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FORM
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Item 2.02. Results of Operations and Financial Condition.
On February 23, 2022, Theravance Biopharma, Inc. issued a press release and is holding a conference call regarding its financial results for the quarter and full year ended December 31, 2021 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 February 23, 2022 |
| 99.2 | Slide deck entitled Fourth Quarter and Full Year 2021 Financial Results and Business Update |
| 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: February 23, 2022 | By: | /s/ Andrew Hindman |
| Andrew Hindman | ||
| Senior Vice President and Chief Financial Officer | ||
Exhibit 99.1
Theravance Biopharma, Inc. Reports Fourth Quarter and Full Year 2021 Financial Results and Provides Business Update
| • | Implied 35% share of YUPELRI® (revefenacin) net sales1: $15.3M Q4 2021 up 13% from Q4 2020, $56.7M FY 2021 up 13% from FY 2020 |
| • | TRELEGY Q4 2021 global net sales: $479M, up 52% from Q4 2020, $1,674M FY 20212 up 58% from FY 2020 |
| • | Continued execution of cost-cutting initiatives; FY’21 R&D OPEX favorable vs. Guidance |
DUBLIN, IRELAND – FEBRUARY 23, 2022 – Theravance Biopharma, Inc. (“Theravance Biopharma” or the “Company”) (NASDAQ: TBPH) today reported financial results for the fourth quarter and full year ended December 31, 2021.
“While COVID continues to impact communities around the country and health systems are strained, YUPELRI saw the highest quarter of net sales since its launch,” said Rick E Winningham, Chief Executive Officer. “I am proud of our team and their ability to find a way to service the COPD community during this challenging time. YUPELRI once a day dosing is proving increasingly important in helping over-burdened healthcare professionals provide relief to their COPD patients. In addition, GSK’s TRELEGY sales reached their highest levels since launch driven by growth in the asthma indication.”
“Strong performance by YUPELRI in Q4 and into 2022 will enable us to invest in our inhaled JAK inhibitor respiratory pipeline,” continued Winningham. “Through an active business development program, we will continue to unlock value from our non-core asset portfolio throughout 2022. We remain on target to become sustainably cash-flow positive beginning the second half of this year.”
Year-end Highlights
| • | YUPELRI® (revefenacin) inhalation solution, the first and only once-daily, nebulized bronchodilator approved in the US for the maintenance treatment of patients with chronic obstructive pulmonary disease (COPD), continued to increase market share and achieved year-over-year net sales growth of 13%; its share of the long-acting nebulized COPD market increased to 23.2% through October 2021 (up from 18.2% in October 2020). |
| o | On January 10, 2022, the Company announced the enrollment of the first patient in a Phase 4 study of YUPELRI® (read more about the announcement here). |
Economic Interest
| • | TRELEGY (first once-daily single inhaler triple therapy for COPD and asthma), in which the Company holds an economic interest, posted fourth quarter 2021 global net sales of $479 million (up from $315 million, in fourth quarter of 2020) achieving quarterly year-over-year sales growth of 52%, and full year 2021 global net sales of $1,674 million (up from $1,058 million, in 2020), achieving year-over-year sales growth of 58%; Theravance Biopharma is entitled to tiered payments equal to approximately 5.5% to 8.5% of TRELEGY global net sales.3 |
1 While Viatris, Inc. (“Viatris”) records the total YUPELRI net sales, the Company is entitled to a 35% share of the profits and losses pursuant to a co-promotion agreement with Viatris.
2 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 by TRC over the next four fiscal quarters). 75% of the income from the Company’s investment in TRC is pledged to service outstanding notes and 25% of income from the Company’s investment in TRC is retained by the Company.
3 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 by TRC over the next four fiscal quarters). 75% of the income from the Company’s investment in TRC is pledged to service outstanding notes and 25% of income from the Company’s investment in TRC is retained by the Company.
