is targeted to address significant patient needs.

 

We have an economic interest in potential future payments from 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® and the Cross/Star logo are registered trademarks of the Theravance Biopharma group of companies. YUPELRI® is a United States registered trademark of Mylan Specialty L.P. 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 current dispute with Innoviva and TRC LLC, 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 potential that the Company’s research programs will progress product candidates into the clinic, the Company’s expectations for product candidates through development, potential regulatory approval and commercialization (including their differentiation from other products or potential products), product sales or profit share revenue and the Company’s expectations for its 2019 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: the nature of the current dispute with Innoviva and TRC LLC, the uncertainty of arbitration and litigation and the possibility that an arbitration award or litigation result involving the current dispute could be adverse to the Company, delays or difficulties in commencing, enrolling or completing clinical studies, the potential that results from clinical or non-clinical studies indicate the Company’s compounds or product candidates are unsafe or ineffective, 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

 

6


 

with or relying on third parties to discover, develop, manufacture and commercialize products, and risks associated with establishing and maintaining sales, 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-K filed with the Securities and Exchange Commission (SEC) on February 28, 2019 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:

 

For general corporate:

Jessica Stitt

650-808-4045

investor.relations@theravance.com

 

For Innoviva dispute:

Profile

Greg Marose / Charlotte Kiaie, 347-343-2999
gmarose@profileadvisors.com / ckiaie@profileadvisors.com

 

7


 

THERAVANCE BIOPHARMA, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(In thousands, except per share data)

 

 

 

Three Months Ended March 31,

 

 

 

2019

 

2018

 

 

 

(Unaudited)

 

Revenue:

 

 

 

 

 

Product sales

 

$

 

$

3,679

 

Collaboration revenue

 

5,338

 

4,640

 

Total revenue

 

5,338

 

8,319

 

 

 

 

 

 

 

Costs and expenses:

 

 

 

 

 

Cost of goods sold

 

 

826

 

Research and development (1)

 

53,818

 

47,765

 

Selling, general and administrative (1)

 

25,186

 

24,704

 

Total costs and expenses

 

79,004

 

73,295

 

Loss from operations

 

(73,666

)

(64,976

)

Income from investment in TRC, LLC

 

6,229

 

686

 

Interest expense

 

(7,858

)

(2,137

)

Interest and other income, net

 

2,795

 

1,484

 

Loss before income taxes

 

(72,500

)

(64,943

)

Provision for income tax expense

 

(80

)

(144

)

Net loss

 

$

(72,580

)

$

(65,087

)

 

 

 

 

 

 

Net loss per share:

 

 

 

 

 

Basic and diluted net loss per share

 

$

(1.32

)

$

(1.22

)

Shares used to compute basic and diluted net loss per share

 

54,938

 

53,256

 

 


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

 

 

 

Three Months Ended March 31,

 

(In thousands)

 

2019

 

2018

 

Research and development

 

$

6,159

 

$

6,559

 

Selling, general and administrative

 

6,061

 

7,439

 

Total share-based compensation expense

 

$

12,220

 

$

13,998

 

 

8


 

THERAVANCE BIOPHARMA, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(In thousands)

 

 

 

March 31,

 

December 31,

 

 

 

2019

 

2018

 

 

 

(Unaudited)

 

(1)

 

Assets

 

 

 

 

 

Current assets:

 

 

 

 

 

Cash and cash equivalents and short-term marketable securities

 

$

434,058

 

$

505,276

 

Receivables from collaborative arrangements

 

7,824

 

10,053

 

Other prepaid and current assets

 

25,351

 

17,494

 

Total current assets

 

467,233

 

532,823

 

Property and equipment, net

 

12,899

 

13,176

 

Long-term marketable securities

 

 

11,869

 

Operating lease assets

 

48,861

 

 

Restricted cash

 

833

 

833

 

Other assets

 

1,439

 

1,534

 

Total assets

 

$

531,265

 

$

560,235

 

 

 

 

 

 

 

Liabilities and Shareholders’ Deficit

 

 

 

 

 

Current liabilities

 

$

113,542

 

$

98,554

 

Convertible senior notes due 2023, net

 

225,086

 

224,818

 

Non-recourse notes due 2033, net

 

221,402

 

229,535

 

Operating lease liabilities

 

48,493

 

 

Other long-term liabilities

 

35,994

 

58,917

 

Shareholders’ deficit

 

(113,252

)

(51,589

)

Total liabilities and shareholders’ deficit

 

$

531,265

 

$

560,235

 

 


(1)  The condensed consolidated balance sheet as of December 31, 2018 has been derived from the audited consolidated financial statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2018.

