0001558370-23-002595 | 10-K | XBRL Viewer

Sale of Equity Interests in Theravance Respiratory Company, LLC and Discontinued Operations

12 Months Ended

Dec. 31, 2022

Sale of Equity Interests in Theravance Respiratory Company, LLC and Discontinued Operations

Sale of Equity Interests in Theravance Respiratory Company, LLC and Discontinued Operations

9. Sale of Equity Interests in Theravance Respiratory Company, LLC and Discontinued Operations

Background

In May 2014, the Company entered into the TRC LLC Agreement with Innoviva, Inc. (“Innoviva”) that governed the operation of Theravance Respiratory Company, LLC (“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 existing 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 complied with applicable law and partner agreements. The Company was responsible for its proportionate share of TRC’s administrative expenses incurred as communicated to the Company, by Innoviva.

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.

Sale of Equity Interests in TRC

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 Units”) of TRC to, and entered into a sale of future royalties from sales of ampreloxetine (see “Note 10. Ampreloxetine Funding”) with, 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 “TRC Transaction”). The Issuer II 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”). Assigned Collaboration Products is primarily comprised of Trelegy ELLIPTA (“TRELEGY”). Total consideration payable by Royalty Pharma under the terms of the TRC Transaction included initial consideration with a fair value of $1,326.6 million plus the right to receive additional payments as further described below.

At the closing of the TRC Transaction (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 contained 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.

The Company evaluated the TRC Transaction under ASC 860, Transfers and Servicing of Financial Assets, (“ASC 860”) and determined that the future potential Milestone Payments and royalty payments are considered a form of continuing involvement between the Company and Royalty Pharma. The Company further evaluated the TRC Transaction under ASC 860 and concluded that (i) the equity interests in TRC have been isolated from the Company (even in the event of bankruptcy or other receivership); (ii) Royalty Pharma has the right to pledge or exchange the TRC assets it received from the Company without constraint; and (iii) the Company had surrendered control over its equity interests in TRC to Royalty Pharma. Based on the Company’s evaluation under ASC 860, the TRC Transaction was treated as a sale, and the Company recognized a gain from the sale of its equity interests in TRC of $1,141.1 million based on the excess of the total net consideration allocated to the sale of the Company’s equity interests (based on relative fair value) of $1,301.6 million over the carrying value of the equity interests sold of $136.7 million, less transaction costs of $23.8 million. The total net consideration of $1,301.6 million included upfront cash of $1,107.4 million, plus an estimated $194.2 million representing the fair value of the future Milestone Payments and royalties (collectively, “Contingent Consideration”).

The Contingent Consideration was initially measured at fair value utilizing a Monte Carlo simulation model to calculate the present value of the risk-adjusted cash flows estimated to be received from the Contingent Consideration. The discount rate utilized in the valuation model was 7.83%. The fair value model involved significant unobservable inputs derived using management’s estimates. Management’s estimates were based in part on external data and reflected management’s judgements and forecasts. The primary significant unobservable input was the estimate of forecasted TRELEGY net revenues which is considered a Level 3 fair value input. The Company reassesses the carrying value of the Contingent Consideration when indicators of impairment are identified and will recognize any increases in the carrying value of the asset when such contingent gains are realized. As of December 31, 2022, there were no changes in the carrying value of the Contingent Consideration since its initial measurement date in July 2022.

The Contingent Consideration is subject to counterparty credit risk, and the carrying value of the Contingent Consideration represents the maximum amount of potential loss due to credit risk. To date, the Company has not recorded any credit losses related to the Contingent Consideration. The Contingent Consideration is presented on the consolidated balance sheets as future contingent milestone and royalty assets.

Discontinued Operations

The TRC Transaction represented a monetization of a significant equity method investment that had a major effect on the Company’s financial results. In accordance with GAAP, the TRC Transaction was accounted for as a sale of a financial asset. For all periods presented, balances and the results related to TRC have been classified as discontinued operations on the Company’s consolidated financial statements.