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Fourth Quarter and Full Year Financial Results
| • | Revenue: Total revenue for the fourth quarter of 2021 was $14.9 million, comprised of non-cash collaboration revenue of $2.8 million primarily attributed to our global collaboration with Janssen and $12.1 million in Viatris collaboration revenue. Total revenue for the fourth quarter represents a $3.8 million decrease over the same period in 2020. Full year 2021 revenue was $55.3 million, comprised of non-cash collaboration revenue of $11.5 million primarily attributed to our global collaboration with Janssen and $43.8 million in Viatris collaboration revenue. |
| • | YUPELRI: The Viatris collaboration revenue of $12.1 million for the fourth quarter represents amounts receivable from Viatris and is comprised of the Company’s 35% share of net sales of YUPELRI as well as its proportionate amount of the total shared costs incurred by the two companies. The non-shared YUPELRI costs incurred by Theravance Biopharma are recorded within operating expenses. While Viatris records the total net sales of YUPELRI within its financial statements, our implied 35% share of net sales of YUPELRI for the fourth quarter of 2021 was $15.3 million. |
| ⮚ | Research and Development (R&D) Expenses: R&D expenses for the fourth quarter of 2021 were $31.2 million, compared to $65.2 million in the same period in 2020. Fourth quarter R&D expenses included total non-cash share-based compensation of $3.4 million. In terms of Financial Guidance, full-year 2021 R&D expenses excluding non-cash share-based compensation and one-time restructuring costs were $168.0 million vs. Guidance of $170 million to $180 million. |
| ⮚ | Selling, General and Administrative (SG&A) Expenses: SG&A expenses for the fourth quarter of 2021 were $21.5 million, compared to $30.1 million in the same period in 2020. Fourth quarter SG&A expenses included total non-cash share-based compensation of $5.1 million. In terms of Financial Guidance, full-year 2021 SG&A expenses excluding non-cash share-based compensation and one-time restructuring costs were $71.2 million vs. Guidance of $65 million to $75 million. |
| Ø | Restructuring and Related Expenses: Restructuring expenses for the fourth quarter of 2021 were $18.4 million and primarily comprised of severance costs, termination-related benefits, one-time retention costs, and share-based compensation expense. Full year 2021 restructuring and related expenses were $20.1 million. Cash restructuring expenses were $9.8 million for the fourth quarter of 2021 and $11.5 million for full-year 2021; non-cash restructuring expenses were $8.6 million for the fourth quarter of 2021 and for the full-year 2021. |
| ⮚ | Operating Loss: Operating loss for the fourth quarter of 2021 was $56.2 million compared to $76.5 million in the same period of 2020. Full year 2021 operating loss was $257.8 million, or $195.7 million excluding share-based compensation expense compared to $297.8 million, or $234.8 million excluding share-based compensation expense in 2020. |
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| ⮚ | Cash Position: Cash, cash equivalents and marketable securities totaled $173.5 million as of December 31, 2021. |
2022 Financial Guidance
| • | Operating Expenses (excluding share-based compensation and one-time restructuring costs): The Company expects full year 2022 R&D expense of $45 million to $55 million and SG&A expense of $35 million to $45 million. |
| • | The Company expects to be sustainably cash-flow positive beginning 2H 2022. |
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 / 2:00 pm PT / 10:00 pm GMT. To participate in the live call by telephone, please dial (855) 296-9648 from the US or (920) 663-6266 for international callers, using the confirmation code 7456139. 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 Investors section, Presentations and Events.
A replay of the conference call will be available on Theravance Biopharma’s website for 30 days through March 25, 2022. An audio replay will also be available through 8:00 pm ET on March 2, 2022 by dialing (855) 859-2056 from the US, or (404) 537-3406 for international callers, and then entering confirmation code 7456139.
About Theravance Biopharma
Theravance Biopharma, Inc. is a biopharmaceutical company primarily focused on the discovery, development and commercialization of respiratory medicines. Its core purpose is to create medicines that help improve the lives of patients suffering from respiratory illness.
In pursuit of its purpose, Theravance Biopharma leverages decades of respiratory expertise to discover and develop transformational medicines that make a difference. These efforts have led to the development of FDA-approved YUPELRI® (revefenacin) inhalation solution indicated for the maintenance treatment of patients with chronic obstructive pulmonary disease (COPD). Its respiratory pipeline of internally discovered programs is targeted to address significant patient respiratory needs.
Theravance Biopharma has 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.
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THERAVANCE BIOPHARMA®, THERAVANCE®, and the Cross/Star logo are registered trademarks of the Theravance Biopharma group of companies (in the US and certain other countries).
YUPELRI® is a registered trademark of Mylan Specialty L.P., a Viatris Company. Trademarks, trade names or service marks of other companies appearing on this press release are the property of their respective owners.
