0001558370-22-012666 | 10-Q | XBRL Viewer

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Document and Entity Information - shares	6 Months Ended
Document and Entity Information - shares	Jun. 30, 2022	Aug. 01, 2022
Document and Entity Information
Document Type	10-Q
Document Quarterly Report	true
Document Period End Date	Jun. 30, 2022
Document Transition Report	false
Entity File Number	001-36033
Entity Registrant Name	THERAVANCE BIOPHARMA, INC.
Entity Incorporation, State or Country Code	KY
Entity Tax Identification Number	98-1226628
Entity Address, Address Line One	PO Box 309
Entity Address, Address Line Two	Ugland House, South Church Street
Entity Address, City or Town	George Town, Grand Cayman
Entity Address, Country	KY
Entity Address, Postal Zip Code	KY1-1104
City Area Code	650
Local Phone Number	808-6000
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Large Accelerated Filer
Entity Small Business	false
Entity Emerging Growth Company	false
Entity Shell Company	false
Title of 12(b) Security	Ordinary Share $0.00001 Par Value
Trading Symbol	TBPH
Security Exchange Name	NASDAQ
Entity Common Stock, Shares Outstanding		76,427,244
Entity Central Index Key	0001583107
Current Fiscal Year End Date	--12-31
Document Fiscal Year Focus	2022
Document Fiscal Period Focus	Q2
Amendment Flag	false

CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands	Jun. 30, 2022	Dec. 31, 2021
Current assets:
Cash and cash equivalents	$ 87,292	$ 89,959
Short-term marketable securities	45,558	83,506
Receivables from collaborative arrangements	12,488	14,065
Amounts due from TRC, LLC		43,534
Prepaid clinical and development services	2,311	10,245
Other prepaid and current assets	7,080	8,561
Total current assets	154,729	249,870
Property and equipment, net	12,531	13,657
Operating lease assets	41,112	39,690
Equity in net assets of TRC, LLC	148,250	67,537
Restricted cash	836	837
Other assets	3,303	3,228
Total assets	360,761	374,819
Current liabilities:
Accounts payable	3,074	3,098
Accrued personnel-related expenses	6,958	12,796
Accrued clinical and development expenses	7,627	17,010
Accrued general and administrative expenses	6,052	2,898
Accrued interest payable	3,990	3,940
Current portion of non-recourse notes due 2035, net		16,940
Operating lease liabilities	2,624	503
Deferred revenue	24	98
Other accrued liabilities	2,275	1,304
Total current liabilities	32,624	58,587
Convertible senior notes due 2023, net	228,571	228,035
Non-recourse notes due 2035, net	396,125	371,359
Long-term operating lease liabilities	50,642	52,681
Long-term deferred revenue	204	310
Other long-term liabilities	2,404	2,420
Commitments and contingencies
Shareholders' Deficit
Preferred shares, $0.00001 par value: 230 shares authorized, no shares issued or outstanding
Ordinary shares, $0.00001 par value: 200,000 shares authorized; 76,427 and 74,435 shares issued and outstanding at June 30, 2022 and December 31, 2021, respectively	1	1
Additional paid-in capital	1,410,415	1,387,469
Accumulated other comprehensive loss	(45)
Accumulated deficit	(1,760,180)	(1,726,043)
Total shareholders' deficit	(349,809)	(338,573)
Total liabilities and shareholders' deficit	$ 360,761	$ 374,819

CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares shares in Thousands	Jun. 30, 2022	Dec. 31, 2021
CONDENSED CONSOLIDATED BALANCE SHEETS
Preferred shares, par value (in dollars per share)	$ 0.00001	$ 0.00001
Preferred shares, shares authorized	230	230
Preferred shares, shares issued	0	0
Preferred shares, outstanding shares	0	0
Ordinary shares, par value (in dollars per share)	$ 0.00001	$ 0.00001
Ordinary shares, authorized shares	200,000	200,000
Ordinary shares, shares issued	76,427	74,435
Ordinary shares, outstanding shares	76,427	74,435

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS - USD ($) shares in Thousands, $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2022	Jun. 30, 2021	Jun. 30, 2022	Jun. 30, 2021
Revenue:
Total revenue	$ 11,050	$ 12,914	$ 24,246	$ 27,171
Expenses:
Research and development (1)	15,571	51,093	38,824	118,692
Selling, general and administrative (1)	16,986	25,931	34,828	56,481
Transaction-related legal expenses (Note 13)	3,778		5,057
Restructuring and related expenses (1)	1,594		10,918
Total expenses	37,929	77,024	89,627	175,173
Total share-based compensation expense	9,709	14,941	24,254	30,773
Loss from operations	(26,879)	(64,110)	(65,381)	(148,002)
Income from investment in TRC, LLC	28,127	21,926	53,237	38,473
Interest expense	(11,884)	(11,612)	(23,539)	(23,485)
Interest income and other income (expense), net	2,440	1,171	2,065	937
Loss before income taxes	(8,196)	(52,625)	(33,618)	(132,077)
Provision for income tax benefit (expense)	5	220	(519)	(7)
Net loss	(8,191)	(52,405)	(34,137)	(132,084)
Net unrealized loss on available-for-sale investments	(17)	(9)	(45)	(39)
Total comprehensive loss	$ (8,208)	$ (52,414)	$ (34,182)	$ (132,123)
Net loss per share:
Basic net loss per share	$ (0.11)	$ (0.80)	$ (0.45)	$ (2.03)
Diluted net loss per share	$ (0.11)	$ (0.80)	$ (0.45)	$ (2.03)
Shares used to compute basic net loss per share	76,270	65,669	75,761	65,085
Shares used to compute diluted net loss per share	76,270	65,669	75,761	65,085
Research and development
Expenses:
Restructuring and related expenses (1)	$ 400		$ 5,100
Total share-based compensation expense	3,556	$ 7,315	8,086	$ 15,236
Selling, general and administrative
Expenses:
Restructuring and related expenses (1)	1,200		5,800
Total share-based compensation expense	5,794	7,626	11,292	15,537
Restructuring and related expenses
Expenses:
Total share-based compensation expense	359		4,876
Viatris collaboration agreement
Revenue:
Total revenue	10,878	10,934	21,565	21,319
Collaborative revenue
Revenue:
Total revenue	$ 172	$ 1,980	181	$ 5,852
Licensing revenue
Revenue:
Total revenue			$ 2,500

CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS' DEFICIT - USD ($) shares in Thousands, $ in Thousands	Ordinary Shares	Additional Paid-in Capital	Accumulated Other Comprehensive Income (Loss)	Accumulated Deficit	Total
Balances at Dec. 31, 2020	$ 1	$ 1,222,818	$ 47	$ (1,526,617)	$ (303,751)
Balances (in shares) at Dec. 31, 2020	64,328
Increase (Decrease) in Stockholders' Equity
Net proceeds from sale of ordinary shares		108,180			108,180
Net proceeds from sale of ordinary shares (in shares)	7,705
Proceeds from ESPP purchases		2,862			2,862
Proceeds from ESPP purchases (in shares)	189
Employee share-based compensation expense		30,773			30,773
Issuance of restricted shares (in shares)	1,587
Option exercises		5			5
Repurchase of shares to satisfy tax withholding		(6,320)			(6,320)
Repurchase of shares to satisfy tax withholding (in shares)	(339)
Net unrealized gain (loss) on marketable securities			(39)		(39)
Net loss				(132,084)	(132,084)
Balances at Jun. 30, 2021	$ 1	1,358,318	8	(1,658,701)	(300,374)
Balances (in shares) at Jun. 30, 2021	73,470
Balances at Mar. 31, 2021	$ 1	1,233,060	17	(1,606,296)	(373,218)
Balances (in shares) at Mar. 31, 2021	65,218
Increase (Decrease) in Stockholders' Equity
Net proceeds from sale of ordinary shares		108,180			108,180
Net proceeds from sale of ordinary shares (in shares)	7,705
Proceeds from ESPP purchases		2,862			2,862
Proceeds from ESPP purchases (in shares)	189
Employee share-based compensation expense		14,941			14,941
Issuance of restricted shares (in shares)	399
Option exercises		2			2
Repurchase of shares to satisfy tax withholding		(727)			(727)
Repurchase of shares to satisfy tax withholding (in shares)	(41)
Net unrealized gain (loss) on marketable securities			(9)		(9)
Net loss				(52,405)	(52,405)
Balances at Jun. 30, 2021	$ 1	1,358,318	8	(1,658,701)	(300,374)
Balances (in shares) at Jun. 30, 2021	73,470
Balances at Dec. 31, 2021	$ 1	1,387,469		(1,726,043)	$ (338,573)
Balances (in shares) at Dec. 31, 2021	74,435				74,435
Increase (Decrease) in Stockholders' Equity
Proceeds from ESPP purchases		487			$ 487
Proceeds from ESPP purchases (in shares)	72
Employee share-based compensation expense		24,254			24,254
Issuance of restricted shares (in shares)	2,109
Repurchase of shares to satisfy tax withholding		(1,795)			(1,795)
Repurchase of shares to satisfy tax withholding (in shares)	(189)
Net unrealized gain (loss) on marketable securities			(45)		(45)
Net loss				(34,137)	(34,137)
Balances at Jun. 30, 2022	$ 1	1,410,415	(45)	(1,760,180)	$ (349,809)
Balances (in shares) at Jun. 30, 2022	76,427				76,427
Balances at Mar. 31, 2022	$ 1	1,400,566	(28)	(1,751,989)	$ (351,450)
Balances (in shares) at Mar. 31, 2022	76,081
Increase (Decrease) in Stockholders' Equity
Proceeds from ESPP purchases		487			487
Proceeds from ESPP purchases (in shares)	72
Employee share-based compensation expense		9,709			9,709
Issuance of restricted shares (in shares)	313
Repurchase of shares to satisfy tax withholding		(347)			(347)
Repurchase of shares to satisfy tax withholding (in shares)	(39)
Net unrealized gain (loss) on marketable securities			(17)		(17)
Net loss				(8,191)	(8,191)
Balances at Jun. 30, 2022	$ 1	$ 1,410,415	$ (45)	$ (1,760,180)	$ (349,809)
Balances (in shares) at Jun. 30, 2022	76,427				76,427

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands	6 Months Ended
	Jun. 30, 2022	Jun. 30, 2021
Operating activities
Net loss	$ (34,137)	$ (132,084)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization	2,402	2,926
Amortization and accretion income, net	(31)	31
Share-based compensation	24,254	30,773
Gain on disposal of property and equipment	(96)
Gain on sale of Velusetrag	(2,721)
Amortization of right-of use assets	1,314	1,752
Gain from lease modification	(47)
Undistributed earnings from TRC, LLC	(37,179)	2,986
Interest shortfall on 2035 notes, net	7,372
Other		(168)
Changes in operating assets and liabilities:
Receivables from collaborative and licensing arrangements	1,577	3,648
Prepaid clinical and development services	7,934	4,461
Other prepaid and current assets	2,619	(1,993)
Right-of-use lease asstes	(2,689)
Other assets	(145)	997
Accounts payable	(26)	4,026
Accrued personnel-related expenses, accrued clinical and development expenses, and other accrued liabilities	(11,135)	(33,125)
Accrued interest payable	50	(74)
Deferred revenue	(180)	(5,852)
Operating lease liabilities	82	1,718
Other long-term liabilities	(17)
Net cash used in operating activities	(40,799)	(119,978)
Investing activities
Purchases of property and equipment	(363)	(1,923)
Purchases of marketable securities	(53,763)	(40,014)
Maturities of marketable securities	91,699	191,400
Proceeds from the sale of property and equipment	1,866
Net cash provided by investing activities	39,439	149,463
Financing activities
Proceeds from the sale of ordinary shares, net		108,180
Principal payment on 2035 notes		(10,730)
Proceeds from ESPP purchases	487	2,862
Proceeds from option exercises		5
Repurchase of shares to satisfy tax withholding	(1,795)	(6,320)
Net cash (used in) provided by financing activities	(1,308)	93,997
Net increase in cash, cash equivalents, and restricted cash	(2,668)	123,482
Cash, cash equivalents, and restricted cash at beginning of period	90,796	82,300
Cash, cash equivalents, and restricted cash at end of period	88,128	205,782
Supplemental disclosure of cash flow information
Cash paid for interest	15,127	22,490
Cash (received) paid for income taxes, net	$ 25	$ 12

Organization and Summary of Significant Accounting Policies

6 Months Ended

Jun. 30, 2022

Organization and Summary of Significant Accounting Policies.