The results of discontinued operations consisted of the following:


	Year Ended December 31,
(In thousands)	2022		2021		2020
Income from investments in TRC, LLC	$	53,237	$	103,987	$	68,438
Transaction-related legal expenses (prior to July 20, 2022)		(5,057)		—		—
Interest expense on 9.5% Non-recourse notes due 2035		(21,312)		(38,342)		(32,193)
Interest expense on 9.0% Non-recourse notes due 2033		—		—		(3,975)
Loss on extinguishment of debt		(24,022)		—		(15,464)
Net gain from sale of equity interests in TRC, LLC		1,141,084		—		—
Provision for income tax expense		(178,974)		—		—
Net income from discontinued operations	$	964,956	$	65,645	$	16,806

TRC Financial Information

Prior to the TRC Transaction, 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 was 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 did not consolidate TRC in its consolidated financial statements. The Company’s maximum exposure to loss, as a result of its involvement with TRC, were the amounts recorded in the consolidated balance sheets within “Amounts due from TRC, LLC” and “Equity in net assets of TRC, LLC”. TRC was recognized in the Company’s consolidated financial statements under the equity method of accounting.

For the year ended December 31, 2022, 2021, and 2020, the Company recognized income from its investment in TRC of $53.2 million, $104.0 million, and $68.4 million, respectively. At December 31, 2022 and 2021, the Company had amounts due from TRC of nil and $43.5 million, respectively, and its investment in TRC at those dates was nil and $67.5 million, respectively. As noted above, TRC is being recognized as a discontinued operation as a result of the TRC Transaction.

TRC’s balance sheets as of July 20, 2022 and December 31, 2021 and TRC’s statement of income for the period from January 1, 2022 to July 20, 2022 and for the year ended December 31, 2021 and 2020, including the portion of equity interest that the Company did not own, were as follows:



(In thousands)	July 20, 2022		December 31, 2021
Assets
Cash and cash equivalents	$	29,309	$	50,713
Related party receivables from collaborative arrangements		42,720		42,492
Prepaid expenses and other current assets		—		71
Equity and long-term investments		—		37,695
Total assets	$	72,029	$	130,971

Liabilities and LLC Members' Equity
Accrued liabilities		—		252
LLC members' equity		72,029		130,719
Total liabilities and LLC members' equity	$	72,029	$	130,971


	Period Ended		Year Ended December 31,
(In thousands)	July 20, 2022		2021		2020
Revenue
Royalty revenue from related party	$	72,029	$	126,688	$	73,090
Revenue from collaborative arrangements with a related party		-		—		10,000
Total revenue		72,029		126,688		83,090
General and administrative expenses		332		3,956		2,613
Other income, net		10		—		38
Realized loss on equity and long-term investments		(39,385)
Changes in fair value of equity and long-term investments, net		(8,884)		(1,541)		1,147

Net Income	$	23,438	$	121,191	$	81,662

Subsequent Events	12 Months Ended
Dec. 31, 2022
Subsequent Events
Subsequent Events	18. Subsequent Events On February 27, 2023, the Company announced the following strategic actions: Capital Return Program Increase The Company’s board of directors authorized a $75.0 million increase to the existing $250.0 million capital return program initiated in September 2022, bringing the total capital return program to $325.0 million. As of February 27, 2023, the Company has repurchased $155.3 million of shares, including $27.1 million in 2023, and the Company has approximately $170.0 million remaining in the capital return program which is expected to be completed by the end of 2023. Discontinuing Investments in Research The Company plans to prioritize resource allocation toward the ampreloxetine Phase 3 study and completion of the YUPELRI Peak Inspiratory Flow Rate (PIFR) Phase 4 study and discontinue its research activities including the inhaled Janus kinase (JAK) inhibitor program. As a result of halting further research investment, the Company’s headcount is being reduced by approximately 17% with the reductions planned for completion by the end of March 2023. The Company also plans to seek a partnership to continue progression of its inhaled JAK inhibitor program.

