UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM
Current Report Pursuant
to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event Reported):
(Exact Name of Registrant as Specified in its Charter)
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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):
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).
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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. ¨
Securities registered pursuant to Section 12(b) of the Act:
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Item 2.02. Results of Operations and Financial Condition.
On November 5, 2020, Theravance Biopharma, Inc. issued a press release and is holding a conference call regarding its financial results for the quarter ended September 30, 2020 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. Additionally, a copy of an Appendix of additional materials is furnished as Exhibit 99.3 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, 99.2 and 99.3, 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 5, 2020 | |
| 99.2 | Slide deck entitled Third Quarter 2020 Financial Results and Business Update | |
| 99.3 | Appendix slide deck | |
| 104 | Cover Page Interactive Data File (cover page XBRL tags embedded within the Inline XBRL document) |
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 5, 2020 | By: | /s/ Andrew Hindman |
| Andrew Hindman | ||
| Senior Vice President and Chief Financial Officer | ||
Exhibit 99.1
Theravance Biopharma, Inc. Reports Third Quarter 2020 Financial Results and Provides Business Update
| · | YUPELRI® (revefenacin) share of the nebulized COPD market increased to 17.4% through July 2020 (up from 16% in April 2020) and achieved brand profitability on a stand-alone basis |
| · | Company updating timelines for ampreloxetine and TD-1473 – top-line results expected in Q3 2021 |
| · | TD-8236 reduced FeNO and pSTAT via JAK inhibition in the Phase 1 Part C study in moderate-to-severe asthmatics but did not meet the primary endpoint of the Phase 2a Lung Allergen Challenge study |
| · | TD-0903 data from Phase 1 provided confidence to continue dosing patients in a Phase 2 study; Phase 2 results expected in Q2 2021 |
| · | The Company updates 2020 financial guidance |
DUBLIN, IRELAND – NOVEMBER 5, 2020 – Theravance Biopharma, Inc. (“Theravance Biopharma” or the “Company”) (NASDAQ: TBPH) today reported financial results for the third quarter ending September 30, 2020. Theravance Biopharma’s Total Revenue for the third quarter 2020 was $18.3 million. Operating loss was $76.6 million, or $61.1 million excluding share-based compensation expense. Cash, cash equivalents and marketable securities totaled $358.3 million as of September 30, 2020.
In connection with the commercialization of YUPELRI®, the Company is entitled to a share of U.S. profits and losses (65% to Mylan; 35% to the Company) pursuant to its agreement with Mylan. While Mylan records the total Net Sales of YUPELRI within its financial statements, Theravance Biopharma’s implied 35% share of net sales for YUPELRI during Q3 2020 was $13.0 million (up from $5.8 million in Q3 2019). Going forward, Theravance Biopharma will report its implied 35% of Net Sales for YUPELRI in public communications and in the Company’s quarterly SEC filings on Form 10-Q and Form 10-K.
“YUPELRI gained market share, delivered sales growth versus the second quarter and achieved brand profitability for Theravance Biopharma thanks to the efforts of the Mylan and Theravance Biopharma commercial teams. Based on the constraints posed by the pandemic, the team implemented a hybrid model of virtual selling, utilizing digital resources and in-person meetings when and where permitted, ” said Rick E Winningham, Chief Executive Officer.
“Despite ongoing challenges and the uncertain environment created by the global pandemic, we have seen a significant uptick in clinical trial enrollment. We therefore have more confidence in guiding to Phase 3 results for ampreloxetine for symptomatic neurogenic orthostatic hypotension (nOH) and for TD-1473 Phase 2b results in ulcerative colitis and Phase 2 results in Crohn’s disease in Q3 2021.”
“We completed the TD-8236 Phase 1 Part C and Phase 2a Lung Allergen Challenge (LAC) study. The LAC study represented the first time an inhaled JAK inhibitor was studied in such a model. We met our primary objectives with the Phase 1 Part C study in moderate-to-severe asthmatics dosing TD-8236 with an inhaled corticosteroid. Decreases in key inflammatory biomarkers were seen in the TD-8236 plus steroid arm versus the steroid alone arm. Gene expression and cytokine data from the Phase 1 Part C is still under analysis. While we are still reviewing the full data set, TD-8236 as a single agent did not meet the primary objective of the Phase 2a LAC study.”
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“In regard to TD-0903, we have had a chance to review the Phase 1 data. Results showed favorable safety and tolerability profile across the full range of nebulized doses and low systemic levels of TD-0903 in the systemic circulation, consistent with the lung-selective design. This has given us confidence as we continue to dose patients in the Phase 2 COVID-19 trial, which is being conducted in multiple locations around the world with results expected in Q2 2021.”
Corporate Highlights
YUPELRI® (revefenacin) inhalation solution (lung-selective nebulized long-acting muscarinic antagonist (LAMA)):
| · | First and only once-daily, nebulized bronchodilator approved in the U.S. for the maintenance treatment of patients with chronic obstructive pulmonary disease (COPD), reimbursed by Part B Medicare program |
| · | Overall market challenges remain due to COVID-19, yet YUPELRI increased market share and achieved quarter-over-quarter net sales growth of 22%; achieved stand-alone brand profitability in Q3 2020 |
| · | Data as of July 2020 show that YUPELRI achieved 17.4% share (up from 16% in April 2020) of the long-acting nebulized bronchodilator market and 93% share (up from 91.8% in Q2 2020) of the nebulized LAMA market; market data reflects IQVIA Retail Data and the Durable Medical Equipment (DME) market segment |
Key Pipeline Progress
The COVID-19 pandemic has made it difficult to operate a business in many ways and none more so than in clinical trials. Despite the challenges, Theravance Biopharma has been encouraged by the response to our ongoing clinical trial recruitment efforts. By design, both ampreloxetine and TD-1473 clinical programs employ geographical diversity, which has allowed the Company to continue to work closely with sites to continue enrollment where possible.
Ampreloxetine (TD-9855, norepinephrine reuptake inhibitor (NRI) for symptomatic nOH):
| · | Ongoing registrational program in symptomatic nOH comprised of: |
| o | Phase 3 four-week treatment study (SEQUOIA) to demonstrate efficacy expected to read out in Q3 2021 |
| o | Phase 3 four-month open-label study followed by a six-week randomized withdrawal phase (REDWOOD) to demonstrate durability of response |
| o | Phase 3 26-week open-label study (OAK), which is a long-term extension study that will be ongoing at the time of registration, to allow subjects completing REDWOOD to have continued access to ampreloxetine for up to 3.5 years and to collect safety and tolerability data over the course of treatment |
| · | Given the ongoing pandemic and the fragility of the patient population, the Company worked with the U.S. Food and Drug Administration (FDA) and other regulatory agencies to update the protocol for these clinical trials to accommodate a decentralized approach in which patients can participate in the majority of the study from home without needing to attend clinic visits; this infrastructure, leveraging a telemedicine platform and in-home healthcare assessments, is now being rolled out globally. |
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TD-1473 (gut-selective oral pan-Janus kinase (JAK) inhibitor for inflammatory intestinal diseases):
| · | RHEA (this program consists of 3 separate studies in Ulcerative Colitis): |
| o | Phase 2b eight-week placebo-controlled dose-finding induction study expected to read out in Q3 2021 |
| o | Phase 3 eight-week placebo-controlled dose-confirming induction study to start after dose selection based on Phase 2b Induction Study results (to be initiated post-Janssen opt-in) |
| o | Phase 3 44-week placebo-controlled maintenance study in which subjects roll over from either the Phase 2b or Phase 3 Induction Study |
| · | DIONE: |
| o | Phase 2 placebo-controlled induction study in Crohn’s disease expected to read out in Q3 2021 with patients given the potential to continue to receive ongoing access to TD-1473 as part of a long-term extension study |
TD-5202 (gut-selective irreversible JAK3 inhibitor for inflammatory intestinal diseases):
| · | TD-5202 was generally well-tolerated as a single oral dose up to 2,000 milligrams and as a twice-daily oral dose up to 2,000 milligrams total per day given for 10 consecutive days in healthy subjects |
TD-8236 (lung-selective inhaled pan-JAK inhibitor for inflammatory lung diseases):
| · | The Part C extension portion of the Phase 1 trial assessing additional biomarkers in moderate-to-severe asthmatics demonstrated biomarkers of JAK target engagement (pSTAT1 and pSTAT6) were reduced in cellular fractions of bronchoalveolar lavage fluid after 7 days of once-daily dosing at a dose level of 1500 µg |
| · | TD-8236 is the first JAK inhibitor to be studied in a Phase 2a Lung Allergen Challenge (LAC) study; TD-8236 had no impact on decrease in lung function (FEV1) following the LAC study after 14 days of once-daily dosing at dose levels of 150 µg and 1500 µg |
| o | FeNO was reduced at 1500 µg consistent with previous studies; lack of FeNO response at 150 µg and lack of effect on late asthmatic response (LAR) at 150 µg was expected based on previous studies |
| o | TD-8236 engages the JAK mechanism at a dose of 1500 µg as evidenced by the reductions in FeNO consistent with Phase 1; lack of effect on the LAR at 1500 µg in the LAC study was inconsistent with expectations |
The collective data set (pre-clinical, Phase 1, Phase 2a) demonstrates TD-8236 engages the JAK mechanism at a dose of 1500 µg as evidenced by the reduction in FeNO and reductions in pSTAT. The Company will continue to analyze the data set including the forthcoming gene expression and cytokine data from the Phase 1 Part C study.