Organization and Summary of Significant Accounting Policies

1. Organization and Summary of Significant Accounting Policies

Theravance Biopharma, Inc. (“Theravance Biopharma” or the “Company”) is a biopharmaceutical company primarily focused on the discovery, development, and commercialization of medicines. The Company’s core purpose is to create medicines that make a difference^® in people's lives.

On July 20, 2022, the Company successfully completed the sale of its units in Theravance Respiratory Company, LLC, representing its 85% economic interests in the sales-based royalty rights on worldwide net sales of GSK’s TRELEGY ELLIPTA (“TRELEGY”) to Royalty Pharma Investments 2019 ICAV. In conjunction with the closing of the sale, the Company repaid its 9.5% Non-Recourse Notes Due 2035 for approximately $420.0 million. See Note 13. Subsequent Events” for more information regarding the sale.

Basis of Presentation

The Company’s condensed consolidated financial information as of June 30, 2022 and for the three and six months ended June 30, 2022 and 2021 is unaudited but includes all adjustments (consisting only of normal recurring adjustments), which are considered necessary for a fair presentation of the financial position at such date and of the operating results and cash flows for those periods, and have been prepared in accordance with United States (“US”) generally accepted accounting principles (“GAAP”) for interim financial information. Accordingly, they do not include all of the information and notes required by GAAP for complete financial statements. The accompanying unaudited condensed consolidated financial statements should be read in conjunction with the audited consolidated December 31, 2021 financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2021, filed with the Securities and Exchange Commission (“SEC”) on February 28, 2022.

The results for the three and six months ended June 30, 2022 are not necessarily indicative of the results to be expected for the year ending December 31, 2022, or for any other interim period or for any future period. These condensed consolidated financial statements include the accounts of the Company and its subsidiaries, and intercompany transactions and balances have been eliminated.

Use of Estimates

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses, and related disclosures in the condensed consolidated financial statements and accompanying notes. Management bases its estimates on historical experience and on assumptions believed to be reasonable under the circumstances. Actual results could differ materially from those estimates.

Significant Accounting Policies

There have been no material revisions in the Company’s significant accounting policies described in Note 1 to the consolidated financial statements included in its Annual Report on Form 10-K for the year ended December 31, 2021.

Recently Adopted Accounting Pronouncements

In August 2020, the FASB issued ASU 2020-06, Debt - Debt with Conversion and other Options (Subtopic 470-20) and Derivatives and Hedging: Contracts in Entity’s Own Equity (Subtopic 815-40) (“ASU 2020-06”). ASU 2020-06 simplifies the complexity associated with applying GAAP for certain financial instruments with characteristics of liabilities and equity by removing certain accounting models which separate the embedded conversion features from the host contract for convertible instruments. The standard also enhances the consistency of earnings-per-share calculations by requiring that an entity use the if-converted method and that the effect of potential share settlement be included in diluted earnings-per-share calculations. ASU 2020-06 became effective for fiscal years and interim periods within those fiscal years

beginning after December 15, 2021. The Company evaluated ASU 2020-06 and determined that its adoption did not have an impact on the Company’s condensed consolidated financial statements and related disclosures.

Recently Issued Accounting Pronouncements Not Yet Adopted

The Company has evaluated other recently issued accounting pronouncements and does not currently believe that any of these pronouncements will have a material impact on its condensed consolidated financial statements and related disclosures.

Net Loss per Share

6 Months Ended

Jun. 30, 2022

Net Loss per Share

Net Loss per Share

2. Net Loss per Share

Basic net loss per share is computed by dividing net loss by the weighted-average number of shares outstanding, less ordinary shares subject to forfeiture. Diluted net loss per share is computed by dividing net loss by the weighted-average number of shares outstanding, less ordinary shares subject to forfeiture, plus all additional ordinary shares that would have been outstanding, assuming dilutive potential ordinary shares had been issued for other dilutive securities.


	Three Months Ended June 30,				Six Months Ended June 30,
(In thousands, except per share data)	2022		2021		2022		2021
Numerator:
Net loss	$	(8,191)	$	(52,405)	$	(34,137)	$	(132,084)
Denominator:
Weighted-average ordinary shares outstanding		76,270		65,669		75,761		65,199
Less: weighted-average ordinary shares subject to forfeiture		—		—		—		(114)
Weighted-average ordinary shares used to compute basic and diluted net loss per share		76,270		65,669		75,761		65,085
Basic and diluted net loss per share	$	(0.11)	$	(0.80)	$	(0.45)	$	(2.03)

For the three and six months ended June 30, 2022 and 2021, diluted and basic net loss per share were identical since potential ordinary shares were excluded from the calculation, as their effect was anti-dilutive.

Anti-dilutive Securities

The following ordinary equivalent shares were not included in the computation of diluted net loss per share because their effect was anti-dilutive:


	Three Months Ended June 30,		Six Months Ended June 30,
(In thousands)	2022	2021	2022	2021
Share issuances under equity incentive plans and ESPP	5,660	6,228	6,239	8,307
Share issuances upon the conversion of convertible senior notes	6,676	6,676	6,676	6,676
Total	12,336	12,904	12,915	14,983

Revenue

6 Months Ended

Jun. 30, 2022

Revenue

Revenue

3. Revenue

Revenue from Collaborative Arrangements

Viatris

In January 2015, the Company and Viatris Inc. (“Viatris”) established a strategic collaboration (the “Viatris Agreement”) for the development and commercialization of revefenacin, including YUPELRI^® (revefenacin) inhalation solution. The Company entered into the collaboration to expand the breadth of its revefenacin development program and extend its commercial reach beyond the acute care setting.

In the US, Viatris is leading the commercialization of YUPELRI, and the Company co-promotes the product under a profit and loss sharing arrangement (65% to Viatris; 35% to Theravance Biopharma). Outside the US (including China and adjacent territories), Viatris is responsible for development and commercialization and will pay the Company a tiered royalty on net sales at percentage royalty rates ranging from low double-digits to mid-teens. Viatris is the principal in the sales transactions, and as a result, the Company does not reflect the product sales in its condensed consolidated financial statements.

As of June 30, 2022, the Company is eligible to receive from Viatris potential global development, regulatory and sales milestone payments totaling up to $257.5 million in the aggregate, with $205.0 million associated with YUPELRI monotherapy, and $52.5 million associated with future potential combination products. Of the $205.0 million associated with monotherapy, $187.5 million relates to sales milestones based on achieving certain levels of net sales and $17.5 million relates to global development and regulatory actions. The $52.5 million associated with future potential combination products relates solely to development and regulatory actions.

The Viatris Agreement is considered to be within the scope of ASC 808 and partially within the scope of ASC 606, as the parties are active participants and exposed to the risks and rewards of the collaborative activity with a unit of account provided to Viatris as a customer. Under the terms of the Viatris Agreement, which included the delivery by the Company of a license to Viatris to develop and commercialize revefenacin in exchange for $15.0 million received in 2015, Viatris was responsible for reimbursement of the Company’s costs related to the registrational program up until the approval of the first new drug application in November 2018; thereafter, R&D expenses are shared. Performing R&D services for reimbursement is considered a collaborative activity under the scope of ASC 808. Reimbursable program costs are recognized proportionately with the performance of the underlying services and accounted for as reductions to R&D expense. For this unit of account, the Company did not recognize revenue or analogize to ASC 606 and, as such, the reimbursable program costs are excluded from the transaction price. The Company determined the license to develop and commercialize revefenacin to be a unit of account and a separate performance obligation, for which Viatris is a customer, with the $15.0 million for the delivery of the license representing the transaction price.

The future potential milestone amounts for the Viatris Agreement were not included in the transaction price, as they were all determined to be fully constrained following the concepts of ASC 606. As part of the Company’s evaluation of the development and regulatory milestones constraint, the Company determined that the achievement of such milestones is contingent upon success in future clinical trials and regulatory approvals which are not within its control and uncertain at this stage. The Company expects that the sales-based milestone payments and royalty arrangements will be recognized when the sales occur or the milestone is achieved.

Following the US Food and Drug Administration (“FDA”) approval of YUPELRI in November 2018, net amounts payable to or receivable from Viatris each quarter under the profit-sharing structure are disaggregated according to their individual components. In accordance with the applicable accounting guidance, amounts receivable from Viatris in connection with the commercialization of YUPELRI are recorded within the condensed consolidated statements of operations as revenue from “Viatris collaboration agreement” irrespective of whether the overall collaboration is profitable. Amounts payable to Viatris, if any, in connection with the commercialization of YUPELRI are recorded within the condensed consolidated statements of operations as a collaboration loss within selling, general and administrative expenses. Any reimbursement from Viatris attributed to the 65% cost-sharing of the Company’s R&D expenses is characterized as a reduction of R&D expense, as the Company does not consider performing research and development services for reimbursement to be a part of its ordinary activities. For the three and six months ended June 30, 2022, YUPELRI continued to be profitable for the Company.

The following YUPELRI-related amounts were recognized within revenue in the Company’s condensed consolidated statements of operations:


	Three Months Ended June 30,				Six Months Ended June 30,
(In thousands)	2022		2021		2022		2021
Viatris collaboration agreement - Amounts receivable from Viatris	$	10,878	$	10,934	$	21,565	$	21,319

While Viatris records the total net sales of YUPELRI within its consolidated financial statements, Viatris collaboration agreement revenue includes the Company’s implied 35% share of net sales of YUPELRI for the three and six months ended June 30, 2022 of $17.2 million and $32.5 million, respectively, before deducting shared expenses. For the three and six months ended June 30, 2021, the Company’s implied 35% share of net sales of YUPELRI were $14.6 million and $27.5 million, respectively, before deducting shared expenses.

Other Collaborative Arrangements

The Company recognized revenues from its other collaborative arrangements as follows:


	Three Months Ended June 30,				Six Months Ended June 30,
(In thousands)	2022		2021		2022		2021
Alfasigma	$	166	$	3	$	169	$	7
Viatris		6		6		12		12
Janssen		—		1,971		—		5,833
Total collaboration revenue	$	172	$	1,980	$	181	$	5,852

All of the recognized revenues from the Company’s other collaborative arrangements presented in the table above were included in deferred revenue at the beginning of the respective periods.

Janssen Biotech

In February 2018, the Company entered into a global co-development and commercialization agreement with Janssen Biotech, Inc. (“Janssen”) for izencitinib and related back-up compounds for inflammatory intestinal diseases, including ulcerative colitis and Crohn’s disease (the “Janssen Agreement”). The Company received an upfront payment of $100.0 million related to the Janssen Agreement. Following unfavorable Phase 3 clinical trial results for izencitinib announced in August 2021, Janssen terminated the Janssen Agreement effective January 16, 2022. As a result, the Company did not recognize any collaboration revenue related to the Janssen Agreement for the three and six months ended June 30, 2022. For the three and six months ended June 30, 2021, the Company recognized $2.0 million and $5.8 million, respectively, in collaboration revenue related to the Janssen Agreement.