Subsequent Events

12 Months Ended

Dec. 31, 2022

Subsequent Events

Subsequent Events

18. Subsequent Events

On February 27, 2023, the Company announced the following strategic actions:

Capital Return Program Increase

The Company’s board of directors authorized a $75.0 million increase to the existing $250.0 million capital return program initiated in September 2022, bringing the total capital return program to $325.0 million. As of February 27, 2023, the Company has repurchased $155.3 million of shares, including $27.1 million in 2023, and the Company has approximately $170.0 million remaining in the capital return program which is expected to be completed by the end of 2023.

Discontinuing Investments in Research

The Company plans to prioritize resource allocation toward the ampreloxetine Phase 3 study and completion of the YUPELRI Peak Inspiratory Flow Rate (PIFR) Phase 4 study and discontinue its research activities including the inhaled Janus kinase (JAK) inhibitor program. As a result of halting further research investment, the Company’s headcount is being reduced by approximately 17% with the reductions planned for completion by the end of March 2023. The Company also plans to seek a partnership to continue progression of its inhaled JAK inhibitor program.

Leases

12 Months Ended

Dec. 31, 2022

Leases

Leases

8. Leases

South San Francisco Lease and Subleases

As of December 31, 2022, the Company leased approximately 162,000 square feet of office and laboratory space in two buildings in South San Francisco, California, under a non-cancelable operating lease that ends in May 2030 (“SSF Lease”). The lease includes a tenant improvement allowance that expires in November 2024 and had a remaining balance of $8.9 million and $10.2 million, as of December 31, 2022 and 2021, respectively.

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 SSF 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. As part the of the sublease terms, the subtenant was allocated $6.5 million of the Company’s $8.9 million remaining tenant improvement allowance. The Company expects to receive a total of $51.7 million in base rent over the sublease term which represents a $13.5 million premium (before sublease execution-related costs) over its proportionate lease payment obligations under the SSF Lease. Under the terms of the SSF Lease, 50% of the sublease premium, equal to approximately $6.7 million, shall be shared with the landlord and 50% shall be retained by the Company which equates to a base rent savings of approximately $0.8 million annually.

In July 2021, the Company entered into a non-cancelable agreement under which it subleased approximately 21,000 square feet of its South San Francisco office and laboratory space to another unaffiliated company. Under the terms of the sublease agreement, the sublease term continues through September 2028, and the parties have no option to extend the sublease. Either the Company or the subtenant may terminate the sublease by giving the other party ten days prior written notice. The Company is entitled to receive an initial monthly base rent of $0.1 million, with annual base rent increases of 3% and the subtenant’s proportionate share of the building’s operating expenses. The Company expects to receive a total of $13.1 million over the sublease term which represents a $4.2 million premium (before sublease execution-related costs) over its proportionate lease payment obligations under the SSF Lease. Under the terms of the head SSF Lease, 50% of the sublease premium, equal to $2.1 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 its two subleases 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 agreements because the Company was not released, either fully or in part, from its obligations under the SSF Lease.

Sublease income related to the sublease agreements, including base rent and certain sublease transaction cost reimbursements from the landlord, was $5.0 million and $0.5 million for the year ended December 31, 2022 and 2021, respectively.

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, in the second quarter of 2022. 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 execution 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 (or $0.2 million annually) which is recognized on straight-line basis over the two-year lease term. The Company’s annual straight-line base rent for its previous Dublin Lease was approximately $0.4 million.

The Company has evaluated its existing leases and determined that they were all operating leases. The present values of the remaining lease payments and corresponding right-of-use assets were as follows, and the difference between the right-of-use assets and lease liabilities was primarily due to office-related deferred rent payments that are payable in future periods and tenant improvement reimbursements.