Forward-Looking Statements
This press release contains and the conference call will contain certain "forward-looking" statements as that term is defined in the Private Securities Litigation Reform Act of 1995 regarding, among other things, statements relating to goals, plans, objectives, expectations and future events. 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 goals, designs, strategies, plans and objectives, the impact of the Company’s restructuring plan, ability to provide value to shareholders, 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 and the market for products being commercialized, the Company's expectations regarding its allocation of resources, potential regulatory actions and commercialization (including differentiation from other products or potential products and addressable market), product sales or profit share revenue and the Company's expectations for its expenses, excluding share-based compensation and other financial results. 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: disagreements with Innoviva, Inc. and TRC LLC, the uncertainty of arbitration and litigation and the possibility that the results of these proceedings could be adverse to the Company, additional future analysis of the data resulting from our clinical trial(s), 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, products or product candidates are unsafe, ineffective or not differentiated, risks of decisions from regulatory authorities that are unfavorable to the Company, the feasibility of undertaking future clinical trials 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, ability to retain key personnel, the impact of the Company’s restructuring actions on its employees, partners and others. In addition, while we expect the effects of COVID-19 to continue to adversely impact our business operations and financial results, the extent of the impact on our ability to generate revenue from YUPELRI® (revefenacin), our clinical development programs, and the value of and market for our ordinary 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 COVID-19 pandemic, travel restrictions, quarantines, social distancing and business closure requirements in the United States and in other countries, other measures taken by us and those we work with to help protect individuals from contracting COVID-19, and the effectiveness of actions taken globally to contain and treat the disease, including vaccine availability, distribution, acceptance and effectiveness. Other risks affecting Theravance Biopharma are in the Company's Form 10-Q filed with the SEC on November 8, 2021 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 / 917-214-6603
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THERAVANCE BIOPHARMA, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share data)
| Three Months Ended December 31, | Year Ended December 31, | |||||||||||||||
| 2021 | 2020 | 2021 | 2020 | |||||||||||||
| (Unaudited) | (Unaudited) | (1) | ||||||||||||||
| Revenue: | ||||||||||||||||
| Collaboration revenue | $ | 2,813 | $ | 7,083 | $ | 11,463 | $ | 26,464 | ||||||||
| Licensing revenue | - | - | - | 1,500 | ||||||||||||
| Viatris collaboration agreement | 12,132 | 11,647 | 43,848 | 43,893 | ||||||||||||
| Total revenue | 14,945 | 18,730 | 55,311 | 71,857 | ||||||||||||
| Costs and expenses: | ||||||||||||||||
| Research and development (2) | 31,225 | 65,165 | 193,657 | 260,953 | ||||||||||||
| Selling, general and administrative (2) | 21,516 | 30,055 | 99,296 | 108,661 | ||||||||||||
| Restructuring and related expenses (2) | 18,371 | - | 20,142 | - | ||||||||||||
| Total costs and expenses | 71,112 | 95,220 | 313,095 | 369,614 | ||||||||||||
| Loss from operations | (56,167 | ) | (76,490 | ) | (257,784 | ) | (297,757 | ) | ||||||||
| Income from investment in TRC, LLC | 35,305 | 20,139 | 103,987 | 68,438 | ||||||||||||
| Interest expense | (11,662 | ) | (11,680 | ) | (46,889 | ) | (44,585 | ) | ||||||||
| Loss on extinguishment of debt | - | - | - | (15,464 | ) | |||||||||||
| Interest and other income, net | 338 | 798 | 1,109 | 2,831 | ||||||||||||
| Loss before income taxes | (32,186 | ) | (67,233 | ) | (199,577 | ) | (286,537 | ) | ||||||||
| Provision for income tax benefit | 151 | 8,799 | 151 | 8,520 | ||||||||||||
| Net loss | $ | (32,035 | ) | $ | (58,434 | ) | $ | (199,426 | ) | $ | (278,017 | ) | ||||