Reimbursement of R&D Expenses

As noted above, under certain collaborative arrangements the Company is entitled to reimbursement of certain R&D expenses. Activities under collaborative arrangements for which the Company is entitled to reimbursement are considered to be collaborative activities under the scope of ASC 808. For these units of account, the Company does not analogize to ASC 606 or recognize revenue. The Company records reimbursement payments received from its collaboration partners as reductions to R&D expense.

The following table summarizes the reductions to R&D expense related to the reimbursement payments:


	Three Months Ended June 30,				Six Months Ended June 30,
(In thousands)	2022		2021		2022		2021
Viatris	$	1,543	$	67	$	3,079	$	161
Janssen		—		1,193		—		2,525
Total reduction to R&D expense, net	$	1,543	$	1,260	$	3,079	$	2,686

Revenue from Licensing Arrangements

Pfizer

In December 2019, the Company entered into a global license agreement with Pfizer Inc. (“Pfizer”) for our preclinical skin-selective, locally-acting pan-JAK inhibitor program (the “Pfizer Agreement”). The compounds in this program are designed to target validated pro-inflammatory pathways and are specifically designed to possess skin-selective activity with minimal systemic exposure.

Under the Pfizer Agreement, Pfizer has an exclusive license to develop, manufacture and commercialize certain compounds for all uses other than gastrointestinal, ophthalmic, and respiratory applications. The Company received an upfront cash payment of $10.0 million in 2019, and in March 2022, the Company recognized $2.5 million in licensing revenue related to a development milestone payment from Pfizer for the dosing of the first patient in the Phase 1 clinical trial.

As of June 30, 2022, the Company is eligible to receive up to an additional $237.5 million in development and sales milestone payments from Pfizer. In addition, the Company is eligible to receive a tiered royalty on worldwide net sales of any potential products under the license at percentage royalty rates ranging from middle single-digits to low double-digits.

- Definition

The entire disclosure of revenue from contract with customer to transfer good or service and to transfer nonfinancial asset. Includes, but is not limited to, disaggregation of revenue, credit loss recognized from contract with customer, judgment and change in judgment related to contract with customer, and asset recognized from cost incurred to obtain or fulfill contract with customer. Excludes insurance and lease contracts.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 606
-URI http://asc.fasb.org/topic&trid=49130388

Reference 2: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 606
-SubTopic 10
-Section 50
-Paragraph 10
-URI http://asc.fasb.org/extlink&oid=123351226&loc=SL49130551-203045

Reference 3: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 606
-SubTopic 10
-Section 50
-Paragraph 13
-Subparagraph (b)(2)
-URI http://asc.fasb.org/extlink&oid=123351226&loc=SL49130556-203045

Reference 4: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 606
-SubTopic 10
-Section 50
-Paragraph 12
-Subparagraph (b)
-URI http://asc.fasb.org/extlink&oid=123351226&loc=SL49130554-203045

Reference 5: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 606
-SubTopic 10
-Section 50
-Paragraph 9
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Reference 6: http://www.xbrl.org/2003/role/disclosureRef
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+ Details

Sale of Velusetrag

6 Months Ended

Jun. 30, 2022

Sale of Velusetrag

Sale of Velusetrag

4. Sale of Velusetrag

Velusetrag is an oral, investigational medicine developed for gastrointestinal motility disorders. It is a highly selective agonist with high intrinsic activity at the human 5-HT4 receptor.

In 2012, the Company partnered with Alfasigma S.p.A. (“Alfasigma”) in the development of velusetrag and its commercialization in certain countries. In April 2018, Alfasigma exercised its option to continue to develop and commercialize velusetrag, and the Company elected not to pursue further development. Global rights to develop, manufacture and commercialize velusetrag were transferred to Alfasigma under the terms of the collaboration arrangement.

On June 30, 2022, the Company entered into an Asset Purchase Agreement (“APA”) to sell all of its velusetrag assets to Alfasigma. In connection with the closing of the transaction, Alfasigma acquired, among other things, (i) intellectual property and (ii) books and records related to velusetrag. As consideration for the velusetrag sale, the Company received an upfront payment of $2.8 million in July 2022, and pursuant to the terms of the APA, the Company is eligible to receive up to $105.0 million in additional future developmental and sales milestones.

At the time of the sale, the velusetrag assets had no remaining book value on the Company’s records, and as of June 30, 2022, all of the velusetrag assets were delivered to Alfasigma. For the three and six months ended June 30, 2022, the Company recognized a net gain of $2.7 million, after transaction costs, related to the sale of velusetrag within “interest income and other income (expense), net” on the consolidated statements of operations.

Cash, Cash Equivalents, and Restricted Cash

6 Months Ended

Jun. 30, 2022

Cash, Cash Equivalents, and Restricted Cash

Cash, Cash Equivalents, and Restricted Cash

5. Cash, Cash Equivalents, and Restricted Cash

The following table provides a reconciliation of cash, cash equivalents, and restricted cash reported within the current period and comparable prior year period condensed consolidated balance sheets that sum to the total of the same such amounts shown on the condensed consolidated statements of cash flows.


	June 30,
(In thousands)	2022		2021
Cash and cash equivalents	$	87,292	$	204,949
Restricted cash		836		833
Total cash, cash equivalents, and restricted cash shown on the condensed consolidated statements of cash flows	$	88,128	$	205,782

The Company maintains restricted cash for certain lease agreements and letters of credit by which the Company has pledged cash and cash equivalents as collateral. Separately, the Company also maintains restricted cash for debt servicing of its 9.5% non-recourse 2035 notes. See “Note 7. Debt” for further information regarding the 9.5% non-recourse 2035 notes. The cash-related amounts reported in the table above exclude the Company’s investments in any short and long-term marketable securities that are reported separately on the condensed consolidated balance sheets.

Investments and Fair Value Measurements

6 Months Ended

Jun. 30, 2022

Investments and Fair Value Measurements

Investments and Fair Value Measurements

6. Investments and Fair Value Measurements

Available-for-Sale Securities

The estimated fair value of marketable securities is based on quoted market prices for these or similar investments obtained from a commercial pricing service. The fair market value of marketable securities classified within Level 1 is based on quoted prices for identical instruments in active markets. The fair value of marketable securities classified within Level 2

is based on quoted prices for similar instruments in active markets; quoted prices for identical or similar instruments in markets that are not active; or model-driven valuations whose inputs are observable or whose significant value drivers are observable. Observable inputs may include benchmark yields, reported trades, broker/dealer quotes, issuer spreads, two-sided markets, benchmark securities, bids, offers and reference data including market research publications.

Available-for-sale securities are summarized below:


		June 30, 2022
				Gross		Gross
		Amortized		Unrealized		Unrealized		Estimated
(In thousands)		Cost		Gains		Losses		Fair Value
US government securities	Level 1	$	13,967	$	—	$	(12)	$	13,955
Corporate notes	Level 2		12,016		—		(20)		11,996
Commercial paper	Level 2		24,599		—		(15)		24,584
Marketable securities			50,582		—		(47)		50,535
Money market funds	Level 1		41,726		—		—		41,726
Total		$	92,308	$	—	$	(47)	$	92,261


		December 31, 2021
				Gross		Gross
		Amortized		Unrealized		Unrealized		Estimated
(In thousands)		Cost		Gains		Losses		Fair Value
US government securities	Level 1	$	29,986	$	—	$	(2)	$	29,984
Corporate notes	Level 2		5,034		—		(2)		5,032
Commercial paper	Level 2		48,490		1		(1)		48,490
Marketable securities			83,510		1		(5)		83,506
Money market funds	Level 1		50,228		—		—		50,228
Total		$	133,738	$	1	$	(5)	$	133,734

As of June 30, 2022, all of the Company’s available-for-sale securities had contractual maturities within six months, and the weighted-average maturity of marketable securities was approximately four months. There were no transfers between Level 1 and Level 2 during the periods presented, and there have been no material changes to the Company’s valuation techniques during the three and six months ended June 30, 2022.

Available-for-sale debt securities with unrealized losses are summarized below:


	June 30, 2022
	Less than 12 Months				Greater than 12 Months				Total
			Gross				Gross				Gross
	Estimated		Unrealized		Estimated		Unrealized		Estimated		Unrealized
(In thousands)	Fair Value		Losses		Fair Value		Losses		Fair Value		Losses
US government securities	$	13,954	$	(12)	$	—	$	—	$	13,954	$	(12)
Corporate notes		11,996		(20)		—		—		11,996		(20)
Commercial paper		19,607		(15)		—		—		19,607		(15)
Total	$	45,557	$	(47)	$	—	$	—	$	45,557	$	(47)


	December 31, 2021
	Less than 12 Months				Greater than 12 Months				Total
			Gross				Gross				Gross
	Estimated		Unrealized		Estimated		Unrealized		Estimated		Unrealized
(In thousands)	Fair Value		Losses		Fair Value		Losses		Fair Value		Losses
US government securities	$	19,991	$	(2)	$	—	$	—	$	19,991	$	(2)
Corporate notes		5,031		(2)		—		—		5,031		(2)
Commercial paper		9,995		(1)		—		—		9,995		(1)
Total	$	35,017	$	(5)	$	—	$	—	$	35,017	$	(5)

The Company invests primarily in high credit quality and short-term maturity debt securities with the intent to hold such securities until maturity at par value. The Company does not intend to sell the investments that are currently in an unrealized loss position, and it is unlikely that it will be required to sell the investments before recovery of their amortized cost basis, which may be at maturity. The Company reviewed its available-for-sale debt securities and determined that there were no credit-related losses to be recognized as of June 30, 2022.

As of June 30, 2022, the Company’s accumulated other comprehensive income (loss) on its condensed consolidated balance sheets consisted of net unrealized gains (losses) on available-for-sale investments. For the three and six months ended June 30, 2022 and 2021, the Company did not sell any marketable securities.

Debt

6 Months Ended

Jun. 30, 2022

Debt

Debt

7. Debt

See “Note 13. Subsequent Events” for information regarding the Company’s steps to repay all of its outstanding debt.

As of June 30, 2022, debt consisted of the following:


	June 30,
(In thousands)	2022
9.5% Non-Recourse 2035 Notes:
Principal amount	$	421,050
Less: 5% retained by the Company		(21,053)
Unamortized debt issuance costs - 9.5% Non-Recourse 2035 Notes		(2,741)
Unamortized debt issuance costs - Modified 9.0% Non-Recourse 2033 Notes		(1,131)
		396,125
3.25% Convertible 2023 Notes:
Principal amount		230,000
Unamortized debt issuance costs		(1,429)
		228,571

Total debt	$	624,696

9.5% Non-Recourse Notes Due 2035

On February 21, 2020, Theravance Biopharma R&D, Inc. (“Theravance R&D”), a wholly-owned subsidiary of the Company, and Triple Royalty Sub II LLC (the “Issuer II” or “Triple II”), a wholly-owned subsidiary of Theravance Biopharma R&D, entered into certain note purchase agreements (“Note Purchase Agreements”) with certain note purchasers (“Note Purchasers”), relating to the private placement by Issuer II of $400.0 million 9.5% Fixed Rate Term Notes due on or before 2035 (the “Non-Recourse 2035 Notes”). Ninety-five percent of the Non-Recourse 2035 Notes were sold to the Note Purchasers pursuant to the Note Purchase Agreements. The remaining 5% of the Non-Recourse 2035 Notes (the “Retained Notes”) were retained by the Company to comply with Regulation RR — Credit Risk Retention (17 C.F.R. Part 246). The Retained Notes were eliminated in the Company’s condensed consolidated financial statements.