(In thousands)	Classification	December 31, 2022		December 31, 2021
Assets
Operating lease assets	Operating lease assets	$	40,126	$	39,690

Liabilities
Current:
Operating lease liabilities	Operating lease liabilities	$	6,753	$	503
Non-current:
Operating lease liabilities	Long-term operating lease liabilities		45,407		52,681
Total operating lease liabilities		$	52,160	$	53,184

Lease expense and sublease income were included within operating expenses in the consolidated statements of operations as follows:


		Year Ended		Year Ended		Year Ended
(In thousands)	Classification	December 31, 2022		December 31, 2021		December 31, 2020
Operating lease expense	Selling, general and administrative expense	$	8,314	$	6,248	$	7,974
Operating lease expense	Research and development expense		—		1,377		758
Total operating lease expense ⁽¹⁾		$	8,314	$	7,625	$	8,732

		Year Ended		Year Ended		Year Ended
(In thousands)	Classification	December 31, 2022		December 31, 2021		December 31, 2020
Operating sublease income	Selling, general and administrative expense	$	5,420	$	466	$	—

(1)	Excludes short-term leases which were not material and office lease service-related charges.

Cash paid for amounts included in the measurement of lease liabilities was as follows:


	Year Ended		Year Ended
(In thousands)	December 31, 2022		December 31, 2021
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	$	9,312	$	8,971

As of December 31, 2022, the maturities of the Company’s lease liabilities were as follows:


(In thousands)
Year ending December 31:
2023	$	9,947
2024		10,623
2025		10,828
2026		11,145
2027		11,479
Thereafter		28,576
Total operating lease payments	$	82,598
Less: Estimated tenant improvement allowance		(8,912)
Less: Imputed interest		(21,526)
Present value of operating lease liabilities	$	52,160

As of December 31, 2022, the undiscounted cash flows to be received related to the Company’s subleases were as follows:


(In thousands)
Year ending December 31:
2023	$	7,713
2024		7,944
2025		8,181
2026		8,425
2027		8,675
Thereafter		18,502
Total operating sublease receipts	$	59,438

As of December 31, 2022, the weighted-average remaining lease term was 7.4 years, and the weighted-average discount rate used to determine the lease liabilities was 8.63%. The Company’s discount rate was primarily derived from the 9.0% interest rate on its previously issued Non-Recourse 2033 Notes in November 2018 and did not involve any significant assumptions.

Sale of Velusetrag	12 Months Ended
Dec. 31, 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 (the “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 all of the velusetrag assets were delivered to Alfasigma. For year ended December 31, 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, net” on the consolidated statements of operations.

Sale of Velusetrag

12 Months Ended

Dec. 31, 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 (the “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 all of the velusetrag assets were delivered to Alfasigma. For year ended December 31, 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, net” on the consolidated statements of operations.

Leases - Maturity of Lease Liabilities and Other Information (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2022	Dec. 31, 2021
Lessee, Lease, Description [Line Items]
2023	$ 9,947
2024	10,623
2025	10,828
2026	11,145
2027	11,479
Thereafter	28,576
Total operating lease payments	82,598
Less: Estimated tenant improvement allowance	(8,912)	$ (10,200)
Less: Imputed interest	(21,526)
Present value of operating lease liabilities	52,160	53,184
Operating cash flows from operating leases	$ 9,312	$ 8,971
Weighted-average remaining lease term (years)	7 years 4 months 24 days
Weighted-average discount rate	8.63%
Sublease
Lessee, Lease, Description [Line Items]
2023	$ 7,713
2024	7,944
2025	8,181
2026	8,425
2027	8,675
Thereafter	18,502
Total operating lease payments	$ 59,438
9.0% Non-Recourse 2033 Notes
Lessee, Lease, Description [Line Items]
Interest rate (as a percent)	9.00%	9.00%

Subsequent Events (Details) $ in Thousands		1 Months Ended	2 Months Ended	6 Months Ended	12 Months Ended
Subsequent Events (Details) $ in Thousands	Feb. 27, 2023 USD ($)	Mar. 31, 2023	Feb. 27, 2023 USD ($)	Feb. 27, 2023 USD ($)	Dec. 31, 2022 USD ($)	Sep. 30, 2022 USD ($)
Subsequent Event [Line Items]
Share repurchase authorized amount						$ 250,000
Aggregate cost					$ 128,830
Subsequent Events
Subsequent Event [Line Items]
Stock Repurchase Program, Additional Authorized Amount	$ 75,000
Share repurchase authorized amount	325,000		$ 325,000	$ 325,000
Aggregate cost			27,100	155,300
Remaining repurchase amount	$ 170,000		$ 170,000	$ 170,000
Percent of Employee Reduction		17