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TD-0903 (nebulized lung-selective pan-JAK inhibitor for acute hyperinflammation of the lung in COVID-19 and chronic inflammation for the prevention of lung transplant rejection):
For treatment of Acute Lung Injury caused by COVID-19
| · | Completed Phase 1 study to assess the safety, tolerability and pharmacokinetics (PK) of single- and multiple-ascending doses (SAD/MAD) in healthy volunteers; data provided confidence to continue dosing patients in a Phase 2 study |
| o | Favorable safety and tolerability profile across the full range of nebulized doses from 1 to 10 mg after once-daily dosing for 7 days |
| o | Low systemic levels of TD-0903 in the blood, consistent with lung-selective design |
| o | PK profile supports long duration of exposure in the lung, consistent with pre-clinical models and supporting once-daily dosing |
| · | Initiated Phase 2 study in June 2020; Part 1 was a multiple dose-ascending study (from 1 to 10 mg doses) conducted in 24 hospitalized COVID-19 patients that has now completed dosing. Part 2 is a randomized, double-blind, parallel-group study evaluating efficacy and safety of one dose of TD-0903 compared with placebo in approximately 200 hospitalized COVID-19 patients; the Company expects to report results of the Phase 2 study in Q2 2021 |
The ongoing effects of the COVID-19 pandemic present a substantial public health and economic challenge, affecting our employees, patients, communities, clinical trial sites, suppliers, business partners and business operations. The full extent to which the COVID-19 pandemic will continue to directly or indirectly impact our business will depend on future developments that are highly uncertain, including the ongoing spread of the virus globally, and the actions taken to contain or treat it.
Economic Interest
TRELEGY (first once-daily single inhaler triple therapy for COPD)1:
| · | 3Q 2020 net sales of $251.9 million (up from $172.8 million in Q3 2019); Theravance Biopharma is entitled to approximately 5.5% to 8.5% (tiered) of worldwide net sales of the product |
| · | GSK received FDA approval to expand the label to include asthma on September 9, 2020; the European Medicines Agency accepted the regulatory submission for the treatment of asthma in adults supported by the Phase III CAPTAIN study |
| · | GSK received a Complete Response Letter for the addition of the mortality indication |
Notes:1 As reported by Glaxo Group Limited or one of its affiliates (GSK); reported sales converted to USD; economic interest related to TRELEGY (the combination of fluticasone furoate, umeclidinium, and vilanterol, (FF/UMEC/VI), jointly developed by GSK and Innoviva, Inc.) entitles the Company to upward tiering payments equal to approximately 5.5% to 8.5% on worldwide net sales of the product (net of Theravance Respiratory Company, LLC (TRC) expenses paid and the amount of cash, if any, expected to be used in TRC over the next four fiscal quarters). 75% of the income from the Company’s investment in TRC is pledged to service outstanding notes, 25% of income from the Company’s investment in TRC is retained by the Company.
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Innoviva and Theravance Respiratory Company
On June 10, 2020, the Company disclosed in a Form 8-K that it had formally objected to Theravance Respiratory Company, LLC (“TRC”) and Innoviva, as the manager of TRC, regarding their proposed plan to use TRELEGY royalties to invest in certain privately-held companies, funds that would otherwise be available for distribution to the Company under the terms of the TRC LLC Agreement. The Company intends to continue to seek to protect its interests in this matter consistent with the dispute resolution procedures of the TRC LLC Agreement. In this regard, the Company initiated an arbitration proceeding against Innoviva and TRC in October 2020 challenging the authority of Innoviva and TRC to pursue such a business plan rather than distribute such funds to the Company in a manner consistent with the LLC Agreement and the Company’s 85% economic interest in TRC. An arbitration hearing is scheduled for the first quarter of 2021.
Third Quarter Financial Results
| · | Revenue: Total revenue for the third quarter of 2020 was $18.3 million, comprised of non-cash collaboration revenue of $7.3 million primarily attributed to the Janssen collaboration agreement for TD-1473 and $11.0 million in Mylan collaboration revenue related to net sales of YUPELRI. Total revenue for the third quarter represents a $5.8 million increase over the same period in 2019. The increase was primarily due to a $7.4 million increase in Mylan collaboration revenue which was partially offset by a $1.6 million decrease in Janssen collaboration revenue. The decrease in Janssen collaboration revenue was due to a smaller portion of revenue recognized in the third quarter 2020 related to the $100.0 million upfront payment from the Janssen collaboration agreement that was entered into in February 2018. |
| · | YUPELRI: The Mylan collaboration revenue of $11.0 million represents amounts receivable from Mylan and is comprised of the Company’s implied 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 by us are recorded within operating expenses. While Mylan records the total net sales of YUPELRI within its financial statements, our implied 35% share of net sales of YUPELRI for the third quarter of 2020 was approximately $13.0 million. Going forward, we will report our implied 35% share of net sales for YUPELRI in future communications. |
| · | Research and Development (R&D) Expenses: R&D expenses for the third quarter of 2020 were $67.4 million, compared to $52.0 million in the same period in 2019. The $15.4 million increase was primarily due to (i) a $10.2 million increase in external-related expenses related to the advancement of our priority programs, notably the continued progression of TD-1473, ampreloxetine, TD-8236, and the initiation of TD-0903 in COVID-19; (ii) a $3.5 million increase in employee-related expenses primarily due to increases in compensation-related expenses; and (iii) a $1.3 million increase in share-based compensation expense primarily due to an increase in annual grants of share-based awards to employees. Third quarter R&D expenses included total non-cash share-based compensation of $7.8 million. |
| · | Selling, General and Administrative (SG&A) Expenses: SG&A expenses for the third quarter of 2020 were $27.5 million, compared to $25.6 million in the same period in 2019. The $1.9 million increase was primarily attributed to (i) a $1.2 million increase in employee-related expenses primarily due to increases in compensation-related expenses; (ii) a $1.2 million increase in share-based compensation expense primarily due to an increase in annual grants of share-based awards to employees; and (iii) a $0.6 million increase in facilities and other expenses. These increases were partially offset by a $1.2 million decrease in external-related expenses primarily related to legal and consulting services. Third quarter SG&A expenses included total non-cash share-based compensation of $7.8 million. |
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| · | Cash, Cash Equivalents and Marketable Securities: Cash, cash equivalents and marketable securities totaled $358.3 million as of September 30, 2020. |
2020 Financial Guidance
| · | Operating Loss (excluding share-based compensation): The Company is changing financial guidance and expects full-year 2020 operating loss, excluding share-based compensation, of $225 million to $235 million. Operating loss guidance does not include: |
| o | Royalty income for TRELEGY which the Company recognizes in its statement of operations as “income from investment in TRC, LLC;” or |
| o | Potential future business development collaborations |
Annual Meeting
The Company will hold its 2021 Annual General Meeting on April 27, 2021.
Conference Call and Live Webcast Today at 5 pm ET
Theravance Biopharma will hold a conference call and live webcast accompanied by slides today at 5 pm ET / 2 pm PT / 10 pm GMT. To participate in the live call by telephone, please dial (855) 296-9648 from the U.S. or (920) 663-6266 for international callers, using the confirmation code 1269525. 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.
A replay of the conference call will be available on Theravance Biopharma’s website for 30 days through December 5, 2020. An audio replay will also be available through 8:00 pm ET on November 12, 2020 by dialing (855) 859-2056 from the U.S., or (404) 537-3406 for international callers, and then entering confirmation code 1269525.