The Non-Recourse 2035 Notes were secured by all of Issuer II’s right, title and interest as a holder of certain membership interests (the “Issuer II Class C Units”) in Theravance Respiratory Company, LLC (“TRC”). TRC holds the right to receive upward-tiering royalties ranging from 6.5% to 10% on worldwide net sales of TRELEGY, and, prior to July 20, 2022, the Company held an 85% economic interest in TRC. The Issuer II Class C Units represented 75% of the Company's 85% economic interest, which equated to 63.75% of the economic interests in TRC.

The source of principal and interest payments for the Non-Recourse 2035 Notes were the future royalty payments generated from the TRELEGY program, and as a result, the holders of the Non-Recourse 2035 Notes had no recourse against the Company even if the TRELEGY payments were insufficient to cover the principal and interest payments for the Non-Recourse 2035 Notes. Prior to and including the December 5, 2024 payment date, in the event that the distributions received by the Issuer II from TRC in a quarter were less than the interest accrued for that quarter, the principal amount of the Non-Recourse 2035 Notes increased by the interest shortfall amount for that quarter. While the holders of the Non-Recourse 2035 Notes had no recourse against the Company, the terms of the Non-Recourse 2035 Notes also provided that the Company, at its option, could satisfy the quarterly interest payment obligations by making a capital contribution to the Issuer II.

For the three and six months ended June 30, 2022, $2.7 million and $7.4 million, respectively, of net interest shortfall was added to the Non-Recourse 2035 Notes. As of June 30, 2022, the Non-Recourse 2035 Notes’ issuance-to-date net interest shortfall was $30.7 million and the issuance-to-date net principal paydown was $10.7 million.

The Non-Recourse 2035 Notes were not convertible into Company equity and had no security interest in nor rights under any agreement with GSK. The Non-Recourse 2035 Notes were redeemable by Issuer II on and after February 28, 2022, in whole or in part, at specified redemption premiums. The Non-Recourse 2035 Notes bore an annual interest rate of 9.5%, with interest and principal paid quarterly beginning June 5, 2020.

Issuer II redeemed the Non-Recourse 2035 Notes on July 20, 2022 and none of the Non-Recourse 2035 Notes currently remain outstanding. As of June 30, 2022, the net principal and estimated fair value of the Non-Recourse 2035 Notes were $400.0 million and $380.0 million, respectively. The inputs to determine fair value of the Non-Recourse 2035 Notes are categorized as Level 2 inputs. Level 2 inputs include quoted prices for similar instruments in active markets; quoted prices for identical or similar instruments in markets that are not active; and model-derived valuations whose inputs are observable or whose significant value drivers are observable.

3.25% Convertible Senior Notes Due 2023

The Company had $230.0 million of 3.25% convertible senior notes due in 2023 (“Convertible Senior 2023 Notes”) outstanding as of June 30, 2022. For each of the three and six months ended June 30, 2022 and 2021, the Company recognized $1.9 million and $3.7 million, respectively, in contractual interest expense related to the Convertible Senior 2023 Notes. For each of the three and six months ended June 30, 2022 and 2021, the Company recognized $0.3 million and $0.5 million, respectively, in amortization of debt issuance costs related to the Convertible Senior 2023 Notes. As of June 30, 2022, the Convertible Senior 2023 Notes had an estimated fair value of $210.5 million. The estimated fair value was primarily based upon the underlying price of Theravance Biopharma’s publicly traded shares and other observable inputs as of June 30, 2022. The inputs to determine fair value of the Convertible Senior 2023 Notes are categorized as Level 2 inputs. Level 2 inputs include quoted prices for similar instruments in active markets; quoted prices for identical or similar instruments in markets that are not active; and model-derived valuations whose inputs are observable or whose significant value drivers are observable.

- Definition

The entire disclosure for information about short-term and long-term debt arrangements, which includes amounts of borrowings under each line of credit, note payable, commercial paper issue, bonds indenture, debenture issue, own-share lending arrangements and any other contractual agreement to repay funds, and about the underlying arrangements, rationale for a classification as long-term, including repayment terms, interest rates, collateral provided, restrictions on use of assets and activities, whether or not in compliance with debt covenants, and other matters important to users of the financial statements, such as the effects of refinancing and noncompliance with debt covenants.

+ References

Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 470
-URI http://asc.fasb.org/topic&trid=2208564

Reference 2: http://www.xbrl.org/2003/role/disclosureRef
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Reference 8: http://www.xbrl.org/2003/role/disclosureRef
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Reference 9: http://www.xbrl.org/2003/role/disclosureRef
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Reference 12: http://www.xbrl.org/2003/role/disclosureRef
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+ Details

Leases

6 Months Ended

Jun. 30, 2022

Leases

Leases

8. Leases

Dublin Lease

In April 2017, the Company leased approximately 6,100 square feet of office space in Dublin, Ireland, under a non-cancelable operating lease that expires in April 2027 (“Dublin Lease”). In May 2022, the Company entered into an agreement under which it assigned the Dublin Lease (“Lease Assignment”) to an unaffiliated company. The Company determined that the Lease Assignment would be accounted for as a lease modification under ASC 842, Leases. As a result of the lease modification, the Company reduced the value of its operating lease assets and liabilities in the consolidated balance sheets by $1.4 million and $1.5 million, respectively. Under the Lease Assignment, the Company sold furniture and equipment located in the Dublin office to the unaffiliated company and recognized a net loss of $0.1 million from the sale.

Following the completion of the Lease Assignment, in May 2022, the Company entered into a new operating lease agreement for approximately 700 square feet of office space in Dublin, Ireland, effective June 2022. The lease has a two year term ending in May 2024, and the Company may terminate the lease by providing three months prior written notice. Under the new lease, the Company will incur total base rent expense of approximately $0.4 million which is recognized on straight-line basis over the two year lease term.

South San Francisco Sublease

In June 2022, the Company entered into a non-cancelable agreement under which it subleased approximately 78,000 square feet of its South San Francisco office and laboratory space to an unaffiliated company. The sublease term continues through May 2030, consistent with the expiration of the Company’s head lease, and the subtenant has no option to extend the sublease. Under the terms of the sublease, the Company is entitled to receive an initial monthly base rent of $0.5 million which will be subject to annual increases of 3%, as well as the subtenant’s proportionate share of the property’s operating expenses. The Company expects to receive a total of $51.8 million in base rent over the sublease term which represents a $13.6 million premium over its proportionate lease payment obligations under the head lease. Under the terms of the head lease, 50% of the sublease premium, equal to $6.8 million, shall be shared with the landlord and 50% shall be retained by the Company. The Company recognizes the sublease income on a straight-line basis over the term of the sublease which is reflected as a reduction of R&D expense and selling, general and administrative expenses in the consolidated statements of operations. No lease modification was deemed to have occurred by entering into the sublease agreement because the Company was not released, either fully or in part, from its obligations under the head lease.

Sublease income related to this sublease agreement, including base rent and certain sublease transaction cost reimbursements from the landlord, was $0.3 million for the three and six months ended June 30, 2022. The following table summarizes the future undiscounted cash inflows relating to the sublease agreement as of June 30, 2022:


(In thousands)
Year ending December 31:
2022	$	3,562
2023		6,509
2024		6,509
2025		6,509
2026		6,509
Thereafter		22,241
Total operating sublease receipts	$	51,839

Theravance Respiratory Company, LLC

6 Months Ended

Jun. 30, 2022

Theravance Respiratory Company, LLC

Theravance Respiratory Company, LLC

9. Theravance Respiratory Company, LLC

See “Note 13. Subsequent Events” for information regarding the Company’s sale of its interest in TRC.

Through the Company’s 85% equity interest in TRC, the Company was entitled to receive an 85% economic interest in any future payments made by GSK under the strategic alliance agreement and under the portion of the collaboration agreement assigned to TRC (net of TRC expenses paid and the amount of cash, if any, expected to be used by TRC pursuant to the TRC LLC Agreement over the next four fiscal quarters). The primary drug program assigned to TRC is Trelegy.

In May 2014, the Company entered into the TRC LLC Agreement with Innoviva, Inc. (“Innoviva”) that governs the operation of TRC. Under the TRC LLC Agreement, Innoviva was the manager of TRC, and the business and affairs of TRC were managed exclusively by the manager, including (i) day to day management of the drug programs in accordance with the applicable GSK agreements; (ii) preparing an annual operating plan for TRC; and (iii) taking all actions necessary to ensure that the formation, structure and operation of TRC complies with applicable law and partner agreements. The Company was responsible for its proportionate share of TRC’s administrative expenses incurred, and communicated to the Company, by Innoviva.

The Company analyzed its ownership, contractual and other interests in TRC to determine if it was a variable-interest entity (“VIE”), whether the Company had a variable interest in TRC and the nature and extent of that

interest. The Company determined that TRC was a VIE. The party with the controlling financial interest, the primary beneficiary, is required to consolidate the entity determined to be a VIE. Therefore, the Company also assessed whether it is the primary beneficiary of TRC based on the power to direct TRC’s activities that most significantly impact TRC’s economic performance and its obligation to absorb TRC’s losses or the right to receive benefits from TRC that could potentially be significant to TRC. Based on the Company’s assessment, the Company determined that it was not the primary beneficiary of TRC, and, as a result, the Company does not consolidate TRC in its condensed consolidated financial statements. The Company’s maximum exposure to loss, as a result of its involvement with TRC, were the amounts recorded in the condensed consolidated balance sheets within “Equity in net assets of TRC, LLC”, as noted below. TRC was recognized in the Company’s condensed consolidated financial statements under the equity method of accounting.

For the three and six months ended June 30, 2022, the Company recognized net royalty income of $28.1 million and $53.2 million, respectively, in the condensed consolidated statements of operations within “Income from investment in TRC, LLC”. These amounts were recorded net of the Company’s share of (i) TRC’s expenses of $0.1 million and $0.3 million for the three and six months ended June 30, 2022, respectively, and (ii) net unrealized losses of $8.1 million and $7.7 million for the three and six months ended June 30, 2022, respectively, which were associated with the estimated fair market value of certain equity investments previously made by TRC.

For the three and six months ended June 30, 2021, the Company recognized net royalty income of $21.9 million and $38.5 million, respectively. These amounts were recorded net of the Company’s share of TRC’s expenses of $0.3 million and $3.1 million for the three and six months ended June 30, 2021 and were primarily comprised of TRC legal and related fees associated with previous arbitration proceedings between Innoviva, as the manager of TRC, and TRC and the Company.

For the three and six months ended June 30, 2022, the Company received $9.5 million and $16.1 million, respectively, from TRC related to TRELEGY royalties. The Company has also recorded $148.3 million as a long-term asset within “Equity in net assets of TRC, LLC” in the condensed consolidated balance sheets, which represented its share of TRC’s net assets.

TRC’s summarized income statement information is presented below:


	Three Months Ended June 30,				Six Months Ended June 30,
(In thousands)	2022		2021		2022		2021
Royalty revenue and gross profit	$	42,720	$	26,386	$	72,029	$	48,470
Income from continuing operations		42,581		26,050		71,693		44,853
Net income		33,091		25,796		62,632		44,116

Share-Based Compensation

6 Months Ended

Jun. 30, 2022

Share-Based Compensation

Share-Based Compensation

10. Share-Based Compensation

Performance-Contingent Awards

The Company periodically grants performance-contingent share-based awards to employees. For the three and six months ended June 30, 2022, the Company recognized $0.1 million and $0.2 million, respectively, of share-based compensation expense related to these types of awards. As of June 30, 2022, there were 305,000 shares of performance-contingent restricted share units (“RSUs”) outstanding that have a maximum remaining share-based compensation expense of $2.5 million with performance expiration dates through December 2025. For the three and six months ended June 30, 2021, the Company recognized $0.1 million and $0.6 million, respectively, of share-based compensation expense related to performance-contingent share-based awards.