Investments and Fair Value Measurements

12 Months Ended

Dec. 31, 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:


		December 31, 2022
				Gross		Gross
		Amortized		Unrealized		Unrealized		Estimated
(In thousands)		Cost		Gains		Losses		Fair Value
US government securities	Level 1	$	24,873	$	8	$	—	$	24,881
US government agency securities	Level 2		20,869		4		—		20,873
Corporate notes	Level 2		—		—		—		—
Commercial paper	Level 2		37,307		—		(27)		37,280
Marketable securities			83,049		12		(27)		83,034
Money market funds	Level 1		220,508		—		—		220,508
Total		$	303,557	$	12	$	(27)	$	303,542


		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 December 31, 2022, all of the Company’s available-for-sale securities had contractual maturities within three months, and the weighted-average maturity of marketable securities was less than one month. 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 year ended December 31, 2022 or 2021.

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


	December 31, 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
Commercial paper	$	37,279	$	(27)	$	—	$	—	$	37,279	$	(27)
Total	$	37,279	$	(27)	$	—	$	—	$	37,279	$	(27)


	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 December 31, 2022.

As of December 31, 2022, the Company’s accumulated other comprehensive loss on its consolidated balance sheets consisted of net unrealized gains (losses) on available-for-sale investments. For the year ended December 31, 2022 and 2021, the Company did not sell any marketable securities. For the year ended December 31, 2020, the Company sold marketable securities for total proceeds of $19.9 million and recognized minimal net realized gains from the sales based on the specific identification method.

Cash, Cash Equivalents, and Restricted Cash (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2022	Dec. 31, 2021	Dec. 31, 2020	Sep. 30, 2022	Dec. 31, 2019
Cash, Cash Equivalents, and Restricted Cash
Cash and cash equivalents	$ 298,172	$ 89,959	$ 81,467
Restricted cash	836	837	833
Total cash, cash equivalents, and restricted cash shown on the condensed consolidated statements of cash flows	299,008	90,796	82,300		$ 58,897
Share repurchase authorized amount				$ 250,000
Realized and unrealized (loss) gain on foreign currency transactions	$ 900	$ 900	$ 300

SUPPLEMENTARY FINANCIAL DATA (UNAUDITED)

12 Months Ended

Dec. 31, 2022

SUPPLEMENTARY FINANCIAL DATA (UNAUDITED)

SUPPLEMENTARY FINANCIAL DATA (UNAUDITED)

SUPPLEMENTARY FINANCIAL DATA

(UNAUDITED)

(In thousands, except per share data)

The following table presents certain unaudited consolidated quarterly financial information for the eight quarters in the periods ended December 31, 2022 and 2021. This information has been prepared on the same basis as the audited consolidated financial statements and includes all adjustments (consisting only of normal recurring adjustments) necessary to present fairly the unaudited quarterly results of operations set forth herein. For all periods prior to the quarter ended September 30, 2022, the information below has been retroactively adjusted for discontinued operations presentation.


	For the Quarter Ended
	March 31,		June 30,		September 30,		December 31,
2022
Total revenue	$	13,196	$	11,050	$	12,451	$	14,649
Costs and expenses		51,698		37,929		21,595		32,081
Loss from operations		(38,502)		(26,879)		(9,144)		(17,432)
Net loss from continuing operations		(41,538)		(26,570)		(10,460)		(14,256)
Net income from discontinued operations		15,592		18,379		927,091		3,894
Net income (loss)		(25,946)		(8,191)		916,631		(10,362)
Net loss from continuing operations - basic and diluted per share		(0.55)		(0.35)		(0.21)		(0.21)
Net income from discontinued operations - basis and diluted per share		0.21		0.24		12.35		0.06
Net income (loss) - basis and diluted per share	$	(0.34)	$	(0.11)	$	12.14	$	(0.15)