About Theravance Biopharma
Theravance Biopharma, Inc. 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.
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.
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We have an economic interest in potential future payments from Glaxo Group Limited or one of its affiliates (GSK) pursuant to its agreements with Innoviva, Inc. relating to certain programs, including TRELEGY.
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 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 2020 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: current and potential future disagreements with Innoviva, Inc. and TRC LLC, the uncertainty of arbitration and litigation and the possibility that an arbitration award or litigation result 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 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. In addition, while we expect the COVID-19 pandemic to continue to adversely impact our business operations and financial results, the extent of the impact on our ability to generate revenue from YUPELRI, our clinical development programs (in particular our later stage clinical programs for TD-1473 and ampreloxetine) and the value of and market for our common shares, will depend on future developments that are highly uncertain and cannot be predicted with confidence at this time. These potential future developments include, but are not limited to, the ultimate duration of the pandemic, travel restrictions, quarantines, social distancing and business closure requirements in the U.S. and in other countries, and the effectiveness of actions taken globally to contain and treat the disease. Other risks affecting Theravance Biopharma are in the company’s Form 10-Q filed with the SEC on August 10, 2020 and other periodic reports filed 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:
Gail B. Cohen
Corporate Communications and Investor Relations
917-214-6603
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THERAVANCE BIOPHARMA, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)
| September 30, | December 31, | |||||||
| 2020 | 2019 | |||||||
| (Unaudited) | (1) | |||||||
| Assets | ||||||||
| Current assets: | ||||||||
| Cash and cash equivalents and short-term marketable securities | $ | 358,347 | $ | 280,831 | ||||
| Receivables from collaborative arrangements | 12,399 | 11,996 | ||||||
| Receivables from licensing arrangements | - | 10,000 | ||||||
| Amounts due from TRC, LLC | 48,909 | 28,574 | ||||||
| Prepaid clinical and development services | 20,761 | 2,736 | ||||||
| Other prepaid and current assets | 10,308 | 4,351 | ||||||
| Total current assets | 450,724 | 338,488 | ||||||
| Property and equipment, net | 15,430 | 12,644 | ||||||
| Long-term marketable securities | - | 4,985 | ||||||
| Operating lease assets | 44,391 | 46,604 | ||||||
| Restricted cash | 833 | 833 | ||||||
| Other assets | 810 | 5,272 | ||||||
| Total assets | $ | 512,188 | $ | 408,826 | ||||
| Liabilities and Shareholders' Deficit | ||||||||
| Current liabilities | $ | 104,270 | $ | 111,703 | ||||
| Convertible senior notes due 2023, net | 226,695 | 225,890 | ||||||
| Non-recourse notes due 2035, net | 384,482 | - | ||||||
| Non-recourse notes due 2033, net | - | 219,300 | ||||||
| Long-term operating lease liabilities | 47,823 | 47,725 | ||||||
| Other long-term liabilities | 10,454 | 28,048 | ||||||
| Shareholders' deficit | (261,536 | ) | (223,840 | ) | ||||
| Total liabilities and shareholders’ deficit | $ | 512,188 | $ | 408,826 | ||||
(1) The condensed consolidated balance sheet as of December 31, 2019 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, 2019.
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THERAVANCE BIOPHARMA, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share data)
| Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||
| 2020 | 2019 | 2020 | 2019 | |||||||||||||
| (Unaudited) | (Unaudited) | |||||||||||||||
| Revenue: | ||||||||||||||||
| Collaboration revenue | $ | 7,261 | $ | 8,836 | $ | 19,381 | $ | 21,666 | ||||||||
| Licensing revenue | - | - | 1,500 | 18,500 | ||||||||||||
| Mylan collaboration agreement | 10,996 | 3,591 | 32,246 | 3,749 | ||||||||||||
| Total revenue | 18,257 | 12,427 | 53,127 | 43,915 | ||||||||||||
| Costs and expenses: | ||||||||||||||||
| Research and development (1) | 67,371 | 52,006 | 195,788 | 152,223 | ||||||||||||
| Selling, general and administrative (1) | 27,501 | 25,622 | 78,606 | 73,035 | ||||||||||||
| Total costs and expenses | 94,872 | 77,628 | 274,394 | 225,258 | ||||||||||||
| Loss from operations | (76,615 | ) | (65,201 | ) | (221,267 | ) | (181,343 | ) | ||||||||
| Income from investment in TRC, LLC | 13,403 | 7,197 | 48,299 | 21,792 | ||||||||||||
| Interest expense | (11,573 | ) | (8,068 | ) | (32,905 | ) | (23,827 | ) | ||||||||
| Loss on extinguishment of debt | - | - | (15,464 | ) | - | |||||||||||
| Interest and other income, net | 1,235 | 2,089 | 2,033 | 7,258 | ||||||||||||
| Loss before income taxes | (73,550 | ) | (63,983 | ) | (219,304 | ) | (176,120 | ) | ||||||||
| Provision for income tax (expense) benefit | (93 | ) | 5,552 | (279 | ) | 5,271 | ||||||||||
| Net loss | $ | (73,643 | ) | $ | (58,431 | ) | $ | (219,583 | ) | $ | (170,849 | ) | ||||
| Net loss per share: | ||||||||||||||||
| Basic and diluted net loss per share | $ | (1.16 | ) | $ | (1.05 | ) | $ | (3.55 | ) | $ | (3.08 | ) | ||||
| Shares used to compute basic and diluted net loss per share | 63,303 | 55,858 | 61,881 | 55,445 | ||||||||||||
(1) Amounts include share-based compensation expense as follows:
| Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||
| (In thousands) | 2020 | 2019 | 2020 | 2019 | ||||||||||||
| Research and development | $ | 7,761 | $ | 6,458 | $ | 23,724 | $ | 18,338 | ||||||||
| Selling, general and administrative | 7,803 | 6,561 | 23,701 | 18,200 | ||||||||||||
| Total share-based compensation expense | $ | 15,564 | $ | 13,019 | $ | 47,425 | $ | 36,538 | ||||||||
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Exhibit 99.2
Third Quarter 2020 Financial Results and Business Update November 5, 2020 THERAVANCE BIOPHARMA ® , THERAVANCE ® , the Cross/Star logo and MEDICINES THAT MAKE A DIFFERENCE ® are registered trademarks of the Theravance Biopharma group of companies (in the U.S. and certain other countries). All third party trademarks used herein are the property of their respective owners. © 2020 Theravance Biopharma. All rights reserved.
Forward - looking statements 2 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 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, the Company's expectations regarding its allocation of resources, 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 2020 operating loss, excluding share - based compensation and other financial results . 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 the impacts on the COVID - 19 global pandemic on our business, 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 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, current and potential future disagreements with Innoviva, Inc . and TRC LLC, the uncertainty of arbitration and litigation and the possibility that an arbitration award or litigation result could be adverse to the Company . Other risks affecting Theravance Biopharma are in the company's Form 10 - Q filed with the SEC on August 10 , 2020 , and other periodic reports filed with the SEC .