Share-Based Compensation Modification Due to Corporate Restructuring

As a result of the Company’s corporate restructuring announcement in September 2021 (see “Note 12. Corporate Restructuring Update”), the Board of Directors’ Compensation Committee approved the acceleration of certain equity awards for employees affected by the restructuring. The Company accounted for this acceleration as a Type III modification (improbable to probable) which resulted in a fair value of $2.5 million, as of the modification date, that was recorded in “Restructuring and related expenses” within the condensed consolidated statements of operations. The total cumulative compensation cost previously recognized for these awards of $0.8 million within “Research and development” and “Selling, general and administrative” through the modification date, was reversed. The acceleration resulted in net incremental share-

based compensation expenses of $0.4 million and $1.7 million for the three and six months ended June 30, 2022, respectively, and impacted approximately 45 terminated employees who met the conditions of the acceleration and departed the Company in the first half of 2022.

Income Taxes

6 Months Ended

Jun. 30, 2022

Income Taxes

Income Taxes

11. Income Taxes

For the three months ended June 30, 2022, the Company recognized an income tax benefit of $5,000, and for the six months ended June 30, 2022, the Company recognized an income tax expense of $0.5 million. The income tax expense for the three months ended June 30, 2022 was primarily attributed to the Company’s estimate of contingent liabilities for uncertain tax positions taken with respect to transfer pricing for the reporting period. No provision for income taxes has been recognized on undistributed earnings of the Company’s foreign subsidiaries as the Company considers such earnings to be indefinitely reinvested.

The Company follows the accounting guidance related to accounting for income taxes which requires that a company reduce its deferred tax assets by a valuation allowance if, based on the weight of available evidence, it is more likely than not that some portion or all of its deferred tax assets will not be realized. As of June 30, 2022, the Company’s deferred tax assets were offset in full by a valuation allowance.

The Company records liabilities related to uncertain tax positions in accordance with the income tax guidance which clarifies the accounting for uncertainty in income taxes recognized in an enterprise’s financial statements by prescribing a minimum recognition threshold and measurement attribute for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. Resolution of one or more of these uncertain tax positions in any period may have a material impact on the results of operations for that period. The Company includes any applicable interest and penalties within the provision for income taxes in the condensed consolidated statements of operations.

The Company was recently under Internal Revenue Service (“IRS”) examination for the tax year ended December 31, 2018. On July 21, 2022, the IRS informed the Company that the examination was completed and no adjustments to its 2018 tax return were necessary.

The Company’s future income tax expense may be affected by such factors as changes in tax laws, its business, regulations, tax rates, interpretation of existing laws or regulations, the impact of accounting for share-based compensation, the impact of accounting for business combinations, its international organization, shifts in the amount of income before tax earned in the US as compared with other regions in the world, and changes in overall levels of income before tax.

- Definition

The entire disclosure for income taxes. Disclosures may include net deferred tax liability or asset recognized in an enterprise's statement of financial position, net change during the year in the total valuation allowance, approximate tax effect of each type of temporary difference and carryforward that gives rise to a significant portion of deferred tax liabilities and deferred tax assets, utilization of a tax carryback, and tax uncertainties information.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 740
-SubTopic 10
-Section 50
-Paragraph 21
-URI http://asc.fasb.org/extlink&oid=121826272&loc=d3e32857-109319

Reference 2: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 740
-SubTopic 10
-Section S99
-Paragraph 2
-Subparagraph (SAB Topic 11.C)
-URI http://asc.fasb.org/extlink&oid=122134291&loc=d3e330215-122817

Reference 3: http://www.xbrl.org/2003/role/disclosureRef
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-Subparagraph (b)
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Reference 9: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 235
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-Section S99
-Paragraph 1
-Subparagraph (SX 210.4-08(h)(2))
-URI http://asc.fasb.org/extlink&oid=120395691&loc=d3e23780-122690

+ Details

Corporate Restructuring Update

6 Months Ended

Jun. 30, 2022

Corporate Restructuring Update

Corporate Restructuring Update

12. Corporate Restructuring Update

On September 15, 2021, the Company announced a strategic update and corporate restructuring (the “Restructuring”) to focus on leveraging its expertise in developing and commercializing respiratory therapeutics. As part of the Restructuring, the Company initiated a reduction in workforce of approximately 75%. Approximately 75% of the total reduction in workforce occurred in November 2021, and the remainder was completed in February 2022.

For the three and six months ended June 30, 2022, the Company incurred Restructuring and related expenses of $1.6 million and $10.9 million, respectively, of which $0.4 million and $5.1 million were related to R&D expenses and $1.2 million and $5.8 million were related to selling, general and administrative expenses, respectively. Of the total $1.6 million recognized for the three months ended June 30, 2022, cash-related expenses were $1.2 million and non-cash expenses were $0.4 million which were primarily related to the modification of equity-based awards for employees affected by the Restructuring and certain related awards for other employees. Of the total $10.9 million recognized for the six months ended June 30, 2022, cash-related expenses were $6.0 million and non-cash expenses were $4.9 million which were also primarily related to the modification of equity-based awards for employees affected by the Restructuring and certain related awards for other employees.

Since the Restructuring announcement in September 2021, the Company has incurred total Restructuring and related expenses of $31.1 million of which $15.7 million was related to R&D expenses and $15.4 million was related to selling,

general and administrative expenses. Of the total $31.1 million, cash-related expenses were $17.6 million and non-cash expenses were $13.5 million, which were primarily related to the modification of equity-based awards.

The Company estimates that it will incur total Restructuring and related expenses of approximately $31.9 million comprised of $17.6 million in cash expenses and $14.3 million in non-cash expenses. These expenses are primarily comprised of severance and other related costs which are being recognized ratably over the future service period. Based on the above estimate, approximately 97% of the total estimated Restructuring and related expenses have been recognized by the Company from September 2021 through June 2022.

Selected information relating to accrued cash-related Restructuring expenses was as follows:


(In thousands)
Balance at December 31, 2021	$	9,550
Net accruals		6,275
Cash paid		(15,233)
Balance at June 30, 2022	$	592

The Company expects to recognize the remaining Restructuring and related expenses of approximately $0.8 million in the third quarter of 2022. The remaining Restructuring and related expense estimate is comprised of non-cash expenses and is subject to a number of assumptions, and the actual amount may differ. We may also incur additional costs not currently contemplated due to events that may occur as a result of, or that are associated with, the Restructuring.

The Company also evaluated the impact of the Restructuring on the carrying value of its long-lived assets, such as property and equipment and operating lease assets. This process included evaluating the estimated remaining lives, significant changes in the use, and potential impairment charges related to its long-lived assets. Based on its evaluation, the Company determined that its long-lived assets were not impaired as of June 30, 2022, and it has not recognized any impairment charges related to its long-lived assets since the Restructuring announcement.

Subsequent Events

6 Months Ended

Jun. 30, 2022

Subsequent Events

Subsequent Events

13. Subsequent Events

Sale of Theravance Respiratory Company, LLC

On July 20, 2022, the Company completed the sale of its 2,125 Class B Units and 6,375 Class C Units (collectively, the “Issuer II Class C Units”) of TRC to Royalty Pharma Investments 2019 ICAV, an Irish collective asset-management vehicle (“Royalty Pharma”), pursuant to the Equity Purchase and Funding Agreement, dated as of July 13, 2022 (including the schedules and exhibits thereto, the “Purchase Agreement”), by and between the Company and Royalty Pharma (collectively with the other transactions contemplated by the Purchase Agreement, the “Transaction”). The Issuer II Class C Units represent the right to receive 85% of the royalty payments on worldwide net sales of Assigned Collaboration Products (as defined in the Purchase Agreement) pursuant to the terms of that certain Collaboration Agreement, dated as of November 14, 2002, by and between Innoviva, Inc. (formerly known as Theravance, Inc.), a Delaware corporation (“Innoviva”), and Glaxo Group Limited, a private company limited by shares registered under the laws of England and Wales (“GSK”) (as amended, the “Collaboration Agreement”).

At the closing of the sale of the Issuer II Class C Units and the other transactions contemplated by the Purchase Agreement (the “Closing”), the Company received approximately $1.1 billion in cash. From and after January 1, 2023, for any calendar year starting with the year ending December 31, 2023 and ending with the year December 31, 2026, upon certain milestone minimum royalty amounts for the Assigned Collaboration Products being met, Royalty Pharma is obligated to make certain cash payments to the Company (the “Milestone Payments”), which are not to exceed $250.0 million in aggregate. Additionally, the Company will receive from Royalty Pharma 85% of the royalty payments on the Assigned Collaboration Products payable (a) for sales or other activities occurring on and after January 1, 2031 related to the Assigned Collaboration Products in the US, and (b) for sales or other activities occurring on and after July 1, 2029 related to the Assigned Collaboration Products outside of the US.

The Purchase Agreement contains customary representations and warranties of the Company and Royalty Pharma, including with respect to organization, authorization, intellectual property matters and tax matters, and certain covenants

with respect to confidentiality, taxes and actions and conduct relating to preservation of TRC prior to the Closing. The Company and Royalty Pharma will each indemnify the other against damages arising from breaches of representations, warranties and covenants under the Purchase Agreement.

Effective as of the Closing, the Company consented to certain amendments to the Collaboration Agreement and the Extension Agreement, dated as of March 3, 2014, by and between the Company and GSK, as well as the termination of the Master Agreement, dated as of March 3, 2014, by and between Innoviva, the Company and GSK, and further released Innoviva, Innoviva TRC Holdings LLC, a Delaware limited liability company, Royalty Pharma and TRC for claims relating to TRC or the ownership of TRC by the Company or Innoviva prior to the Closing.

Ampreloxetine Funding

In connection with the Transaction, the Company also received an additional $25.0 million in cash in exchange for certain royalty rights to ampreloxetine, and is entitled to receive an additional $15.0 million upon the first regulatory approval of any pharmaceutical product that contains ampreloxetine as an active pharmaceutical ingredient by either (a) the US Food and Drug Administration or (b) the first of (i) the European Medicines Agency or (ii) all four of Germany, France, Italy and Spain. In exchange for the Ampreloxetine Purchase Price, the Company will make quarterly royalty payments to Royalty Pharma equal to the amount of Ampreloxetine Net Sales (as defined in the Purchase Agreement) recognized during the applicable quarter multiplied by 2.5% for the first $500.0 million in Ampreloxetine Net Sales and 4.5% for Ampreloxetine Net Sales in excess of $500.0 million. These royalty payments from the Company to Royalty Pharma will continue until, on a country by country and product by product basis, the later of (a) the expiration of all valid and enforceable claims of any patent, or pending claim of a good faith patent application during the five (5) years from the initial filing of such application, that cover the applicable ampreloxetine product or the manufacture or use thereof in the applicable country and (b) the expiration of regulatory exclusivity granted by the FDA or equivalent organization in the applicable country.

For the three and six months ended June 30, 2022, the Company incurred $3.8 million and $5.1 million, respectively, in legal expenses related to the Transaction.

Repayment of Debt

Immediately after announcing the Transaction, the Company initiated a multi-step process to eliminate its outstanding debt. The first step of the process was the repayment of the Company’s Non-Recourse 2035 Notes for approximately $420.0 million, which was completed on July 20, 2022. On July 26, 2022, the Company initiated the second step of the process by launching a tender offer to retire $230.0 million in principal amount of the Company's 2023 Convertible Senior Notes, at par, that is expected to be completed in August 2022.