2021
Total revenue	$	14,257	$	12,914	$	13,194	$	14,946
Costs and expenses		98,149		77,024		66,809		71,113
Loss from operations		(83,892)		(64,110)		(53,615)		(56,167)
Net loss from continuing operations		(86,490)		(64,856)		(55,910)		(57,814)
Net income from discontinued operations		6,811		12,451		20,602		25,780
Net loss		(79,679)		(52,405)		(35,308)		(32,034)
Net loss from continuing operations - basic and diluted per share		(1.35)		(0.99)		(0.76)		(0.78)
Net income from discontinued operations - basis and diluted per share		0.11		0.19		0.28		0.35
Net income (loss) - basis and diluted per share	$	(1.24)		(0.80)		(0.48)		(0.43)


Share of Total YUPELRI Net Sales ⁽¹⁾
	For the Quarter Ended
	March 31,		June 30,		September 30,		December 31,
2022	$	15,283	$	17,177	$	18,698	$	19,495
2021	$	12,908	$	14,621	$	13,806	$	15,344

(1)

The Company co-promotes YUPELRI in the US under a profit and loss sharing arrangement with Viatris (65% to Viatris; 35% to Theravance Biopharma). The amounts represent the Company’s implied 35% share of the total net sales of YUPELRI that were recognized within Viatris’ financial statements for the periods presented.

Organization and Summary of Significant Accounting Policies - Net Loss per Share - Anti-dilutive (Details) - shares shares in Thousands	12 Months Ended
	Dec. 31, 2022	Dec. 31, 2021	Dec. 31, 2020
Anti-Dilutive Securities
Anti-dilutive securities (in shares)	5,487	14,145	13,229
Share issuances under equity incentive plans and employee share purchase plans
Anti-Dilutive Securities
Anti-dilutive securities (in shares)	5,487	7,469	6,553
Share issuances upon the conversion of convertible senior notes
Anti-Dilutive Securities
Anti-dilutive securities (in shares)		6,676	6,676

Public Offering of Ordinary Shares

12 Months Ended

Dec. 31, 2022

Public Offering of Ordinary Shares

Public Offering of Ordinary Shares

14. Public Offering of Ordinary Shares

On June 29, 2021, the Company sold 6,700,000 ordinary shares at a price to the public of $15.00 per share. Under the terms of the underwriting agreement, on June 29, 2021, the underwriters also exercised a 30-day option to purchase an additional 1,005,000 ordinary shares for a total of 7,705,000 ordinary shares sold. The total gross proceeds to the Company from the offering were $115.6 million, before deducting underwriting discounts and commissions and offering expenses. The shares sold in this offering were issued pursuant to the Company’s currently effective shelf registration statement on Form S-3 and an accompanying prospectus (File No. 333-235339) filed with the SEC, which became effective automatically on December 3, 2019, and a prospectus supplement filed with the SEC in connection with the offering.

- Definition

The entire disclosure for shareholders' equity comprised of portions attributable to the parent entity and noncontrolling interest, including other comprehensive income. Includes, but is not limited to, balances of common stock, preferred stock, additional paid-in capital, other capital and retained earnings, accumulated balance for each classification of other comprehensive income and amount of comprehensive income.

+ References

Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 505
-URI https://asc.fasb.org/topic&trid=2208762

Reference 2: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 505
-SubTopic 10
-Section 50
-Paragraph 13
-Subparagraph (b)
-URI https://asc.fasb.org/extlink&oid=126973232&loc=SL123496158-112644

Reference 3: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 505
-SubTopic 10
-Section 50
-Paragraph 13
-URI https://asc.fasb.org/extlink&oid=126973232&loc=SL123496158-112644

Reference 4: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 505
-SubTopic 10
-Section 50
-Paragraph 14
-Subparagraph (c)
-URI https://asc.fasb.org/extlink&oid=126973232&loc=SL123496171-112644

Reference 5: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 505
-SubTopic 10
-Section 50
-Paragraph 14
-Subparagraph (b)
-URI https://asc.fasb.org/extlink&oid=126973232&loc=SL123496171-112644