Q3 Financial results and business update agenda 3 Introduction Gail B. Cohen Vice President, Corporate Communications & Investor Relations Overview Rick E Winningham Chief Executive Officer Commercial and Development Update Frank Pasqualone Senior Vice President, Chief Commercial Operations Officer Brett Haumann, M.D. Senior Vice President, Chief Medical Officer Financial Update Andrew Hindman Senior Vice President, Chief Financial Officer Closing Remarks Rick E Winningham Chief Executive Officer
YUPELRI ® (revefenacin) inhalation solution First and only once - daily, nebulized maintenance medicine for COPD
YUPELRI ® (revefenacin) inhalation solution FDA - approved for the maintenance treatment of COPD 1. Global Strategy for Diagnosis, Management, and Prevention of COPD, 2018. 2. TBPH market research (N = 160 physicians); refers to US COPD patients. COPD, chronic obstructive pulmonary disease; LAMA, long acting muscarinic receptor antagonist 5 Once - daily LAMAs are first - line therapy for moderate - to - severe COPD 1 9% of COPD patients (~800,000) use nebulizers for ongoing maintenance therapy; 41% use nebulizers at least occasionally for bronchodilator therapy 2 Companies co - promote under US profit/loss share TBPH and MYL worldwide strategic collaboration to develop and commercialize nebulized YUPELRI ® ( revefenacin ) 65% 35% TBPH MYL
YUPELRI ® launch metrics Strong customer acceptance and market uptake Majority of YUPELRI ® volume flows through durable medical equipment channel (approximately 3 - month lag in data capture); remaining volume flows thro ugh hospitals, retail and long - term care pharmacies. Wholesale acquisition cost (WAC): $1,066 per month (or ~$35 per day). 1. Launch through October 2, 2020. 2. TBPH estimate derived from int egrating multiple data sources. 3. For patients with supplemental insurance; approximately 20% of patients may be responsible for co - pay and/or supplemental insurance. Source: www.CMS.gov. 6 191 wins (equates to 363 accounts) 78% of formulary accounts ordering 100% medical support requests fulfilled <30 days FORMULARY 1 Field force continues hybrid approach to customer interactions (live and virtual) ~50,000 patients 2 prescribed (through Q3 2020) PATIENT 100% Medicare Part B 3 74% of commercial payer lives covered (comprises ~8% of the YUPELRI ® business) ACCESS 65% 35% TBPH MYL ‣ Theravance Biopharma’s implied 35% share of Net Sales during Q3 - 2020 was $13M ‣ Increased market share and achieved quarter - over - quarter Net Sales growth of 22%
Program Indication Research Phase 1 Phase 2 Phase 3 Filed Marketed Collaborator Ampreloxetine (TD - 9855) NRI S ymptomatic nOH Wholly - owned Organ - Selective TD - 1473 GI JAKi UC CD TD - 5202 Irreversible JAK3i Inflammatory intestinal diseases YUPELRI ® (revefenacin) LAMA COPD TD - 8236 Inhaled JAKi Asthma Wholly - owned TD - 0903 Inhaled JAKi COVID - 19 Program Indication Research Phase 1 Phase 2 Phase 3 Filed Marketed Rights Economic Interests TRELEGY ELLIPTA 1 FF/UMEC/VI COPD GSK & Innoviva, Inc. Asthma Skin - selective JAKi Dermatological diseases Key programs supported by proven development and commercial expertise 1. TBPH holds 85% economic interest in upward - tiering royalty stream of 6.5% – 10% payable by GSK (net of TRC expenses paid and the amount of cash, if any, expected to be used by TRC pursuant to the TRC Agreement over the next four fiscal quarters). 75% of TRC income received is pledged to service outstanding notes, 25% of royalties rec eiv ed retained by TBPH. All statements concerning TRELEGY ELLIPTA based on publicly available information. CD, Crohn’s disease; FF/UMEC/VI, fluticasone/umeclidinium/vilanterol; JAKi, Janus kinase inhibitor; nOH, neuroge nic orthostatic hypotension; NRI, norepinephrine reuptake inhibitor; UC, ulcerative colitis. 7 Phase 2 Phase 2 Phase 2b/3 Phase 1 Phase 3 Marketed Marketed Research Phase 2 Marketed
TD - 8236 Potential first inhaled JAKi for asthma
TD - 8236: Phase 1 clinical trial design Parts A & B completed September 2019; Part C enrollment completed — data reporting 4Q 2020 PART C MoA Biomarkers (Moderate - to - severe asthmatics + ICS) FeNO, fractional exhaled nitric oxide; ICS, inhaled corticosteroids; MAD, multiple ascending dose; pSTAT , phosphorylated signal transducer and activator of transcription; SAD, single ascending dose. 9 4000µg N=16 active/8 Placebo All cohorts: N=6 active/2 Placebo 4500µg 500µg 1500µg 150µg 50µg 1 2 3 4 5 6 7 D 1500 µg 1 2 3 4 5 6 7 D 150µg 500µg 1500µg 1 2 3 4 5 6 7 D 1 2 3 4 5 6 7 D 1 2 3 4 5 6 7 D PART A PART B SAD ( Healthy volunteers) Safety and PK MAD ( Mild asthmatics) Safety, PK, and PD (FeNO) ‣ Goal: build confidence in compound, MoA and dose in early - development ‣ Endpoints: FeNO ; pSTAT1 and pSTAT6 in bronchoalveolar lavage fluid; cytokines; epithelial gene expression T2 - dominant, n=8 Non - T2 - dominant, n=8
TD - 8236: Positive Phase 1 trial in healthy subjects and patients with mild and moderate/severe asthma ‣ Biomarkers of JAK target engagement (pSTAT1 and pSTAT6) significantly reduced in lungs of T2 high and T2 low moderate/severe asthmatics on top of inhaled corticosteroids ‣ Ongoing analysis of effect of TD - 8236 on additional biomarkers including cytokines and gene expression 10 Phase 1 Profile Healthy Volunteer Single - Dose (Part A) Mild Asthma Multiple - Dose (Part B) Mod/Severe Asthma [+ ICS] Multiple - Dose (Part C) Generally well - tolerated x x x Minimal systemic exposure x x x PK and PD profile consistent with once daily dosing x x x Biologic activity in lungs of patients with asthma x ↓ FeNO x ↓ FeNO , pSTAT1, pSTAT6
-50 -40 -30 -20 -10 0 10 20 30 40 -0.4 -0.2 0.0 0.2 0.4 Favors Placebo Favors TD - 8236 Favors TD - 8236 Favors Placebo No impact of TD - 8236 on the Late Asthmatic Response (LAR) Significant reductions in inflammation marker ( FeNO ) and favorable safety and tolerability ‣ TD - 8236 was generally well - tolerated as a single daily dose administered for 14 consecutive days 11 Primary Endpoint: Weighted Mean Area Under the Curve, 3 – 8 h. LS, least - squares; CI, confidence interval. % Change in FeNO Late Asthmatic Response Difference from Placebo, Liters (LS Means ± 95% CI) Difference from Placebo, % (LS Means ± 95% CI) 1500 µg 150 µg Day 14 Day 14 Day 7 - 0.01 n=22 - 0.04 n=20 4.28 n=22 - 20.16 n=24 - 3.72 n=22 - 26.87 n=23
-50 -40 -30 -20 -10 0 10 20 30 40 TD - 8236 FeNO Reductions Consistent Across Phase 1 and 2 ‣ FeNO reductions observed in moderate - to - severe asthmatics taking inhaled corticosteroids LAC, lung allergen challenge. 12 Phase 1 (Part B) Mild Asthmatics Phase 2 (LAC) Mild Asthmatics Phase 1 (Part C) Moderate – Severe Asthmatics + ICS Difference from Placebo (%) (LS Means ± 95% CI) 1500 µg 150 µg Day 7 Day 7 Day 14 Day 7 - 7.65 n=6 - 24.90 n=6 4.28 n=22 - 20.16 n=24 - 3.72 n=22 - 26.87 n=23 - 22.80 n=8 Favors Placebo Favors TD - 8236
TD - 0903 Program Nebulized lung - selective pan - JAK inhibitor to treat: ‣ Acute hyperinflammation of the lung in COVID - 19 ‣ Chronic inflammation for the prevention of lung transplant rejection
Potential for TD - 0903 effect Host inflammatory response to COVID - 19 drives ALI and ARDS ALI Acute Lung Injury; ARDS, Acute respiratory distress syndrome Adapted from Siddiqi HK, et al. J Heart Lung Transplant 2020 Mar 20. CRP, C - reactive protein; LDH, lactate dehydrogenase; NT - proBNP, ventricular natriuretic peptide; SIRS, severe inflammatory respo nse syndrome. 14 Clinical symptoms Clinical signs Mild constitutional symptoms Fever >99.6 ° F Dry cough, diarrhea, headache Shortness of breath Hypoxia (PaO 2 /FiO 2 ≤300 mmHg) Lymphopenia, increased prothrombin time, increased D - Dimer and LDH (mild) Abnormal chest imaging Transaminitis Low normal procalcitonin ARDS SIRS/shock Cardiac failure Elevated inflammatory markers (CRP, LDH, IL - 6, D - dimer, ferritin) Troponin, NT - proBNP elevation Time Course IIA IIB Severity of Illness Stage I (Early Infection) Stage II (Pulmonary Phase) Stage III (Hyperinflammation Phase) Viral response phase Host inflammatory response phase