Organization and Summary of Significant Accounting Policies (Policies)	6 Months Ended
	Jun. 30, 2022
Organization and Summary of Significant Accounting Policies.
Basis of Presentation	Basis of Presentation The Company’s condensed consolidated financial information as of June 30, 2022 and for the three and six months ended June 30, 2022 and 2021 is unaudited but includes all adjustments (consisting only of normal recurring adjustments), which are considered necessary for a fair presentation of the financial position at such date and of the operating results and cash flows for those periods, and have been prepared in accordance with United States (“US”) generally accepted accounting principles (“GAAP”) for interim financial information. Accordingly, they do not include all of the information and notes required by GAAP for complete financial statements. The accompanying unaudited condensed consolidated financial statements should be read in conjunction with the audited consolidated December 31, 2021 financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2021, filed with the Securities and Exchange Commission (“SEC”) on February 28, 2022. The results for the three and six months ended June 30, 2022 are not necessarily indicative of the results to be expected for the year ending December 31, 2022, or for any other interim period or for any future period. These condensed consolidated financial statements include the accounts of the Company and its subsidiaries, and intercompany transactions and balances have been eliminated.
Use of Estimates	Use of Estimates The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses, and related disclosures in the condensed consolidated financial statements and accompanying notes. Management bases its estimates on historical experience and on assumptions believed to be reasonable under the circumstances. Actual results could differ materially from those estimates.
Significant Accounting Policies	Significant Accounting Policies There have been no material revisions in the Company’s significant accounting policies described in Note 1 to the consolidated financial statements included in its Annual Report on Form 10-K for the year ended December 31, 2021.
Recently Adopted Accounting Pronouncements and Recently Issued Accounting Pronouncements Not Yet Adopted	Recently Adopted Accounting Pronouncements In August 2020, the FASB issued ASU 2020-06, Debt - Debt with Conversion and other Options (Subtopic 470-20) and Derivatives and Hedging: Contracts in Entity’s Own Equity (Subtopic 815-40) (“ASU 2020-06”). ASU 2020-06 simplifies the complexity associated with applying GAAP for certain financial instruments with characteristics of liabilities and equity by removing certain accounting models which separate the embedded conversion features from the host contract for convertible instruments. The standard also enhances the consistency of earnings-per-share calculations by requiring that an entity use the if-converted method and that the effect of potential share settlement be included in diluted earnings-per-share calculations. ASU 2020-06 became effective for fiscal years and interim periods within those fiscal years beginning after December 15, 2021. The Company evaluated ASU 2020-06 and determined that its adoption did not have an impact on the Company’s condensed consolidated financial statements and related disclosures. Recently Issued Accounting Pronouncements Not Yet Adopted The Company has evaluated other recently issued accounting pronouncements and does not currently believe that any of these pronouncements will have a material impact on its condensed consolidated financial statements and related disclosures.

Net Loss per Share (Tables)

6 Months Ended

Jun. 30, 2022

Net Loss per Share

Schedule of basic and diluted net loss per share


	Three Months Ended June 30,				Six Months Ended June 30,
(In thousands, except per share data)	2022		2021		2022		2021
Numerator:
Net loss	$	(8,191)	$	(52,405)	$	(34,137)	$	(132,084)
Denominator:
Weighted-average ordinary shares outstanding		76,270		65,669		75,761		65,199
Less: weighted-average ordinary shares subject to forfeiture		—		—		—		(114)
Weighted-average ordinary shares used to compute basic and diluted net loss per share		76,270		65,669		75,761		65,085
Basic and diluted net loss per share	$	(0.11)	$	(0.80)	$	(0.45)	$	(2.03)

Schedule of anti-dilutive securities


	Three Months Ended June 30,		Six Months Ended June 30,
(In thousands)	2022	2021	2022	2021
Share issuances under equity incentive plans and ESPP	5,660	6,228	6,239	8,307
Share issuances upon the conversion of convertible senior notes	6,676	6,676	6,676	6,676
Total	12,336	12,904	12,915	14,983

Revenue (Tables)

6 Months Ended

Jun. 30, 2022

Revenue

Schedule of revenue recognized from collaborative arrangements


	Three Months Ended June 30,				Six Months Ended June 30,
(In thousands)	2022		2021		2022		2021
Viatris collaboration agreement - Amounts receivable from Viatris	$	10,878	$	10,934	$	21,565	$	21,319

Schedule of collaborative amounts were recorded in the Company's condensed consolidated statements of operations


	Three Months Ended June 30,				Six Months Ended June 30,
(In thousands)	2022		2021		2022		2021
Alfasigma	$	166	$	3	$	169	$	7
Viatris		6		6		12		12
Janssen		—		1,971		—		5,833
Total collaboration revenue	$	172	$	1,980	$	181	$	5,852

Summary of the reductions to R&D costs related to reimbursement payments


	Three Months Ended June 30,				Six Months Ended June 30,
(In thousands)	2022		2021		2022		2021
Viatris	$	1,543	$	67	$	3,079	$	161
Janssen		—		1,193		—		2,525
Total reduction to R&D expense, net	$	1,543	$	1,260	$	3,079	$	2,686

Cash, Cash Equivalents, and Restricted Cash (Tables)

6 Months Ended

Jun. 30, 2022

Cash, Cash Equivalents, and Restricted Cash

Schedule of reconciliation of cash, cash equivalents, and restricted cash


	June 30,
(In thousands)	2022		2021
Cash and cash equivalents	$	87,292	$	204,949
Restricted cash		836		833
Total cash, cash equivalents, and restricted cash shown on the condensed consolidated statements of cash flows	$	88,128	$	205,782

Investments and Fair Value Measurements (Tables)

6 Months Ended

Jun. 30, 2022

Investments and Fair Value Measurements

Schedule of available-for-sale securities


		June 30, 2022
				Gross		Gross
		Amortized		Unrealized		Unrealized		Estimated
(In thousands)		Cost		Gains		Losses		Fair Value
US government securities	Level 1	$	13,967	$	—	$	(12)	$	13,955
Corporate notes	Level 2		12,016		—		(20)		11,996
Commercial paper	Level 2		24,599		—		(15)		24,584
Marketable securities			50,582		—		(47)		50,535
Money market funds	Level 1		41,726		—		—		41,726
Total		$	92,308	$	—	$	(47)	$	92,261


		December 31, 2021
				Gross		Gross
		Amortized		Unrealized		Unrealized		Estimated
(In thousands)		Cost		Gains		Losses		Fair Value
US government securities	Level 1	$	29,986	$	—	$	(2)	$	29,984
Corporate notes	Level 2		5,034		—		(2)		5,032
Commercial paper	Level 2		48,490		1		(1)		48,490
Marketable securities			83,510		1		(5)		83,506
Money market funds	Level 1		50,228		—		—		50,228
Total		$	133,738	$	1	$	(5)	$	133,734

Schedule of Available for sale debt securities with unrealized losses


	June 30, 2022
	Less than 12 Months				Greater than 12 Months				Total
			Gross				Gross				Gross
	Estimated		Unrealized		Estimated		Unrealized		Estimated		Unrealized
(In thousands)	Fair Value		Losses		Fair Value		Losses		Fair Value		Losses
US government securities	$	13,954	$	(12)	$	—	$	—	$	13,954	$	(12)
Corporate notes		11,996		(20)		—		—		11,996		(20)
Commercial paper		19,607		(15)		—		—		19,607		(15)
Total	$	45,557	$	(47)	$	—	$	—	$	45,557	$	(47)


	December 31, 2021
	Less than 12 Months				Greater than 12 Months				Total
			Gross				Gross				Gross
	Estimated		Unrealized		Estimated		Unrealized		Estimated		Unrealized
(In thousands)	Fair Value		Losses		Fair Value		Losses		Fair Value		Losses
US government securities	$	19,991	$	(2)	$	—	$	—	$	19,991	$	(2)
Corporate notes		5,031		(2)		—		—		5,031		(2)
Commercial paper		9,995		(1)		—		—		9,995		(1)
Total	$	35,017	$	(5)	$	—	$	—	$	35,017	$	(5)

Debt (Tables)

6 Months Ended

Jun. 30, 2022

Debt

Schedule of debt


	June 30,
(In thousands)	2022
9.5% Non-Recourse 2035 Notes:
Principal amount	$	421,050
Less: 5% retained by the Company		(21,053)
Unamortized debt issuance costs - 9.5% Non-Recourse 2035 Notes		(2,741)
Unamortized debt issuance costs - Modified 9.0% Non-Recourse 2033 Notes		(1,131)
		396,125
3.25% Convertible 2023 Notes:
Principal amount		230,000
Unamortized debt issuance costs		(1,429)
		228,571

Total debt	$	624,696

- Definition

Tabular disclosure of long-debt instruments or arrangements, including identification, terms, features, collateral requirements and other information necessary to a fair presentation. These are debt arrangements that originally required repayment more than twelve months after issuance or greater than the normal operating cycle of the entity, if longer.

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+ Details

Leases (Tables)

6 Months Ended

Jun. 30, 2022

Sublease

Lessor, Lease, Description [Line Items]

Schedule of future undiscounted cash inflows relating to sublease agreement


(In thousands)
Year ending December 31:
2022	$	3,562
2023		6,509
2024		6,509
2025		6,509
2026		6,509
Thereafter		22,241
Total operating sublease receipts	$	51,839

Theravance Respiratory Company, LLC (Tables)

6 Months Ended

Jun. 30, 2022

Theravance Respiratory Company, LLC

Summary financial information


	Three Months Ended June 30,				Six Months Ended June 30,
(In thousands)	2022		2021		2022		2021
Royalty revenue and gross profit	$	42,720	$	26,386	$	72,029	$	48,470
Income from continuing operations		42,581		26,050		71,693		44,853
Net income		33,091		25,796		62,632		44,116

Corporate Restructuring Update (Tables)

6 Months Ended

Jun. 30, 2022

Corporate Restructuring Update

Schedule of information related to accrued restructuring, severance costs and one-time termination


(In thousands)
Balance at December 31, 2021	$	9,550
Net accruals		6,275
Cash paid		(15,233)
Balance at June 30, 2022	$	592

Organization and Summary of Significant Accounting Policies (Details) $ in Millions	Jul. 20, 2022 USD ($)	Jun. 30, 2022	Feb. 21, 2020
Non-Recourse 2035 Notes
Organization and Summary of Significant Accounting Policies
Interest rate (as a percent)		9.50%	9.50%
Non-Recourse 2035 Notes \| Subsequent Events
Organization and Summary of Significant Accounting Policies
Interest rate (as a percent)	9.50%
Repayments of long-term debt	$ 420.0
Royalty Pharma \| Subsequent Events \| Purchase Agreement to Sell Units in Theravance Respiratory Company, LLC
Organization and Summary of Significant Accounting Policies
Percentage of Right to Receive Royalty Transferring	85

Net Loss per Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2022	Jun. 30, 2021	Jun. 30, 2022	Jun. 30, 2021
Numerator:
Net loss	$ (8,191)	$ (52,405)	$ (34,137)	$ (132,084)
Denominator:
Weighted-average ordinary shares outstanding	76,270	65,669	75,761	65,199
Less: weighted-average ordinary shares subject to forfeiture				(114)
Weighted-average shares used to compute basic net loss per share	76,270	65,669	75,761	65,085
Weighted-average shares used to compute diluted net loss per share	76,270	65,669	75,761	65,085
Basic net loss per share	$ (0.11)	$ (0.80)	$ (0.45)	$ (2.03)
Diluted net loss per share	$ (0.11)	$ (0.80)	$ (0.45)	$ (2.03)

- Definition

The amount of net income (loss) for the period per each share of common stock or unit outstanding during the reporting period.