| Net loss per share: | ||||||||||||||||
| Basic and diluted net loss per share | $ | (0.43 | ) | $ | (0.92 | ) | $ | (2.87 | ) | $ | (4.46 | ) | ||||
| Shares used to compute basic and diluted net loss per share | 73,960 | 63,725 | 69,461 | 62,345 | ||||||||||||
| (1) | The condensed consolidated statement of operations for the year ended December 31, 2020 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, 2020. |
| (2) | Amounts include share-based compensation expense as follows: |
| Three Months Ended December 31, | Year Ended December 31, | |||||||||||||||
| (In thousands) | 2021 | 2020 | 2021 | 2020 | ||||||||||||
| Research and development | $ | 3,442 | $ | 7,570 | $ | 25,634 | $ | 31,294 | ||||||||
| Selling, general and administrative | 5,113 | 7,981 | 28,065 | 31,682 | ||||||||||||
| Restructuring and related expenses | 8,362 | - | 8,362 | - | ||||||||||||
| Total share-based compensation expense | $ | 16,917 | $ | 15,551 | $ | 62,061 | $ | 62,976 | ||||||||
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THERAVANCE BIOPHARMA, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)
| December 31, | December 31, | |||||||
| 2021 | 2020 | |||||||
| (Unaudited) | (1) | |||||||
| Assets | ||||||||
| Current assets: | ||||||||
| Cash and cash equivalents and short-term marketable securities | $ | 173,465 | $ | 292,941 | ||||
| Receivables from collaborative arrangements | 14,065 | 15,868 | ||||||
| Amounts due from TRC, LLC | 43,534 | 53,799 | ||||||
| Prepaid clinical and development services | 10,245 | 20,374 | ||||||
| Other prepaid and current assets | 8,561 | 10,359 | ||||||
| Total current assets | 249,870 | 393,341 | ||||||
| Property and equipment, net | 13,657 | 16,422 | ||||||
| Operating lease assets | 39,690 | 43,260 | ||||||
| Equity in net assets of TRC, LLC | 67,537 | 12,750 | ||||||
| Restricted cash | 836 | 833 | ||||||
| Other assets | 3,229 | 2,451 | ||||||
| Total assets | $ | 374,819 | $ | 469,057 | ||||
| Liabilities and Shareholders' Deficit | ||||||||
| Current liabilities | $ | 58,587 | $ | 123,571 | ||||
| Convertible senior notes due 2023, net | 228,035 | 226,963 | ||||||
| Non-recourse notes due 2035, net | 371,359 | 372,873 | ||||||
| Long-term operating lease liabilities | 52,681 | 47,220 | ||||||
| Other long-term liabilities | 2,730 | 2,181 | ||||||
| Shareholders' deficit | (338,573 | ) | (303,751 | ) | ||||
| Total liabilities and shareholders’ deficit | $ | 374,819 | $ | 469,057 | ||||
| (1) | The condensed consolidated balance sheet as of December 31, 2020 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, 2020. |
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Exhibit 99.2
Fourth Quarter and Full Year 2021 Financial Results and Business Update February 23, 2022 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. © 2022 Theravance Biopharma. All rights reserved.
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 goals, designs, strategies, plans and objectives, the impact of the Company’s restructuring plan, ability to provide value to shareholders, 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 and the market for products being commercialized, the Company's expectations regarding its allocation of resources, potential regulatory actions and commercialization (including differentiation from other products or potential products and addressable market), product sales or profit share revenue and the Company's expectations for its expenses, 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, disagreements with Innoviva , Inc . and TRC LLC, the uncertainty of arbitration and litigation and the possibility that the results of these proceedings could be adverse to the Company, additional future analysis of the data resulting from our clinical trial(s), 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, products or product candidates are unsafe, ineffective or not differentiated, risks of decisions from regulatory authorities that are unfavorable to the Company, the feasibility of undertaking future clinical trials 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, ability to retain key personnel, the impact of the Company’s restructuring actions on its employees, partners and others . Other risks affecting Theravance Biopharma are in the company's Form 10 - Q filed with the SEC on November 8 , 2021 , and other periodic reports filed with the SEC . Forward - looking statements 2