 

9


Exhibit 99.2

Theravance Biopharma, Inc. (NASDAQ: TBPH) First Quarter 2019 Financial Results and Business Update May 7, 2019 THERAVANCE®, the Cross/Star logo, and MEDICINES THAT MAKE A DIFFERENCE® are registered trademarks of the Theravance Biopharma group of companies. All third party trademarks used herein are the property of their respective owners. © 2019 Theravance Biopharma. All rights reserved.

GRAPHIC

 

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 may include the current dispute with Innoviva, Inc. and TRC LLC, statements relating to 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 potential that the company’s research programs will progress product candidates into the clinic, the company’s expectations for product candidates through development, potential regulatory approval and commercialization (including their differentiation from other products or potential products), product sales or profit share revenue and the company’s expectations for its 2019 operating loss, excluding share-based compensation. 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-K filed with the Securities and Exchange Commission (SEC) on February 28, 2019, and other periodic reports filed with the SEC. 2

 

Significant existing cash resources to fund strategic priorities2 Focus on Strategic Priorities COMMITMENT TO CREATING TRANSFORMATIONAL MEDICINES 3 1 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). All statements based on publically available information. 2 Cash of approximately $434M as of March 31, 2019 (cash, cash equivalents, and marketable securities) Opportunities to Create Transformational Medicines YUPELRI® Nebulized LAMA in COPD Formal commercial launch underway TD-1473 Intestinally-restricted JAKi for inflammatory intestinal diseases Phase 2 DIONE study in Crohn’s disease underway Phase 2b/3 RHEA study in ulcerative colitis underway Supplemental Phase 1b data to be shared in oral presentation at DDW Ampreloxetine NRI in symptomatic neurogenic orthostatic hypotension Registrational Phase 3 program progressing 5-month data from Phase 2 in nOH to be shared at IAPRD and ENC TD-8236 Lung-selective inhaled pan-JAK inhibitor for serious respiratory diseases Safety and biomarker data from Phase 1 study in healthy volunteers and asthmatic patients expected 3Q19 Economic Interest TRELEGY ELLIPTA1 (FF/UMEC/VI) Single inhaler triple therapy in COPD Product launched in 30 markets, including Japan; additional geographies expected throughout 2019 (incl. China) Positive results from Phase 3 CAPTAIN study in patients with asthma recently announced Potential sNDA in 2H 2019

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GSK’s TRELEGY ELLIPTA FIRST AND ONLY ONCE-DAILY SINGLE INHALER TRIPLE THERAPY 4 Economic interest in TRELEGY ELLIPTA Upward-tiering royalty of ~5.5% - 8.5% of worldwide net sales1 Passive economic interest; no product cost obligations Growth continues after first full year on market Available in 30 markets, including recent Japan launch Additional geographies expected in 2019; potential for China approval and launch later this year Phase 3 asthma study met primary endpoint; data to be submitted for regulatory review once full dataset available TRELEGY ELLIPTA is FF/UMEC/VI or fluticasone furoate/umeclidinium/vilanterol; comprised of ICS, LAMA, and LABA, active components of Breo (FF/VI) and Anoro (UMEC/VI). 1 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). All statements based on publically available information. sNDA: supplemental new drug application 20 40 60 80 100 120 140 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 TRx Volume (Thousands) Month Post Launch Strongest US ELLIPTA Launch to Date ANORO ARNUITY BREO INCRUSE TRELEGY Launched in US in November 2017 Source : GSK, IQVIA NPA weekly TRx data. This information is an estimate derived from the use of information under license from the following IQVIA information service: NPA for the time period Sept 2013 through March 2019. IQVIA expressly reserves all rights, including rights of copying, distribution, & republication.