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The amount of net income (loss) for the period available to each share of common stock or common unit outstanding during the reporting period and to each share or unit that would have been outstanding assuming the issuance of common shares or units for all dilutive potential common shares or units outstanding during the reporting period.

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The portion of profit or loss for the period, net of income taxes, which is attributable to the parent.

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+ Details

Net Loss per Share - Anti-dilutive Securities (Details) - shares shares in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2022	Jun. 30, 2021	Jun. 30, 2022	Jun. 30, 2021
Anti-Dilutive Securities
Anti-dilutive securities (in shares)	12,336	12,904	12,915	14,983
Share issuances under equity incentive plans and ESPP
Anti-Dilutive Securities
Anti-dilutive securities (in shares)	5,660	6,228	6,239	8,307
Share issuances upon the conversion of convertible senior notes
Anti-Dilutive Securities
Anti-dilutive securities (in shares)	6,676	6,676	6,676	6,676

Revenue - Viatris Agreement (Details) - USD ($) $ in Thousands	1 Months Ended	3 Months Ended		6 Months Ended
	Feb. 28, 2018	Jun. 30, 2022	Jun. 30, 2021	Jun. 30, 2022	Jun. 30, 2021
Collaborative Arrangements and Co-Promote Agreement
Revenues		$ 11,050	$ 12,914	$ 24,246	$ 27,171
Percentage of profit share				35.00%
Research and development		15,571	51,093	$ 38,824	118,692
Collaborative revenue
Collaborative Arrangements and Co-Promote Agreement
Revenues		172	1,980	181	5,852
Revefenacin Monotherapy (TD-4208)
Collaborative Arrangements and Co-Promote Agreement
Upfront payment receivable				205,000
Revefenacin Monotherapy (TD-4208) \| Success Based Development Regulatory And Sales Milestones
Collaborative Arrangements and Co-Promote Agreement
Upfront payment receivable				17,500
Revefenacin Monotherapy (TD-4208) \| Sales milestones
Collaborative Arrangements and Co-Promote Agreement
Upfront payment receivable				187,500
Future potential combination products
Collaborative Arrangements and Co-Promote Agreement
Upfront payment receivable				52,500
YUPELRI Monotherapy
Collaborative Arrangements and Co-Promote Agreement
Upfront payment receivable				205,000
Collaborative Arrangement
Collaborative Arrangements and Co-Promote Agreement
Revenues		172	1,980
Collaborative Arrangement \| Alfasigma license option
Collaborative Arrangements and Co-Promote Agreement
Revenues		166	3
Collaborative Arrangement \| Collaborative revenue
Collaborative Arrangements and Co-Promote Agreement
Revenues				181	5,852
Collaborative Arrangement \| Collaborative revenue \| Alfasigma license option
Collaborative Arrangements and Co-Promote Agreement
Revenues				169	7
Janssen \| Collaborative Arrangement
Collaborative Arrangements and Co-Promote Agreement
Revenues			1,971
Janssen \| Collaborative Arrangement \| Collaborative revenue
Collaborative Arrangements and Co-Promote Agreement
Revenues					5,833
Janssen \| Development and Commercialization Agreement
Collaborative Arrangements and Co-Promote Agreement
Upfront payment receivable	$ 100,000
Revenue from collaborative arrangements			2,000		5,800
Viatris
Collaborative Arrangements and Co-Promote Agreement
Upfront payment receivable				$ 257,500
Percentage of profit share				65.00%
Viatris \| YUPELRI Monotherapy
Collaborative Arrangements and Co-Promote Agreement
Revenues		$ 17,200	$ 14,600	$ 32,500	$ 27,500
Percentage of profit share		35.00%	35.00%	35.00%	35.00%
Viatris \| Collaborative Arrangement \| Collaborative revenue
Collaborative Arrangements and Co-Promote Agreement
Revenues		$ 10,878	$ 10,934	$ 21,565	$ 21,319
Other \| Collaborative Arrangement
Collaborative Arrangements and Co-Promote Agreement
Revenues		$ 6	$ 6
Other \| Collaborative Arrangement \| Collaborative revenue
Collaborative Arrangements and Co-Promote Agreement
Revenues				$ 12	$ 12

Revenue - Development and Commercialization Agreement (Details) - USD ($) $ in Thousands	1 Months Ended	3 Months Ended		6 Months Ended		12 Months Ended
	Mar. 31, 2022	Jun. 30, 2022	Jun. 30, 2021	Jun. 30, 2022	Jun. 30, 2021	Dec. 31, 2019	Dec. 31, 2015
Collaborative Arrangements and Co-Promote Agreement
Milestone payment		$ 11,050	$ 12,914	$ 24,246	$ 27,171
Percentage of profit share				35.00%
Collaborative Arrangement
Collaborative Arrangements and Co-Promote Agreement
Milestone payment		172	1,980
Viatris
Collaborative Arrangements and Co-Promote Agreement
Percentage of profit share				65.00%
Viatris \| Revefenacin Monotherapy (TD-4208)
Collaborative Arrangements and Co-Promote Agreement
Initial cash payment							$ 15,000
Transaction price							$ 15,000
Viatris \| YUPELRI Monotherapy
Collaborative Arrangements and Co-Promote Agreement
Milestone payment		$ 17,200	$ 14,600	$ 32,500	$ 27,500
Percentage of profit share		35.00%	35.00%	35.00%	35.00%
Pfizer
Collaborative Arrangements and Co-Promote Agreement
Initial cash payment						$ 10,000
Milestone payment	$ 2,500
Pfizer \| Sales milestones
Collaborative Arrangements and Co-Promote Agreement
Initial cash payment				$ 237,500

Revenue - Reimbursement of R and D Costs (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2022	Jun. 30, 2021	Jun. 30, 2022	Jun. 30, 2021
Research and Development Reimbursement
Total reduction to R and D expense	$ 1,543	$ 1,260	$ 3,079	$ 2,686
Janssen
Research and Development Reimbursement
Total reduction to R and D expense		1,193		2,525
Viatris
Research and Development Reimbursement
Total reduction to R and D expense	$ 1,543	$ 67	$ 3,079	$ 161

Sale of Velusetrag (Details) - Sale of Velusetrag. - Disposed of by Sale - USD ($) $ in Thousands	3 Months Ended	6 Months Ended
	Jun. 30, 2022	Jun. 30, 2022	Jul. 31, 2022
Sale of Velusetrag
Remaining book value of assets	$ 0	$ 0
Gain on sale of velusetrag assets	2,700	2,700
Maximum
Sale of Velusetrag
Future developmental and sales milestones	$ 105,000	$ 105,000
Subsequent Events
Sale of Velusetrag
Consideration from sale of velusetrag assets			$ 2,800

Cash, Cash Equivalents, and Restricted Cash (Details) - USD ($) $ in Thousands	Jun. 30, 2022	Dec. 31, 2021	Jun. 30, 2021	Dec. 31, 2020
Cash and cash equivalents	$ 87,292	$ 89,959	$ 204,949
Restricted cash	836		833
Total cash, cash equivalents, and restricted cash shown on the condensed consolidated statements of cash flows	$ 88,128	$ 90,796	$ 205,782	$ 82,300
9.5% non-recourse notes due 2035
Interest rate (as a percent)	9.50%

Investments and Fair Value Measurements - Available-for-sale securities (Details) - USD ($) $ in Thousands	Jun. 30, 2022	Dec. 31, 2021
Available for sale securities:
Amortized Cost	$ 92,308	$ 133,738
Gross Unrealized Gains		1
Gross Unrealized Losses	(47)	(5)
Estimated Fair Value	92,261	133,734
Debt Securities, Available-for-sale, Unrealized Gain (Loss) [Abstract]
Estimated Fair Value lesser than 12 months	45,557	35,017
Estimated Fair Value Total	45,557	35,017
Gross unrealized lesser than 12 months	(47)	(5)
Gross unrealized loss, Total	(47)	(5)
Marketable securities
Available for sale securities:
Amortized Cost	50,582	83,510
Gross Unrealized Gains		1
Gross Unrealized Losses	(47)	(5)
Estimated Fair Value	50,535	83,506
U.S. government securities
Debt Securities, Available-for-sale, Unrealized Gain (Loss) [Abstract]
Estimated Fair Value lesser than 12 months	13,954	19,991
Estimated Fair Value Total	13,954	19,991
Gross unrealized lesser than 12 months	(12)	(2)
Gross unrealized loss, Total	(12)	(2)
U.S. government securities \| Quoted Prices in Active Markets for Identical Assets, Level 1
Available for sale securities:
Amortized Cost	13,967	29,986
Gross Unrealized Losses	(12)	(2)
Estimated Fair Value	13,955	29,984
U.S. corporate notes
Debt Securities, Available-for-sale, Unrealized Gain (Loss) [Abstract]
Estimated Fair Value lesser than 12 months	11,996	5,031
Estimated Fair Value Total	11,996	5,031
Gross unrealized lesser than 12 months	(20)	(2)
Gross unrealized loss, Total	(20)	(2)
U.S. corporate notes \| Significant Other Observable Inputs, Level 2
Available for sale securities:
Amortized Cost	12,016	5,034
Gross Unrealized Losses	(20)	(2)
Estimated Fair Value	11,996	5,032
U.S. commercial paper
Debt Securities, Available-for-sale, Unrealized Gain (Loss) [Abstract]
Estimated Fair Value lesser than 12 months	19,607	9,995
Estimated Fair Value Total	19,607	9,995
Gross unrealized lesser than 12 months	(15)	(1)
Gross unrealized loss, Total	(15)	(1)
U.S. commercial paper \| Significant Other Observable Inputs, Level 2
Available for sale securities:
Amortized Cost	24,599	48,490
Gross Unrealized Gains		1
Gross Unrealized Losses	(15)	(1)
Estimated Fair Value	24,584	48,490
Money market funds \| Quoted Prices in Active Markets for Identical Assets, Level 1
Available for sale securities:
Amortized Cost	41,726	50,228
Estimated Fair Value	$ 41,726	$ 50,228

Investments and Fair Value Measurements - Convertible senior notes (Details) $ in Thousands	6 Months Ended
	Jun. 30, 2022 USD ($)
Maturity period for marketable securities
Maximum contractual maturity period	6 months
Weighted average contractual maturity period	4 months
Fair value transfers
Fair value of assets transferred from Level 1 to Level 2	$ 0
Fair value of assets transferred from Level 2 to Level 1	0
Unrealized losses
Net unrealized losses	$ 0