Reference 6: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 505
-SubTopic 10
-Section S99
-Paragraph 1
-Subparagraph (SX 210.3-04)
-URI https://asc.fasb.org/extlink&oid=120397183&loc=d3e187085-122770

Reference 7: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 505
-SubTopic 10
-Section 50
-Paragraph 18
-Subparagraph (d)
-URI https://asc.fasb.org/extlink&oid=126973232&loc=SL123496189-112644

Reference 8: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 505
-SubTopic 10
-Section 50
-Paragraph 13
-Subparagraph (g)
-URI https://asc.fasb.org/extlink&oid=126973232&loc=SL123496158-112644

Reference 9: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 505
-SubTopic 10
-Section 50
-Paragraph 18
-Subparagraph (a)
-URI https://asc.fasb.org/extlink&oid=126973232&loc=SL123496189-112644

Reference 10: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 505
-SubTopic 10
-Section 50
-Paragraph 13
-Subparagraph (h)
-URI https://asc.fasb.org/extlink&oid=126973232&loc=SL123496158-112644

Reference 11: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 505
-SubTopic 10
-Section 50
-Paragraph 14
-Subparagraph (a)
-URI https://asc.fasb.org/extlink&oid=126973232&loc=SL123496171-112644

Reference 12: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 505
-SubTopic 10
-Section 50
-Paragraph 18
-Subparagraph (b)
-URI https://asc.fasb.org/extlink&oid=126973232&loc=SL123496189-112644

Reference 13: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 505
-SubTopic 10
-Section 50
-Paragraph 16
-Subparagraph (b)
-URI https://asc.fasb.org/extlink&oid=126973232&loc=SL123496180-112644

Reference 14: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 505
-SubTopic 10
-Section 50
-Paragraph 13
-Subparagraph (i)
-URI https://asc.fasb.org/extlink&oid=126973232&loc=SL123496158-112644

Reference 15: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 235
-SubTopic 10
-Section S99
-Paragraph 1
-Subparagraph (SX 210.4-08(e)(1))
-URI https://asc.fasb.org/extlink&oid=120395691&loc=d3e23780-122690

Reference 16: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 815
-SubTopic 40
-Section 50
-Paragraph 6
-Subparagraph (a)
-URI https://asc.fasb.org/extlink&oid=126731327&loc=SL126733271-114008

+ Details

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, 2019	$ 1	$ 1,024,614	$ 145	$ (1,248,600)	$ (223,840)
Balances (in shares) at Dec. 31, 2019	57,015
Increase (Decrease) in Stockholders' Equity
Net proceeds from sale of ordinary shares		139,915			139,915
Net proceeds from sale of ordinary shares (in shares)	5,500
Proceeds from ESPP purchases		3,701			3,701
Proceeds from ESPP purchases (in shares)	245
Employee share-based compensation expense		62,976			62,976
Issuance of restricted shares (in shares)	1,907
Option exercises		1,361			1,361
Option exercises (in shares)	68
Repurchase of shares to satisfy tax withholding		(9,749)			(9,749)
Repurchase of shares to satisfy tax withholding (in shares)	(407)
Net unrealized loss on marketable securities			(98)		(98)
Net income (loss)				(278,017)	(278,017)
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		3,466			3,466
Proceeds from ESPP purchases (in shares)	275
Employee share-based compensation expense		62,061			62,061
Issuance of restricted shares (in shares)	2,682
Option exercises		5			5
Repurchase of shares to satisfy tax withholding		(9,061)			(9,061)
Repurchase of shares to satisfy tax withholding (in shares)	(555)
Net unrealized loss on marketable securities			(47)		(47)
Net income (loss)				(199,426)	(199,426)
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
Repurchase of ordinary shares, net of transaction costs		(128,830)			$ (128,830)
Repurchase of ordinary shares, net of transaction costs (in shares)	(12,739)
Proceeds from ESPP purchases		802			802
Proceeds from ESPP purchases (in shares)	118
Employee share-based compensation expense		39,734			39,734
Issuance of restricted shares (in shares)	3,764
Repurchase of shares to satisfy tax withholding		(3,450)			(3,450)
Repurchase of shares to satisfy tax withholding (in shares)	(351)
Net unrealized loss on marketable securities			(15)		(15)
Net income (loss)				872,132	872,132
Balances at Dec. 31, 2022	$ 1	$ 1,295,725	$ (15)	$ (853,911)	$ 441,800
Balances (in shares) at Dec. 31, 2022	65,227				65,227