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5 TD-1473 Research Vision ORAL GUT-SELECTIVE PAN-JAK INHIBITOR Treat disease at site to maximize efficacy Optimize pharmacology to include potent inhibition of Tyk2 Improve upon the efficacy of a clinically validated target WARNING: SERIOUS INFECTIONS AND MALIGNANCY See full prescribing information for complete boxed warning. Tofacitinib Dose Proportional Efficacy in UC Ph 21 Patients with Clinical Response, % Tofacitinib (mg) Inhibitory potency (pKi) IL-12 and IL-23 inhibition 1 Sandborn WJ, et al. N EnglJ Med 2012;367:616-24 TD-1473 advancing in Phase 2 study in Crohn’s disease and Phase 2b/3 study in ulcerative colitis

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Phase 3 induction, 2 arms (N=640) Dose-confirming induction, 8 weeks Phase 2b induction, 4 arms (N=240) Dose-finding induction, 8 weeks 6 Phase 3 maintenance 44 weeks Phase 2b/3 study in ulcerative colitis Phase 2 study in Crohn’s disease Phase 2 study, 3 arms (N=160) Dose-finding induction, 12 weeks Active treatment extension, 2 arms 48 weeks Responders Responders TD-1473 Clinical Program LATE STAGE STUDIES IN ULCERATIVE COLITIS AND CROHN’S DISEASE

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7 Conventional Systemic Compound EFFECTIVE NON-EFFECTIVE DOSE-LIMITING SAFETY NON-EFFECTIVE DOSE-LIMITING SAFETY EFFECTIVE Theravance Biopharma Organ-selective Compound Illustrated example: lung selectivity Opportunity to increase dose for improved efficacy, without cost of systemic safety risk Expanded therapeutic index Often unable to achieve maximal efficacy due to dose limiting safety Narrow therapeutic index Organ-selective Approach COMPOUNDS DESIGNED TO FULLY HARNESS INTENDED BIOLOGY

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Gut-selective Design INFLAMMATION TREATED AT THE TISSUE OF INTEREST 8 Metabolism Gut-selective JAK inhibitor Absorption Metabolism Absorption Systemic JAK inhibitor To feces Gut wall & mucosa Liver Portal vein Intestine To feces Gut wall & mucosa Liver Portal vein Intestine Systemic Circulation Systemic Circulation Systemically available drug eliminated by the liver via first pass metabolism

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TD-1473: Innovative Approach in Treating IBD compelling Preclinical PACKAGE AND ENCOURAGING Phase 1b DATA 9 Gut selectivity Potent inhibition of Tyk2 Anti-inflammatory activity in disease model Lumen Vehicle treated control TD-1473 treatment Inhibitory potency (pKi) Tyk2 7.5 8 8.5 9 9.5 10 Tofacitinib TD-1473

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10 Ampreloxetine: Top-line Phase 2 Results in nOH PART B and C: VERSUS PLACEBO AND REPEAT DOSE EXTENSION PHASE Positive results including durability of effect provide basis for registrational Phase 3 program in symptomatic nOH SBP = systolic blood pressure. OHSA = orthostatic hypotension symptom assessment. OHSA #1 is a measurement of dizziness, a cardinal symptom of nOH. 1 Symptomatic defined as OHSA #1 > 4. Durability of effect observed at four weeks and five months in the completed Phase 2 trial of ampreloxetine in patients with nOH Part B: Change from baseline SBP Part C: Durability of effect observed in repeat-dose open-label extension phase Reductions in symptom severity, with most pronounced benefit in patients with symptomatic nOH Mean reduction in OHSA #1 = 2.4 at four weeks (n=16) 13 completers had OHSA #1 > 4 at baseline; mean reduction in this group = 3.8 at four weeks LS Mean+ / - SE Change from Baseline (mmHg)

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Ampreloxetine Clinical Program PHASE 3 REGISTRATIONAL PROGRAM IN SYMPTOMATIC NOH 11 De Novo Study 0169 4 weeks (N=188) Randomized, double blind, placebo-controlled, parallel group study Study 0170 22 weeks (N=258) Randomized 6-week withdrawal phase (preceded by 4-month open label) Supportive 5-month treatment data from Phase 2 study to be presented IAPRD and ENC

 

TD-8236: Lung-selective pan-JAK Inhibitor POTENTIAL TO ADDRESS PATIENTS NEEDS REGARDLESS OF TH2 PHENOTYPE JAK/STAT cytokines implicated in severe asthma Patient heterogeneity in severe asthma 19 Neutrophilic 38 Th2-low 29 Eosinophilic Paucigranulocytic Bold denotes biologics in development or approved 7 Mixed granulocytic   Novel approved biologics address only Th2-high asthma Key treatment needs: Prevention of exacerbations and symptom control for patients regardless of Th2 phenotype Simpson JL, et al. Resp 2006;11:54-61. 12 19-9489-1C2.1P1 Phase 1 study data in healthy volunteers and asthmatic patients (including biomarker measures) expected 3Q19 TD-8236 shown to potently inhibit targeted mediators of Th2-high and Th2-low asthma in human cells in preclinical studies Th2-high Th2-high Th2-low IL-4 IL-23/IL-12 IL-13 IL-6 IL-5 IL-27 TSLP IFN-