Agenda 3 Introduction Gail B. Cohen Vice President, Corporate Communications Overview Rick E Winningham Chief Executive Officer Commercial and Development Update Rhonda F. Farnum Senior Vice President, Commercial and Medical Affairs Richard A. Graham Senior Vice President, Research and Development Financial Update Andrew A. Hindman Senior Vice President, Chief Financial Officer Closing Remarks Rick E Winningham Chief Executive Officer
Rapid transition to a streamlined, respiratory focused Theravance Biopharma 4 Significant cost reduction program reduces Company size to become sustainably cash - flow positive beginning 2H 2022 Focus on leveraging expertise in developing and commercializing respiratory therapeutics Streamlined R&D investment to focus on highest value core respiratory opportunities Leverage partnerships to unlock value of pipeline non - core assets Overarching goal: maximize shareholder value
Key pillars of respiratory - focused value creation plan 1. 1. Source: TBPH Analysts Consensus [8] December 9, 2021. 2. Source: Bloomberg GSK Analysts Consensus February 15, 2022. 3. 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 A gre ement 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 a re due on or before 2035. 2. JAK, Janus kinase; PIFR, peak inspiratory flow rate. 5 YUPELRI ® ‣ Consensus US peak year sales of ~$400 million 1 ‣ Q4 2021 net sales of $44 million implies run rate annual sales of ~$ 180 million ‣ YUPELRI remains early in its product lifecycle; has demonstrated quarter - over - quarter market share growth ‣ TBPH hospital - based and Viatris community - based sales forces continue driving growth ‣ PIFR - 2 study intended to capture more of the addressable market and further strengthen its competitive advantage ‣ Long patent life Core Respiratory Pipeline Near - term catalysts will inform upside potential of focused pipeline: ‣ Inhaled JAK inhibitor portfolio, with the most advanced candidate being nezulcitinib (TD - 0903), initially targeting acute lung injury and fibrotic disease ‣ Dry - powder inhaled JAK inhibitors to proceed into clinic with next generation compounds after securing partnership TRELEGY ‣ Consensus global peak year sales of ~$ 3.6 billion 2 ‣ Q4 2021 net sales of $ 479 million implies run rate annual sales of ~$ 1.9 billion 3 ‣ Long patent life ‣ TRELEGY - related cash flows to TBPH to increase substantially (once non - recourse note is fully repaid) 3
FDA - approved for maintenance treatment of COPD First and only once - daily, LAMA (long - acting muscarinic agent) nebulized maintenance medicine for COPD
‣ Once - daily LAMAs are first - line therapy for moderate - to - very 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 YUPELRI ® ( revefenacin ) inhalation solution 1. Global Initiative for Chronic Obstructive Lung Disease 2022 Report, htttps://goldcopd.org . 2. TBPH market research (N = 160 physicians); refers to US COPD patients. COPD, chronic obstructive pulmonary disease; LAMA, long - acting muscarinic antagonist. 7 ‣ TBPH and VTRS worldwide strategic collaboration to develop and commercialize nebulized YUPELRI (revefenacin) ‣ Companies co - promote under US profit/loss share 65% 35% FDA - approved for maintenance treatment of COPD First and only once - daily, nebulized maintenance medicine for COPD
TBPH implied 35% of YUPELRI ® US net sales by quarter See TBPH 10K filed February 26, 2021 for greater detail re TBPH implied 35%. 8 TBPH implied 35% of YUPELRI US net sales represents TBPH’s portion of the combined TBPH and VIATRIS net revenue TBPH Implied 35% of Total Net Sales ($M) $3.2 $5.8 $10.4 $12.9 $10.6 $13.0 $13.5 $12.9 $14.6 $13.8 $15.3 0 2 4 6 8 10 12 14 16 18 Q2'19 Q3'19 Q4'19 Q1'20 Q2'20 Q3'20 Q4'20 Q1'21 Q2'21 Q3'21 Q4'21