Debt (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
Debt (Details) - USD ($) $ in Thousands	Jun. 30, 2022	Jun. 30, 2021	Jun. 30, 2022	Jun. 30, 2021	Feb. 21, 2020
Debt Instrument [Line Items]
Total long-term debt	$ 624,696		$ 624,696
Long-term debt interest expense
Total debt interest expense	11,884	$ 11,612	23,539	$ 23,485
Principal payment on notes				10,730
9.5% Non-Recourse 2035 Notes
Debt Instrument [Line Items]
Principal amount	421,050		421,050		$ 400,000
Less: 5% retained by the Company	(21,053)		(21,053)
Unamortized debt issuance costs	(2,741)		(2,741)
Total long-term debt	$ 396,125		$ 396,125
Long-term debt interest expense
Interest rate (as a percent)	9.50%		9.50%		9.50%
Percentage of note to be sold					95.00%
Percentage of note to be retained					5.00%
Net principal	$ 400,000		$ 400,000
Estimated fair value	380,000		380,000
9.0% Non-Recourse 2033 Notes
Debt Instrument [Line Items]
Unamortized debt issuance costs	(1,131)		(1,131)
Long-term debt interest expense
Total debt interest expense	$ 1,900	$ 300	$ 3,700	$ 500
Interest rate (as a percent)	9.00%		9.00%
3.25% Convertible Senior Notes Due 2023
Debt Instrument [Line Items]
Principal amount	$ 230,000		$ 230,000
Unamortized debt issuance costs	(1,429)		(1,429)
Total long-term debt	$ 228,571		$ 228,571
Long-term debt interest expense
Interest rate (as a percent)	3.25%		3.25%
Notes fair value	$ 210,500		$ 210,500
TRC
Long-term debt interest expense
Percentage of economic interest			85.00%
Net interest shortfall	$ 2,700		$ 7,400
Percentage of equity interest	85.00%		85.00%
Net interest shortfall	$ 30,700		$ 30,700
Net principal paydown	$ 10,700		$ 10,700
TRC \| Minimum
Long-term debt interest expense
Upward tiering royalties (as a percent)			6.50%
TRC \| Maximum
Long-term debt interest expense
Upward tiering royalties (as a percent)			10.00%
TRC \| Issuer II Class C Units
Long-term debt interest expense
Percentage of economic interest			75.00%
Theravance Biopharma R&D, Inc.
Long-term debt interest expense
Percentage of economic interest			63.75%
Theravance Biopharma R&D, Inc. \| 9.5% Non-Recourse 2035 Notes
Long-term debt interest expense
Interest rate (as a percent)	5.00%		5.00%

Leases (Details) $ in Thousands	1 Months Ended		3 Months Ended	6 Months Ended
Leases (Details) $ in Thousands	Jun. 30, 2022 USD ($) ft²	May 31, 2022 USD ($) ft²	Jun. 30, 2022 USD ($) ft²	Jun. 30, 2022 USD ($) ft²	Jun. 30, 2021 USD ($)	Apr. 30, 2017 ft²
Lessee, Lease, Description [Line Items]
Decrease in operating lease liabilities				$ (82)	$ (1,718)
Gain on lease modification				47
Sublease
Lessee, Lease, Description [Line Items]
Expects to receive base rent	$ 51,839		$ 51,839	$ 51,839
Dublin
Lessee, Lease, Description [Line Items]
Area of leased space \| ft²		700				6,100
Decrease in operating lease assets		$ 1,400
Decrease in operating lease liabilities		1,500
Loss on sale of furniture and equipment		100
Operating lease expenses		$ 400
Option to terminate		true
Lease term		2 years
Lease termination notice period		3 months
South San Francisco
Lessee, Lease, Description [Line Items]
Area of subleased property \| ft²	78,000		78,000	78,000
South San Francisco \| Sublease
Lessee, Lease, Description [Line Items]
Option to terminate sublease	false
Monthly base rent	$ 500
Increase in annual base rent (as a percent)	3.00%
Expected sublease income			$ 300	$ 300
Premium component in sublease income	$ 13,600
Percentage of excess sublease income over lease obligations received to be shared with lessor	50.00%
Premium component in sublease income to be shared with lessor	$ 6,800
Percentage of excess sublease income over lease obligations to be retained	50.00%
Expects to receive base rent	$ 51,800		$ 51,800	$ 51,800

Leases - Future Undiscounted Cash Inflows Relating to Sublease Agreement (Details) - Sublease $ in Thousands	Jun. 30, 2022 USD ($)
Future Undiscounted Cash Inflows
2022	$ 3,562
2023	6,509
2024	6,509
2025	6,509
2026	6,509
Thereafter	22,241
Total operating sublease receipts	$ 51,839

Theravance Respiratory Company, LLC (Details) $ in Millions	3 Months Ended		6 Months Ended
Theravance Respiratory Company, LLC (Details) $ in Millions	Jun. 30, 2022 USD ($)	Jun. 30, 2021 USD ($)	Jun. 30, 2022 USD ($) item	Jun. 30, 2021 USD ($)
TRC
Theravance Respiratory Company, LLC
Percentage of equity interest	85.00%		85.00%
Percentage of economic interest			85.00%
Number of fiscal quarters \| item			4
Royalty payments	$ 28.1	$ 21.9	$ 53.2	$ 38.5
Royalty expenses	0.1	$ 0.3	0.3	$ 3.1
Long-term asset	148.3		148.3
Net unrealized loss	8.1		7.7
Payment received	$ 9.5		$ 16.1
NDA Group
Theravance Respiratory Company, LLC
Percentage of equity interest	85.00%		85.00%

Theravance Respiratory Company, LLC - Summary financial information (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2022	Jun. 30, 2021	Jun. 30, 2022	Jun. 30, 2021	Dec. 31, 2021
Summary financial information
Current assets	$ 154,729		$ 154,729		$ 249,870
Current liabilities	32,624		32,624		$ 58,587
Revenues	11,050	$ 12,914	24,246	$ 27,171
Net income	(8,191)	(52,405)	(34,137)	(132,084)
TRC
Summary financial information
Income from continuing operations	42,581	26,050	71,693	44,853
Net income	$ 33,091	25,796	$ 62,632	44,116
Percentage of equity interest	85.00%		85.00%
TRC \| Royalties
Summary financial information
Revenues	$ 42,720	$ 26,386	$ 72,029	$ 48,470

- Definition

Sum of the carrying amounts as of the balance sheet date of all assets that are expected to be realized in cash, sold, or consumed within one year (or the normal operating cycle, if longer). Assets are probable future economic benefits obtained or controlled by an entity as a result of past transactions or events.

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Amount after tax of income (loss) from continuing operations attributable to the parent.

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Total obligations incurred as part of normal operations that are expected to be paid during the following twelve months or within one business cycle, if longer.

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+ Details

- Definition

The portion of profit or loss for the period, net of income taxes, which is attributable to the parent.

+ References

+ Details

- Definition

Amount, excluding tax collected from customer, of revenue from satisfaction of performance obligation by transferring promised good or service to customer. Tax collected from customer is tax assessed by governmental authority that is both imposed on and concurrent with specific revenue-producing transaction, including, but not limited to, sales, use, value added and excise.

+ References

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+ Details

Share-Based Compensation - Performance Contingent Awards (Details) $ in Thousands	1 Months Ended	3 Months Ended		6 Months Ended
	Sep. 30, 2021 USD ($)	Jun. 30, 2022 USD ($)	Jun. 30, 2021 USD ($)	Jun. 30, 2022 USD ($) employee shares	Jun. 30, 2021 USD ($)
Share-Based Compensation
Incremental Share-Based Compensation expense		$ 400		$ 1,700
Cumulative compensation cost	$ 800
Total share-based compensation expense		9,709	$ 14,941	24,254	$ 30,773
Research and development
Share-Based Compensation
Total share-based compensation expense		3,556	7,315	8,086	15,236
Selling, general and administrative
Share-Based Compensation
Total share-based compensation expense		5,794	7,626	$ 11,292	15,537
Restructuring and related expenses
Share-Based Compensation
Incremental Share-Based Compensation expense	$ 2,500
Number of employees reduction in workforce \| employee				45
Total share-based compensation expense		359		$ 4,876
Performance-Contingent Awards - RSUs
Share-Based Compensation
RSUs outstanding (in shares) \| shares				305,000
Performance-Contingent Awards - RSUs.
Share-Based Compensation
Total share-based compensation expense		$ 100	$ 100	$ 200	$ 600
Maximum potential expense \| Performance-Contingent Awards - RSUs.
Share-Based Compensation
Total share-based compensation expense				$ 2,500

Income Taxes - Components of provision for income taxes (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2022	Jun. 30, 2021	Jun. 30, 2022	Jun. 30, 2021
Provision for income tax benefit (expense)
Income tax benefit (expense)	$ 5	$ 220	$ (519)	$ (7)
Provision for income taxes on undistributed earnings of foreign subsidiaries	$ 0		$ 0

- Definition

Amount of current income tax expense (benefit) and deferred income tax expense (benefit) pertaining to continuing operations.

+ References + Details

Corporate Restructuring Update (Details) - USD ($) $ in Thousands			1 Months Ended	3 Months Ended	6 Months Ended	9 Months Ended	10 Months Ended
	Nov. 30, 2021	Sep. 15, 2021	Sep. 30, 2021	Jun. 30, 2022	Jun. 30, 2022	Jun. 30, 2022	Jun. 30, 2022	Sep. 30, 2022
Corporate Restructuring
Reduction in workforce (as a percent)	75.00%	75.00%
Cash expenses related to the costs of employee severance				$ 17,600	$ 17,600	$ 17,600	$ 17,600
Restructuring costs				1,594	10,918		31,100
Non-cash charges related to modification of equity-awards for terminated and remaining employee					$ 14,300
Restructuring and related expenses percentage					97.00%
Forecast
Corporate Restructuring
Cash expenses related to the costs of employee severance								$ 800
Research and development
Corporate Restructuring
Restructuring costs				400	$ 5,100		15,700
Selling, general and administrative
Corporate Restructuring
Restructuring costs			$ 15,400	1,200	5,800	$ 15,400
Severance
Corporate Restructuring
Employee-related separation costs				1,600	10,900
Restructuring costs							31,100
Cash charges related to modification of equity-awards for terminated and remaining employee				1,200	6,000		17,600
Non-cash charges related to modification of equity-awards for terminated and remaining employee				$ 400	4,900		$ 13,500
Minimum
Corporate Restructuring
Employee-related separation costs					$ 31,900

Corporate Restructuring Update - Accrued restructuring, severance costs and one-time termination costs (Details) $ in Thousands	6 Months Ended
	Jun. 30, 2022 USD ($)
Restructuring Reserve [Roll Forward]
Balance at December 31, 2021	$ 9,550
Net accruals	6,275
Cash paid	(15,233)
Balance at March 31, 2022	$ 592

Subsequent Events (Details) - Purchase Agreement to Sell Units in Theravance Respiratory Company, LLC - Royalty Pharma - Subsequent Events $ in Millions	Jul. 20, 2022 USD ($) shares
Subsequent Event [Line Items]
Percentage of Right to Receive Royalty Transferring	85
Proceeds from sale of units. \| $	$ 1,100.0
Consideration Receivable at closing \| $	$ 250.0
Class B Units
Subsequent Event [Line Items]
Units issued \| shares	2,125
Class C Units
Subsequent Event [Line Items]
Units issued \| shares	6,375

Subsequent Events - Ampreloxetine Funding (Details) $ in Thousands		3 Months Ended	6 Months Ended
	Jul. 20, 2022 USD ($)	Jun. 30, 2022 USD ($)	Jun. 30, 2022 USD ($)
Subsequent Event [Line Items]
Legal expenses		$ 3,778	$ 5,057
Ampreloxetine Royalty Rights \| Subsequent Events
Subsequent Event [Line Items]
Consideration Receivable at closing	$ 25,000
Consideration received at the time of first approval	$ 15,000
Patent Application Period	5 years
Ampreloxetine Royalty Rights \| Net Sales Upto First 500 Million \| Subsequent Events
Subsequent Event [Line Items]
Consideration received	$ 500,000
Royalty Payment Percentage Multiplied with Net Sales	2.5
Ampreloxetine Royalty Rights \| Net Sales In Excess of 500 Million \| Subsequent Events
Subsequent Event [Line Items]
Consideration received	$ 500,000
Royalty Payment Percentage Multiplied with Net Sales	4.5

Subsequent Events - Repayment of Debt and Return of Shareholder Capital (Details) - Subsequent Events - USD ($) $ in Millions	Jul. 20, 2022	Jul. 26, 2022
Non-Recourse 2035 Notes
Subsequent Event [Line Items]
Repayments of long-term debt	$ 420.0
3.25% Convertible Senior Notes Due 2023
Subsequent Event [Line Items]
Retirement of debt		$ 230.0