Phase 1: Healthy volunteers 1 mg 3 mg 10 mg Phase 2: Hospitalized COVID - 19 patients 1 mg 3 mg 10 mg Single - ascending dose Multiple - ascending dose x 7 days Dose X + SOC Placebo + SOC x x Part 2: Parallel group x 7 days 1 mg 3 mg 10 mg Repeat - dose safety, tolerability & PK Single - dose safety, tolerability & PK Repeat - dose safety, tolerability, PK & early dose - dependent efficacy Proof of concept efficacy and safety Part 1: Multiple - ascending dose x 7 days TD - 0903: Development plan designed to progress rapidly SOC, standard of care. 15 x
TD - 0903 Phase 1 Supports Initiation of Phase 2 in COVID - 19 Nebulized lung - selective pan - JAK inhibitor to treat acute hyperinflammation of the lung in COVID - 19 ‣ TD - 0903 was well tolerated as single daily doses across a dose range from 1 mg to 10 mg for 7 days in healthy subjects ‣ Adverse events were assessed to be mild or moderate in severity, and none led to discontinuation of study treatment ‣ No clinically relevant changes in laboratory parameters, vital signs, or ECGs IC 50 , half - maximal inhibitory concentration; SD, standard deviation. 16 Favorable safety and tolerability profile and PK below levels anticipated to exert systemic effects Safety and Tolerability Systemic Pharmacokinetics 0 50 100 150 200 250 300 350 400 0 4 8 12 16 20 24 3 mg 1 mg 10 mg JAK IC 50 (binding - corrected) Mean TD - 0903 Plasma Concentration, ng/mL (SD) Time, h
Economic interest GSK’s TRELEGY ELLIPTA (FF/UMEC/VI): First and only once - daily single inhaler triple therapy
Economic interest in GSK’s TRELEGY Upward - tiering royalties of ~5.5 – 8.5% of worldwide net sales 1 Q3 net sales of £194MM (or $252MM) Market share with sales up 45% year - over - year US asthma indication approved September 9, 2020, and launched this quarter ‣ Results from the CAPTAIN study published in The Lancet Respiratory Medicine 1. TBPH holds 85% economic interest in upward - tiering royalty stream of 6.5% – 10% payable by GSK (net of TRC expenses paid and the amount of cash, if any, expected to be used by TRC pursuant to the TRC Agreement over the next four fiscal quarters). 75% of TRC income received is pledged to service outstanding notes, 25% of royalties retained by TBPH. Our non - recourse Triple II 9.5% Fixed Rate Term Notes due on or before 2035. All statements concerning TRELEGY based on publicly available information. TRELEGY is FF/UMEC/VI or fluticasone fur oate/umeclidinium/vilanterol; comprised of ICS, LAMA, and LABA, active components of Anoro (UMEC/VI). 18 TRELEGY
Third quarter 2020 financial highlights Well - capitalized with $358.3 million 1 as of September 30, 2020 1. Cash, cash equivalents and marketable securities. 2. Amounts include share - based compensation. 19
The Theravance Biopharma Difference
Q1 Q2 Q3 Q4 Multiple potential milestones and value - driving catalysts expected in 2021 1. TBPH holds 85% economic interest in upward - tiering royalty stream of 6.5% – 10% payable by GSK (net of TRC expenses paid and the amount of cash, if any, expected to be used by TRC pursuant to the TRC Agreement over the next four fiscal quarters). 75% of TRC income received is pledged to service outstanding notes, 25% of roy alt ies received retained by TBPH. All statements concerning TRELEGY ELLIPTA based on publicly available information. 21 Commercial progression of YUPELRI ® and GSK’s TRELEGY ELLIPTA 2021 Phase 2 TD - 0903 COVID - 19 Topline results SEQUOIA: Phase 3 4 - week study for efficacy Ampreloxetine nOH Topline results Phase 2b 8 - week induction study Phase 2 induction study: placebo - controlled RHEA: Ulcerative colitis DIONE: Crohn’s disease TD - 1473 Topline results Topline results
Creating transformational value for stakeholders 22 Innovative research yielding organ - selective molecular designed assets Proven development and commercial expertise Strategic partnerships Value driving catalysts Strong capital position
Holding steadfast to our mission 23 …treatments for serious diseases to maximize patient benefit while minimizing patient risk Discovering… Developing… Commercializing…
About YUPELRI ® (revefenacin) inhalation solution YUPELRI ® (revefenacin) inhalation solution is a once - daily nebulized LAMA approved for the maintenance treatment of COPD in the US . Market research by Theravance Biopharma indicates approximately 9 % of the treated COPD patients in the US use nebulizers for ongoing maintenance therapy . 1 LAMAs are a cornerstone of maintenance therapy for COPD and YUPELRI ® is positioned as the first once - daily single - agent bronchodilator product for COPD patients who require, or prefer, nebulized therapy . YUPELRI ® ’s stability in both metered dose inhaler and dry powder device formulations suggest that this LAMA could also serve as a foundation for novel handheld combination products . 1. TBPH market research (N=160 physicians); refers to US COPD patients. 24
YUPELRI ® (revefenacin) inhalation solution YUPELRI ® inhalation solution is indicated for the maintenance treatment of patients with chronic obstructive pulmonary disease (COPD) . Important Safety Information (US) YUPELRI is contraindicated in patients with hypersensitivity to revefenacin or any component of this product . YUPELRI should not be initiated in patients during acutely deteriorating or potentially life - threatening episodes of COPD, or for the relief of acute symptoms, i . e . , as rescue therapy for the treatment of acute episodes of bronchospasm . Acute symptoms should be treated with an inhaled short - acting beta 2 - agonist . As with other inhaled medicines, YUPELRI can produce paradoxical bronchospasm that may be life - threatening . If paradoxical bronchospasm occurs following dosing with YUPELRI, it should be treated immediately with an inhaled, short - acting bronchodilator . YUPELRI should be discontinued immediately and alternative therapy should be instituted . YUPELRI should be used with caution in patients with narrow - angle glaucoma . Patients should be instructed to immediately consult their healthcare provider if they develop any signs and symptoms of acute narrow - angle glaucoma, including eye pain or discomfort, blurred vision, visual halos or colored images in association with red eyes from conjunctival congestion and corneal edema . Worsening of urinary retention may occur . Use with caution in patients with prostatic hyperplasia or bladder - neck obstruction and instruct patients to contact a healthcare provider immediately if symptoms occur . Immediate hypersensitivity reactions may occur after administration of YUPELRI . If a reaction occurs, YUPELRI should be stopped at once and alternative treatments considered . The most common adverse reactions occurring in clinical trials at an incidence greater than or equal to 2 % in the YUPELRI group, and higher than placebo, included cough, nasopharyngitis, upper respiratory infection, headache and back pain . Coadministration of anticholinergic medicines or OATP 1 B 1 and OATP 1 B 3 inhibitors with YUPELRI is not recommended . YUPELRI is not recommended in patients with any degree of hepatic impairment . OATP, organic anion transporting polypeptide. 25
Exhibit 99.3
APPENDIX SLIDES — Third Quarter 2020 Financial Results and Business Update November 5, 2020 THERAVANCE BIOPHARMA ® , THERAVANCE ® , the Cross/Star logo and MEDICINES THAT MAKE A DIFFERENCE ® are registered trademarks of the Theravance Biopharma group of companies (in the U.S. and certain other countries). All third party trademarks used herein are the property of their respective owners. © 2020 Theravance Biopharma. All rights reserved.
Our science Organ - selective molecules designed to optimize therapeutic index
Theravance Biopharma difference: Targeting the right disease with the right molecular design TI, therapeutic index. 3 α STAT P STAT P STAT JAK β γ JAK N UCLEUS P STAT P STAT TI TI
Research and development portfolio of designed molecules: brain, lung, GI and eye 4 Molecular Design Biology Medicinal Chemistry DMPK Development and Commercial Symptomatic nOH (Neurogenic orthostatic hypotension) Asthma Lung Transplant Rejection IPF (idiopathic pulmonary fibrosis) COPD (chronic obstructive pulmonary disorder) — APPROVED COVID - 19 CD (Crohn’s disease) UC (ulcerative colitis) Celiac Disease DME (diabetic macular edema) DMPK, drug metabolism and pharmacokinetics; GI, gastrointestinal.