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YUPELRI®: Formal Commercial Launch Underway FDA-APPROVED FOR THE MAINTENANCE TREATMENT OF COPD 13 YUPELRI® (revefenacin) inhalation solution. Approved for the maintenance treatment of patients with COPD. COPD = Chronic Obstructive Pulmonary Disease. 1 Global Strategy for Diagnosis, Management, and Prevention of COPD. 2 Suboptimal Inspiratory Flow Rates Are Associated with COPD and All Cause Readmissions. Loh et al., Annals of ATS 2017. First and only once-daily bronchodilator delivered in a nebulizer Higher of two doses approved: 175 mcg once daily, for use with any standard jet nebulizer Unmet need for nebulized LAMA therapy Once-daily LAMAs are first-line therapy for moderate to severe COPD1 No once-daily nebulized LAMAs available previously; only available in handheld devices Nebulized therapy associated with reduced hospital readmissions in low PIFR patients2

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Partnership with Mylan Provides Commercial Strength in Nebulized Opportunity 14 HD = hospital discharge. 1 IMS Health information service: NSP for period MAT May, 2015. Excludes nebulized SABAs. IMS expressly reserves all rights, including rights of copying, distribution and republication. 2 TBPH market research (N = 160 physicians); refers to US COPD patients. Enduring patient niche and significant market opportunity >100M patient treatment days in nebulized COPD segment1 9% of COPD patients currently use nebulizers for ongoing maintenance therapy2 41% of COPD patients use nebulizers at least occasionally for bronchodilator therapy2 Combined sales infrastructures to cover Hospital, Hospital Discharge and Home Health settings HD +

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YUPELRI® Launch Update ENCOURAGING INITIAL MARKET RESPONSE ACCESS FORMULARY PATIENT 17 Wins (equates to 63 accounts) Field force productivity goals exceeded ~50% Commercial 72 Reviews Scheduled (~280 potential accounts) 100% Medicare Part B (for patients with supplemental insurance) ~4,500 patients prescribed to date 100% medical support requests fulfilled <30 days 15 19-9489-1C2.2P3

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First Quarter 2019 Financial Highlights Three Months Ended, March 31, ($, in thousands) 2019 2018 (Unaudited) - 5,338 Product sales Collaboration revenue Total revenue Cost of good sold Research and development1 Selling, general and administrative1 Total costs and expenses Loss from operations 3,679 4,640 5,338 - 53,818 25,186 8,319 826 47,765 24,704 79,004 73,295 (73,666) (64,976) Share-based compensation expense Research and Development Selling, General and Administrative Total Share-based Compensation Expense Operating Loss excluding Share-based Compensation 6,159 6,061 6,559 7,439 12,220 13,998 (61,446) (50,978) 1Amounts include share-based compensation 2 Cash, cash equivalents, and short-term marketable securities 16 19-9489-1C2.2P4 Strong financial position with $434M in cash as of the end of the first quarter2

 

Strategic Focus with Inflection Points Near-and Long-term   Differentiated organ-selective projects advancing to clinical development Economic interest in TRELEGY ELLIPTA serves as an important strategic asset1 – Strong launch following approvals in US and EU in late 2017 1 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). YUPELRI® (revefenacin) inhalation solution. Approved for the maintenance treatment of patients with COPD. NRI: norepinephrine reuptake inhibitor. LAMA: long-acting muscarinic antagonist. JAKi: Janus kinase inhibitor. 17 19-9489-1C2.1P2 YUPELRI®, ampreloxetine, and TD-1473 each internally discovered and developed by R&D engine which serves as important driver of long-term value TD-1473 (JAKi) Phase 2 DIONE study in Crohn’s disease and Phase 2b/3 RHEA study in ulcerative colitis ongoing Partnered with Janssen YUPELRI® (LAMA) Formal Launch Underway First and only once-daily nebulized LAMA for treatment of COPD Partnered with Mylan Ampreloxetine (NRI) Pivotal Phase 3 program in symptomatic nOH progressing Durable improvements in symptoms observed in Phase 2 four-week results in nOH

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