YUPELRI ® hospital sales and community TRx trends Continued market share growth across both the hospital and retail channels 1.1% 2.2% 3.4% 5.4% 6.5% 6.6% 7.4% 7.8% 8.7% 9.5% 10.8% 0% 5% 10% 15% 20% 25% Q2'19 Q3'19 Q4'19 Q1'20 Q2'20 Q3'20 Q4'20 Q1'21 Q2'21 Q3'21 Q4'21 Hospital LA - NEB Market Share* Hospital Market Share YUPELRI LA-NEB Market Share 1. Joint VTRS/TBPH Market Research. * Hospital LA - NEB Market Share - IQVIA DDD through 12/31/2021. ** Community LA - NEB Market Share - IQVIA XPO Excl. LTC (Retail) and SolutionsRx (DME / Med B FFS) through 10/31/2021 (Q4’21 Community LA - NEB Market Share Incomplete). *** Retail TRx Volume - Symphony Health METYS Prescription Dashboard through 12/31/2021. 9 TRx volume represents retail only which is typically 33% of Retail + DME Reported DME volume, while lagged, typically follows Retail volume trends 1.5% 6.1% 9.8% 13.1% 15.2% 16.3% 17.4% 18.7% 19.7% 21.4% 22.7% 23.2% 0K 5K 10K 15K 20K 25K 0% 5% 10% 15% 20% 25% Q1'19 Q2'19 Q3'19 Q4'19 Q1'20 Q2'20 Q3'20 Q4'20 Q1'21 Q2'21 Q3'21 Q4'21 Retail TRx Volume*** Community LA - NEB Market Share** Community Market Share with TRx Retail TRx YUPELRI LA-NEB Market Share Most patients who receive YUPELRI ® in the hospital are discharged with an Rx 1 **Community LA - NEB Market Share includes Retail + DME / Med B FFS through Oct’21 LA - NEB Market: YUPELRI, BROVANA, LONHALA, PERFOROMIST, arformoterol , formoterol
0 2,000 4,000 6,000 8,000 10,000 YULPELRI Weekly Hospital Doses YUPELRI ® hospital volume has returned to growth Source: IQVIA DDD through 12/31/2021. 10 2019 Growth from launch 2020 Flat 2021 Return to growth Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
Favorable YUPELRI ® outlook in 2022 and beyond 11 1. Data on file from TBPH survey of HCPs October 2020 - October 2021. COPD, chronic obstructive pulmonary disease; PIFR, peak inspiratory flow rate; PPE, personal protective equipment; QD, once a da y. Additional potential growth opportunities Observations from the field 1 ‣ Pulmonologists / other HCPs have resumed routine testing to evaluate and diagnose COPD patients ‣ In office nebulization for COPD patients has resumed ‣ 99% of hospital - based HCPs support nebulization regardless of COVID - 19 status if proper PPE is worn ‣ More hospitals becoming or are “all neb” ‣ QD dosing important to alleviate health systems overwhelmed by rising COVID - 19 cases (over - taxed hospitals and long - term care facilities) ‣ PIFR - 2 study: intended to capture more of the addressable market and further strengthen its competitive advantage ‣ China opportunity : e xclusive rights licensed to Viatris in 2019; p otential development and sales milestones totaling $54M / low double - digit tiered royalties on net sales
Pipeline focused on highest value core respiratory opportunities 1. Excluding programs that are in the process of being wound down following restructuring. JAK, Janus kinase; PIFR, peak inspiratory flow rate. 12 New Theravance Biopharma: Core Respiratory Focused pipeline of core respiratory programs 1 Implement partnering strategy to maximize value of pipeline assets ‣ PIFR - 2 Phase 4 study intended to capture more of the addressable market and further strengthen its competitive advantage ‣ Inhaled JAK inhibitor portfolio which includes nezulcitinib
A new, respiratory focused Theravance Biopharma 1. TBPH estimate derived from integrating multiple data sources 2. TBPH holds 85% economic interest in upward - tiering royalty st ream 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 p led ged to service outstanding notes, 25% of royalties received retained by TBPH. All statements concerning TRELEGY ELLIPTA based on publicly available information. ALK5i, transforming growth factor β receptor I kinase inhibitor; CD, Crohn’s di sease; COPD, chronic obstructive pulmonary disease; FF/UMEC/VI, fluticasone furoate/umeclidinium/ vilanterol; JAKi , JAK inhibitor; LAMA, long - acting muscarinic antagonist ; nOH , neurogenic orthostatic hypotension; NRI, norepinephrine reuptake inhibitor; PIFR, peak inspiratory flow rate; UC, ulcerative colitis. 13 Program Indication US Patients 1 Research Phase 1 Phase 2 Phase 3 Filed Marketed Phase 4 Collaborator Respiratory Assets YUPELRI (revefenacin) LAMA COPD patients with suboptimal PIFR >8mm Nezulcitinib (TD - 0903) Inhaled JAKi Acute and chronic lung inflammation, fibrotic disease >32mm Inhaled JAKi Asthma ~25mm Economic Interests TRELEGY 2 FF/UMEC/VI COPD >8mm GSK & Innoviva, Inc. Asthma ~25mm Skin - selective JAKi Dermatological diseases >8mm Non - Core Assets * Ampreloxetine (TD - 9855) NRI S ymptomatic nOH ~350k Izencitinib (TD - 1473) GI JAKi UC ~900k CD ~800k TD - 5202 Irreversible JAK3i Celiac disease UC CD ~5mm Inhaled ALK5i Idiopathic pulmonary fibrosis ~140k Phase 3 Phase 2 Phase 2 Phase 1 Phase 1 Marketed Phase 4 PIFR - 2 Study Marketed Phase 1 Phase 2b/3 Research Marketed *Limited additional capital investment planned post Q1 2022