Program Indication Research Phase 1 Phase 2 Phase 3 Filed Marketed Collaborator Ampreloxetine (TD - 9855) NRI S ymptomatic nOH Wholly - owned Organ - Selective TD - 1473 GI JAKi UC CD TD - 5202 Irreversible JAK3i Inflammatory intestinal diseases YUPELRI ® (revefenacin) LAMA COPD TD - 0903 Inhaled JAKi COVID - 19 Wholly - owned TD - 8236 Inhaled JAKi Asthma Inhaled ALK5i Idiopathic pulmonary fibrosis Program Indication Research Phase 1 Phase 2 Phase 3 Filed Marketed Rights Economic Interests TRELEGY ELLIPTA 1 FF/UMEC/VI COPD GSK & Innoviva , Inc. Asthma Skin - selective JAKi Dermatological diseases Key programs supported by proven development and commercial expertise 1. TBPH holds 85% economic interest in upward - tiering royalty stream of 6.5% – 10% payable by GSK (net of TRC expenses paid and the amount of cash, if any, expected to be used by TRC pursuant to the TRC Agreement over the next four fiscal quarters). 75% of TRC income received is pledged to service outstanding notes, 25% of roy alt ies received retained by TBPH. All statements concerning TRELEGY ELLIPTA based on publicly available information. FF/UMEC/VI, fluticasone/umeclidinium/vilanterol; JAKi, Janus kinase inhibitor; LAMA, long act ing muscarinic receptor antagonist; NRI, norepinephrine reuptake inhibitor. 5 Phase 2 Phase 2 Phase 2b/3 Phase 1 Phase 3 Marketed Marketed Research Phase 2 Marketed Phase 1
TD - 0903 Program Nebulized lung - selective pan - JAK inhibitor to treat: ► Acute hyperinflammation of the lung in COVID - 19 ► Chronic inflammation for the prevention of lung transplant rejection
Leveraging respiratory expertise for potential acute treatment in response to a global pandemic 1. https://coronavirus.jhu.edu/map.html, number as of 9/10. 2. IHME. 7 US patients 1 >6M patients become hospitalized 2 ~2.4% No vaccine available Current treatment: Supportive therapy As of July 1, 2020: 439 drugs in 2327 trials worldwide S TRATEGIC O PPORTUNITY TD - 0903 Inhaled lung - specific therapeutic: potential to be used in combination with other treatment modalities (e.g., antivirals) to provide additional therapeutic benefit without risk of systemic immunosuppressive issues that may occur with systemic anti - inflammatories P ATIENT P OPULATION C URRENT T REATMENT L ANDSCAPE patients worldwide 1 >27.8M
S TRATEGIC O PPORTUNITY First - in - disease opportunity for the prevention of lung transplant rejection ‣ Calcineurin inhibitors (tacrolimus) ‣ Anti - proliferative agents (MMF) 1. http://www.transplant - observatory.org/data - charts - and - tables/ . 2. United Network for Organ Sharing (UNOS), https://unos.org/data/transplant - trends. 3. Chambers DC et al, JHLT 2018; 37(10): 1169 - 1183. 4. JHEOR. 2015. CA Jones https://pdfs.semanticscholar.org/108c/5cb16aaab19fa 9e9a1ccba64ae5869336f26.pdf CAGR, compound annual growth rate; CF, cystic fibrosis; CLAD, chronic lung allograft dysfunction; mAb, monoclonal antibody; M MF, mycophenolate mofetil. 8 lung transplants per year in US 2 2,714 TD - 0903 Potential first approved therapy specifically to prevent acute lung transplant rejection and development of CLAD Use following lung transplantation could improve patient morbidity and mortality risk, and reduce need for re - transplantation Lung transplants have the poorest prognosis of all solid organ transplants COPD, IPF, and CF top 3 diagnoses driving need for lung transplantation CAGR since 1988 15% mortality at 6 years post transplant 3 ~50% No FDA - approved therapies to prevent lung transplant rejection or CLAD Current standard of care: triple immunosuppression therapy medical/productivity costs (2015 – 2025) 4 $3.5B P ATIENT P OPULATION C URRENT T REATMENT L ANDSCAPE lung transplants worldwide, 2019 1 6,240 ‣ Corticosteroids ‣ IL - 2 mAb induction therapy ( basiliximab )
Month 6 0 5 10 15 20 F i r s t B P A R R a t e ( % ) Pan - JAK inhibitors can prevent transplant rejections Noninferiority trial of tofacitinib vs cyclosporine (CsA) in kidney transplant recipients 1 ‣ JAK inhibition was superior to cyclosporine in prevention of acute and chronic rejections ‣ Serious infections increased with systemic JAK inhibitors including CMV 1. Vincenti F, et al. Am J Transplant 2015;15:1644 - 53. *p<0.001 vs CsA . BPAR, biopsy - proven acute rejection; CMV, cytomegalovirus; SE, standard error; TWC2, time - weighted 2 - h post - dose concentrations . 9 Chronic Rejection Tofacitinib is superior to CsA in efficacy measures Acute Rejection Increased infection risk with tofacitinib over CsA CsA Tofacitinib 50 40 30 20 10 0 Month 12 * IF/TA % 24 5 53 25 0 20 40 60 Tofacitinib CsA CMV disease Serious infection 12 - month Kaplan - Meier estimates, % (SE)
Ampreloxetine (TD - 9855) Once - daily norepinephrine reuptake inhibitor to treat symptomatic neurogenic orthostatic hypotension
Reduced quality of life, significant care - giver burden and limited therapeutic options for symptomatic nOH patients 11 1. Mathias C, et al. J Neurol 1999;246:893 - 8. 2. Ha AD, et al. Parkinsonism Relat Disord 2011;17:625 - 8. 3. Not all patients are treated with prescription medication. P ATIENT P OPULATION US patients ~350K Current treatments (midodrine, fludrocortisone, droxidopa) have significant limitations Subset of patients do not respond None demonstrate durable effect Safety profiles that limit use Require multiple daily dosing nOH is a symptom of MSA, PAF and PD 70 – 80% of MSA patients 1 , and 30 – 50% of PD patients 2 have nOH 3 S TRATEGIC O PPORTUNITY Ampreloxetine Designed to reduce symptoms of nOH by prolonging the effect of endogenous norepinephrine with the potential to provide a meaningful and durable symptom improvement to underserved patients C URRENT T REATMENT L ANDSCAPE ~700K APAC patients ~700K EU patients
Untreated nOH NE Release at Neurovascular Junction Systolic Blood Pressure Designed to reduce symptoms of nOH by prolonging the effect of endogenous norepinephrine 1. Palma JA, Kaufmann H. Mov Disord Clin Pract 2017;4:298 - 308. NE, norepinephrine; NET, norepinephrine transporters. 12 Vasodilation Blood pressure Vasoconstriction Blood pressure Syncope Normal x Increased standing blood pressure x Increased brain perfusion x Reduce symptoms of symptomatic nOH 1 NE A XON TERMINAL D ENDRITE + Ampreloxetine Ampreloxetine Reduction in syncope Normal
Ampreloxetine: Potential to provide meaningful and durable symptom improvement to underserved patients Baseline OHSA #1 (Orthostatic Hypotension Symptom Assessment Question 1) >4 points. Negative change indicates improvement in symptoms; improvement of 1 point is defined as the MCID (minimal clinically importan t d ifference). ITT, intention - to - treat; SD, standard deviation. Mean (SD) change from baseline in OHSA #1 score n=17 n=13 n=7 n=6 Week Study 169: 4 weeks (N=188) Randomized, double - blind, placebo - controlled, parallel group Study 170: 22 weeks (N=254) Randomized 6 - week withdrawal phase Phase 3 registrational program ongoing; 4 - week efficacy data expected Q3 2021 13 Phase 3 Registrational Program Ampreloxetine Phase 2 data in nOH; 20 weeks of treatment Extension study: 3 years Completers: Considered clinically meaningful Withdrawal Durability Efficacy -7 -6 -5 -4 -3 -2 -1 0 1 2 3 0 4 8 12 16 20 24
Decentralized trials move activities from the clinic to home ‣ Site - centric operating model ‣ Burden on site resources ‣ Patient burden Source: Theravance Biopharma Clinical Operations. 14 Global clinical trials are being decentralized along a continuum Traditional Trial Operations Decentralized Trial ‣ Patient - centric model ‣ Leverage technology for remote visits, monitoring and data collection ‣ Established home health and distribution channels
TD - 1473 (JNJ - 8398) Oral gut - selective pan - JAK inhibitor to treat inflammatory bowel diseases