Economic interest GSK’s TRELEGY ELLIPTA (FF/UMEC/VI): First and only once - daily single inhaler triple therapy
Economic interest in GSK’s TRELEGY 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 are due on or before 2035. All statements concerning TRELEGY based on publicly available information. TRELEGY is FF/UMEC/VI or flutic aso ne furoate/umeclidinium/vilanterol; comprised of inhaled corticosteroid, long - acting muscarinic receptor antagonist, and long - acting β2 agonists, active components of Anoro (UMEC/VI). COPD, chronic obstructive pulmonary disease. 15 TRELEGY Upward - tiering royalties of ~5.5 – 8.5% of global net sales 1 Q4 global net sales of $ 479M Year - over - year sales growth of 52 % from the same period in 2020 TRELEGY now has 53 % of US triple therapy patients for COPD and 71 % global share 0 100 200 300 400 500 600 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 51 Monthly TRx Volume (Thousands) Month Post Launch Strongest US ELLIPTA Launch ANORO ELLIPTA ARNUITY ELLIPTA BREO ELLIPTA INCRUSE ELLIPTA Launched in US in November 2017 Source: GSK, Symphony Health Metys monthly TRx data for the time period Sept'13 to Dec'21. TRELEGY Mortality Ad Comm TRELEGY Asthma Approval BREO Asthma Approval TRELEGY
Fourth quarter 2021 financial highlights 1. Cash, cash equivalents and marketable securities. 2. Amounts include share - based compensation. 3. Excludes share - based compensation and restructuring expense. 16 $173.5 million cash 1 as of December 31, 2021 Research and development operating expense 3 27,783 57,595 168,023 229,659 Selling, general and administrative operating expense 3 16,403 22,074 71,231 76,979 ($, in thousands) Revenue: Collaboration revenue Licensing revenue Viatris collaboration agreement Total revenue Costs and expenses: Research and development 2 Selling, general and administrative 2 Total costs and expenses Loss from operations Share - based compensation expense: Research and development Selling, general and administrative Total share - based compensation expense Operating expense excluding share - based compensation and one - time restructuring expense: ( 56,167) (76,490) ( 257,784 ) (297,757) 3,442 7,570 25,634 31,294 8,362 8,362 16,917 15,551 62,061 62,976 31,225 65,165 193,657 260,953 21,516 30,055 99,296 108,661 71,112 95,220 313,095 369,614 14,945 18,730 55,311 71,857 $ 2,813 $ 7,083 $ 11,463 $ 26,464 — — — 1,500 12,132 11,647 43,848 43,893 Three Months Ended December 31, 2021 2020 (Unaudited) Year Ended December 31, 2021 2020 (Unaudited) Restructuring and related expenses 2 18,371 — 20,142 — Restructuring and related expenses 5,113 7,981 28,065 3,682 — —
Financial Guidance 1. Excluding share - based compensation (SBC) and one - time restructuring, severance and termination costs. 17 Execution of cost - cutting initiatives resulted in lower FY 2021 Actuals vs. OPEX guidance 1 : – R&D: $168M Actuals vs. range of $170 – $180M – SG&A: $71M Actuals vs. range of $65 – $75M Reiterating 2022 OPEX guidance 1 : – R&D: range of $45 – 55M – SG&A: range of $35 – 45M 2022 guidance includes ~$10M in non - recurring spend, mostly in R&D: – Majority in Q1 to support completion of late - stage programs – OPEX Q2 and onward will reflect recurring spend only Theravance Biopharma is projected to be sustainably cash - flow positive beginning in 2H 2022
Rapid transition to a streamlined, respiratory focused Theravance Biopharma 18 Significant cost reduction program reduces Company size to become sustainably cash - flow positive beginning 2H 2022 Focus on leveraging expertise in developing and commercializing respiratory therapeutics Streamlined R&D investment to focus on highest value core respiratory opportunities Leverage partnerships to unlock value of pipeline non - core assets Overarching goal: maximize shareholder value
Q&A Session Rick E Winningham Chairman and Chief Executive Officer Andrew A. Hindman Senior Vice President, Chief Financial Officer Rhonda F. Farnum Senior Vice President, Commercial and Medical Affairs Richard A. Graham Senior Vice President, Research and Development
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. 20
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. COPD, chronic obstructive pulmonary disease; LAMA, long - acting muscarinic antagonist. 21