Need for new medicines to treat Inflammatory Bowel Disease 16 HRQoL, health - related quality of life; IBD, inflammatory bowel disease. 1. GBD 2017 Inflammatory Bowel Disease Collaborators. Lancet 2020;5:17 - 30. 2. https://www.crohnscolitisfoundation.org/sites/default/files/2019 - 02/Updated%20IBD%20Factbook.pdf . P ATIENT P OPULATION US disease burden 2 $31B Standard of care: Biologics have become the mainstay of treatment in moderate - to - severe patients global cases, 2017 1 6.8M global IBD treatment market, 2018 $16B Current US patients Steroids, immunosuppressants, and TNF inhibitors associated with side effects that further decrease HRQoL S TRATEGIC O PPORTUNITY TD - 1473 Gut - selective agent: if used earlier in the course of disease, has potential to be a new cost - effective therapy option that reduces associated disease management costs and improves patient HRQoL current US patients 2 1.6M C URRENT T REATMENT L ANDSCAPE 780K CD cases 907K UC cases
STAT - induced Inflammation α N UCLEUS STAT P STAT P STAT P STAT P STAT JAK β γ JAK JAK inhibitor JAK - STAT pathway: orchestrating signaling of multiple pro - inflammatory cytokines Clark JD, et al. J Med Chem 2014; 57:5023 - 5038. EPO, erythropoietin; GM - CSF, granulocyte - macrophage colony - stimulating factor; Tyk, tyrosine kinase. 17 γ c cytokines (IL - 2, IL - 4, IL - 7, IL - 9, IL - 15, IL - 21) Type 1 IFNs, IL - 10 family IL - 6, IL - 11, IL - 13, IL - 27, IL - 31, IL - 35 IFN γ IL - 12, IL - 23 EPO, TPO GM - CSF, IL - 3, IL - 5 α JAK1 β γ JAK3 α JAK1 β γ Tyk2 α JAK1 β γ JAK2 Tyk2 α JAK1 β γ JAK2 α JAK2 β γ Tyk2 α JAK2 β γ JAK2
TD - 1473 is an oral, gut - selective pan - JAK inhibitor Preclinical data package for TD - 1473 represents a potential breakthrough approach to the treatment of IBD Journal of Crohn’s & Colitis April 20, 2020. 18 Gut selectivity Potent inhibition of Tyk2 Anti - inflammatory activity in disease model x x Lumen Vehicle treated control TD - 1473 treatment x 7.5 8 8.5 9 9.5 10 Tofacitinib Izencitinib Inhibitory potency (pKi) Tyk2
Systemic exposures low; tissue concentrations at or above JAK inhibition levels *Tofacitinib concentrations extracted from J Pharmacol Exp Ther 348:165 – 173, January 2014. BID, twice daily; IC 50 , concentration to produce 50% maximal inhibition; PK, pharmacokinetics. 19 Tofacitinib 10 mg BID* TD - 1473 20 mg TD - 1473 80 mg TD - 1473 270 mg Colonic Tissue Concentrations of TD - 1473 TD - 1473 Dose 1 10 100 1000 10,000 20 mg 80 mg 270 mg Range of JAK IC 50 values TD - 1473 Total Concentration (nM) Plasma Concentrations in UC Patients Time (h) 100 200 300 0 0 1 2 3 4 Plasma Concentration (nM)
TD - 1473: Gut - selective pan - JAK inhibitor Late - stage studies in Crohn’s disease and ulcerative colitis Phase 2 Crohn’s and Phase 2b/3 ulcerative colitis studies ongoing Phase 2 Crohn’s and Phase 2b ulcerative colitis data expected Q3 2021 Global collaboration with Janssen leverages joint development expertise and provides significant economics to TBPH 2 1. Maintenance phase of the study will have induction responder patients re - randomized to active doses compared to placebo at 44 weeks. 2. Deal value up to $1B in payments to TBPH, including $100M upfront; profit - share in US (33% TBPH, 67% Janssen); double - digit r oyalties to TBPH ex - US. Crohn’s disease Ulcerative colitis Phase 2: 12 weeks (N=160) Dose - finding induction Active treatment extension: 48 weeks Phase 2b/3: 8 weeks (N=240) Dose - finding induction Maintenance phase 1 : 44 weeks Phase 3: 8 weeks (N=640) Dose - confirming induction Responders 20
TD - 5202 Organ - gut selective irreversible JAK3 inhibitor to treat inflammatory intestinal diseases
Celiac disease has no current treatments and serious health consequences 22 1. 1% prevalence, BeyondCeliac.org. 2. 2018 US population 327M Census.gov. 3. Theravance Market Research. S TRATEGIC O PPORTUNITY P ATIENT P OPULATION US patients 1,2 3.3M No approved treatment Only available intervention is strict life - long gluten - free diet 30% of diagnosed patients are poorly controlled despite best dietary efforts 3 TD - 5202 Organ - gut selective irreversible JAK3 inhibitor: potential to deliver significant value for both patients and payers increase in US over past 50 y 4 – 4.5x Global prevalence 1% higher healthcare costs than controls >2x C URRENT T REATMENT L ANDSCAPE Celiac Normal
JAK3 - dependent cytokines play central role in pathogenesis of celiac disease ‣ Proof - of - relevance from recent positive Phase 2 data with systemic JAK3 inhibitor in alopecia areata, another T - cell mediated disease ‣ Localized JAK3 inhibition important to avoid systemic immunosuppression (genetic JAK3 deficiency leads to severe immunodeficiency) Figure adapted from Jabri B and Sollid L. J Immunol 2017;198:3005 - 14. IE - CTL, intraepithelial cytotoxic lymphocyte; IEL, intraepithelial lymphocyte. 23 IL - 2, IL - 4, IL - 7, IL - 9, IL - 15, IL - 21 I MMUNE C ELL CD Pathogenesis α N UCLEUS STAT P STAT P STAT P STAT P STAT JAK1 β γ JAK3 P P P Gluten peptides G LUTEN - S PECIFIC T H 1 CELLS I NTESTINAL E PITHELIUM L AMINA P ROPIA I NTESTINAL L UMEN IFNγ IL - 2 IL - 21 IEL IE - CTL IL - 15
TD - 5202 First - in - Human Overall Results Summary ‣ No serious or severe AEs were reported ‣ All treatment - emergent AEs in TD - 5202 - treated subjects were mild in severity AE, adverse event; C max,ss , maximal steady - state concentration; NK, natural killer. 24 TD - 5202: generally well - tolerated (single dose ≤2000 mg, multiple doses ≤1000 mg BID) for 10 consecutive days in healthy subjects ‣ Systemic exposures were dose proportional from 100 to 1000 mg BID ‣ Low steady - state systemic exposures: mean C max,ss ~11 - fold below the protein - adjusted JAK IC 50 at the highest tested dose (1000 mg BID), consistent with a gut - selective approach ‣ No clinically significant changes from baseline in vital signs and ECG assessments ‣ No clinically significant changes in chemistry or hematology parameters – No changes in NK cell count
Inhaled ALK5i Potential best - in - disease therapy for the treatment of idiopathic pulmonary fibrosis (IPF)
Limited treatment options 2 currently approved therapies, with modest efficacy and poor tolerability S TRATEGIC O PPORTUNITY P ATIENT P OPULATION Inhaled ALK5i Potential first - in - class inhaled ALK5 inhibitor anti - fibrotic agent for IPF Despite treatment with the current SOC, IPF patients continue to experience disease progression and exacerbation C URRENT T REATMENT L ANDSCAPE Idiopathic pulmonary fibrosis (IPF) remains a fatal chronic lung disease with limited treatment options 1. Raghu G, et al. Lancet Resp. 2014: 2(7):566 - 572. 2. Raghu G, et al. Eur Respir J . 2016: 48(1):179 - 186. 3. National Heart Lung and Blood Institute (NIH), Public Domain, https://commons.wikimedia.org/w/index.php?curid=29590103. US prevalence; currently orphan diease 1,2 140,000 Lungs with IPF 3 26 Profound dyspnea, unrelenting cough, impairment of activities of daily living Mortality with IPF remains high
Significant opportunity remains for effective IPF treatments ‣ Mortality with IPF remains high – <50% alive 3 years after diagnosis 1 1. King TE, et al. Am J Respir Crit Care Med 2001;164:1171 - 81. 27 1.0 0.8 0.6 0.4 0.2 0.0 0 5 10 15 Years Probability of Survival Male Female To arrest disease progression with improved tolerability Goal
TGFβ, transforming growth factor β. 28 S CARRING TISSUES Collagen deposition Stimuli Genetic susceptibility Repetitive injury AEC damage TGF β A LVEOLAR E PITHELIAL C ELLS (AEC) T YPE 2 T YPE 1 Normal M YOFIBROBLASTS Fibrogenesis, proliferation Targeting the TGFβ pathway A core signaling pathway that drives fibrosis
a SMA , a - smooth muscle actin; ERK, extracellular signal - regulated kinase; JNK, c - Jun N - terminal kinase; PI3K, phosphatidylinositol - 4,5 - b isphosphate 3 - kinase; Smad2/3, mothers against decapentaplegic homolog 2/3; TGFR (ALK5), TGFβ receptor. Adapted from: Neuzillet C, et al. Oncotarget 2013;5:78 – 94. 29 F IBROBLASTS M YOFIBROBLASTS Fibroblast to Myofibroblast Transition (FMT) Increased extracellular matrix Increased a SMA Increased migration ERK Smad2/3 PI3K p38 JNK Rho IPF progression P P ALK5i Activation: Multiple an integrins Proteases Thrombospondin Free Radicals TGFR2 Latent TGFβ TGFR1 (ALK5) Selectively targeting the TGFβ pathway through ALK5 inhibition Inhibiting a core signaling pathway that drives fibrosis regardless of activation mechanism
ALK5 inhibition directly interrupts FMT 1 in IPF FTM, fibroblast to myofibroblast transition 30 Reference Standard ALK5i Log [M] % inhibition of α SMA - 9 - 8 - 7 - 6 - 5 0 50 100 150 FMT a SMA expressed a SMA reduced Negative control ALK5i treated
Current treatment options have no effect on FMT at clinically relevant concentrations FTM, fibroblast to myofibroblast transition; C max , maximal concentration; IC 50 , half maximal inhibitory concentration. 1. https://www.tga.gov.au/sites/default/files/auspar - nintedanib - esilate - 160208.pdf . 2. Ogura T, et al. Eur Respir J. 2015;45:1382 - 92. 31 -10 -9 -8 -7 -6 -5 -4 -3 -2 -1 0 Pirfenidone Nintedanib Log [M] Nintedanib IC 50 Pirfenidone IC 50 Clinical C max Unbound 1,2
Wound repair Bone healing Cardiovascular homeostasis Tumor suppression Endocrine function Lung selectivity avoids unwanted systemic side effects Minimizing systemic inhibition of a cytokine essential for homeostasis Modified from: Akhurst RJ, Hata A. Nat Rev Drug Discov 2012;11:790 - 811. 32 Maintaining key systemic regulatory roles of TGFβ Inhaled ALK5i
Ocular JAKi Potential best - in - disease, pan - JAK inhibitor with long - acting ocular anti - inflammatory activity
Diabetic macular edema causes blindness in diabetics 34 1. © 2016 DR/Decision Resources, LLC. All rights reserved. Reproduction, distribution, transmission or publication is prohibit ed. Reprinted with permission. 2. Romero - Aroca , World J Diabetes 2011;2(6): 98 - 104. 3. Lee et al Curr Med Res Opin 2008;24:1549 - 59. Images from Angiogenesis Foundation, www.scienceofdme.org. Vision with DME Normal vision US prevalence 1 2.7 million #1 anti - VEGF treatments Most patients have suboptimal response S TRATEGIC O PPORTUNITY P ATIENT P OPULATION Ocular JAKi C URRENT T REATMENT L ANDSCAPE Potential to offer an alternative treatment for DME patients who are not optimally responding to treatment with VEGFi 140% higher direct and indirect healthcare costs in patients with DME vs diabetics without ocular disease 3 cause of blindness in diabetes 2 1st Intraocular steroids Side effects limit utility 2nd Nonpharmacological treatments (e.g. laser coagulation) limited efficacy and significant adverse events
Inflammation, not just VEGF, is a key driver of DME Intraocular anti - VEGF agents 35 1. Gonzalez VH, et al. Am J Ophthalmol 2016;172:72 - 79. Current Pharmacological Treatments Intraocular steroids Hyperglycemia Disruption of blood - retinal barrier Vascular leakage DME VEGF Retinal capillary damage Inflammatory cytokines Need for broad, sustained release, anti - inflammatory with a safer side - effect profile ‣ High frequency of formation of cataracts and glaucoma ‣ One third do not respond to anti - VEGF while another third have a suboptimal response 1 ‣ Require frequent intravitreal injections
0.00 0.25 0.50 0.75 1.00 1.25 VEGF IL-6 IP-10 MCP-1 Unmet need for an anti - inflammatory drug: opportunity for eye - selective JAK inhibition Adapted from Sohn HJ, et. al. Am J Ophthalmol 2011; 152:686 - 694. 36 Effect of anti - VEGF Effect of Steroids 0.00 0.25 0.50 0.75 1.00 1.25 VEGF IL-6 IP-10 MCP-1 Untreated Treated Normalized Protein Level
Ocular pan - JAK inhibition has the potential to address key disease pathways in DME 37 TD - EyeJAKi inhibits key DME inflammatory pathways: JAK2 JAK1 IL - 6 Tyk2 JAK1 Interferons MCP - 1 IP - 10 TD - EyeJAKi ‣ IL - 6 and interferon signaling pathways in human primary cells ‣ IL - 6 induced pSTAT3 and interferon - induced IP - 10 in the back of the eye in vivo
0 1 2 3 0.000001 0.00001 0.0001 0.001 0.01 0.1 1 10 100 1000 Time (months) C o m p o u n d c o n c e n t r a t i o n ( g / m L o r g / g ) A potent pan - JAK inhibitor designed for eye selectivity with projected dosing interval of at least three months 38 Single intravitreal injection of TD - EyeJAKi in Rabbits Vitreous humor (depot) Retina Plasma α STAT P STAT P STAT JAK β γ JAK N UCLEUS P STAT P STAT JAKi
About YUPELRI ® (revefenacin) inhalation solution YUPELRI ® (revefenacin) inhalation solution is a once - daily nebulized LAMA approved for the maintenance treatment of COPD in the US . Market research by Theravance Biopharma indicates approximately 9 % of the treated COPD patients in the US use nebulizers for ongoing maintenance therapy . 1 LAMAs are a cornerstone of maintenance therapy for COPD and YUPELRI ® is positioned as the first once - daily single - agent bronchodilator product for COPD patients who require, or prefer, nebulized therapy . YUPELRI ® ’s stability in both metered dose inhaler and dry powder device formulations suggest that this LAMA could also serve as a foundation for novel handheld combination products . 1. TBPH market research (N=160 physicians); refers to US COPD patients. 39
YUPELRI ® (revefenacin) inhalation solution YUPELRI ® inhalation solution is indicated for the maintenance treatment of patients with chronic obstructive pulmonary disease (COPD) . Important Safety Information (US) YUPELRI is contraindicated in patients with hypersensitivity to revefenacin or any component of this product . YUPELRI should not be initiated in patients during acutely deteriorating or potentially life - threatening episodes of COPD, or for the relief of acute symptoms, i . e . , as rescue therapy for the treatment of acute episodes of bronchospasm . Acute symptoms should be treated with an inhaled short - acting beta 2 - agonist . As with other inhaled medicines, YUPELRI can produce paradoxical bronchospasm that may be life - threatening . If paradoxical bronchospasm occurs following dosing with YUPELRI, it should be treated immediately with an inhaled, short - acting bronchodilator . YUPELRI should be discontinued immediately and alternative therapy should be instituted . YUPELRI should be used with caution in patients with narrow - angle glaucoma . Patients should be instructed to immediately consult their healthcare provider if they develop any signs and symptoms of acute narrow - angle glaucoma, including eye pain or discomfort, blurred vision, visual halos or colored images in association with red eyes from conjunctival congestion and corneal edema . Worsening of urinary retention may occur . Use with caution in patients with prostatic hyperplasia or bladder - neck obstruction and instruct patients to contact a healthcare provider immediately if symptoms occur . Immediate hypersensitivity reactions may occur after administration of YUPELRI . If a reaction occurs, YUPELRI should be stopped at once and alternative treatments considered . The most common adverse reactions occurring in clinical trials at an incidence greater than or equal to 2 % in the YUPELRI group, and higher than placebo, included cough, nasopharyngitis, upper respiratory infection, headache and back pain . Coadministration of anticholinergic medicines or OATP 1 B 1 and OATP 1 B 3 inhibitors with YUPELRI is not recommended . YUPELRI is not recommended in patients with any degree of hepatic impairment . OATP, organic anion transporting polypeptide. 40