Share-Based Compensation - Valuation Assumptions (Details) - $ / shares	12 Months Ended
	Dec. 31, 2022	Dec. 31, 2021	Dec. 31, 2020
Stock options
Weighted-average assumptions
Risk-free interest rate, minimum (as a percent)	1.50%	0.50%	0.30%
Risk-free interest rate, maximum (as a percent)	3.80%	1.20%	1.70%
Expected volatility, minimum (as a percent)	55.00%	52.00%	50.00%
Expected volatility, maximum (as a percent)	70.00%	53.00%	53.00%
Weighted-average estimated fair value (in dollars per share)	$ 5.33	$ 9.25	$ 11.03
Minimum \| Stock options
Weighted-average assumptions
Expected term (in years)	5 years 3 months 18 days	5 years 3 months 18 days	5 years 2 months 12 days
Maximum \| Stock options
Weighted-average assumptions
Expected term (in years)	6 years 1 month 6 days	6 years 1 month 6 days	6 years 1 month 6 days
2013 Employee Share Purchase Plan
Weighted-average assumptions
Risk-free interest rate, minimum (as a percent)	1.50%	0.03%	0.10%
Risk-free interest rate, maximum (as a percent)	4.57%	0.20%	0.20%
Expected volatility, minimum (as a percent)	41.00%	40.00%	53.00%
Expected volatility, maximum (as a percent)	72.00%	79.00%	76.00%
Weighted-average estimated fair value (in dollars per share)	$ 3.86	$ 3.52	$ 8.04
2013 Employee Share Purchase Plan \| Minimum
Weighted-average assumptions
Expected term (in years)	6 months	6 months	6 months
2013 Employee Share Purchase Plan \| Maximum
Weighted-average assumptions
Expected term (in years)	2 years	2 years	2 years

Share-Based Compensation - RSU and RSA activity (Details) - RSUs - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2022	Dec. 31, 2021
RSU and RSA activity ( including Performance RSUs and RSAs)
Outstanding at beginning of year	8,353,849
Granted (in shares)	648,065
Released (in shares)	(3,766,876)
Forfeited (in shares)	(1,125,191)
Outstanding at end of year	4,109,847	8,353,849
Additional disclosures
Total estimated fair value of RSUs vested	$ 37.2	$ 49.3

Corporate Restructuring Completion

12 Months Ended

Dec. 31, 2022

Corporate Restructuring Update

Corporate Restructuring Update

16. Corporate Restructuring Completion

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 an approximate 75% reduction in workforce. A majority of the reduction in workforce occurred in November 2021, and the remainder was completed in February 2022.

For the year ended December 31, 2022, the Company incurred Restructuring and related expenses of $12.8 million of which $5.9 million were related to R&D expenses and $6.9 million were related to selling, general and administrative expenses. Of the total $12.8 million recognized for the year ended December 31, 2022, cash-related expenses were $5.8 million and non-cash expenses were $7.0 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.

For the year ended December 31, 2021, the Company incurred Restructuring and related expenses of $20.1 million of which $10.6 million related R&D expenses and $9.5 million related to selling, general and administrative expenses. Of the total $20.1 million, cash-related expenses were $11.5 million and non-cash expenses were $8.6 million

In total, since the Restructuring was announced and through its completion in September 2022, the Company incurred total Restructuring and related expenses of $33.0 million of which $16.5 million was each related to R&D expenses and selling, general and administrative expenses. Of the total $33.0 million, cash-related expenses were $17.4 million and non-cash expenses were $15.6 million. As of December 31, 2022, all Restructuring and related expenses have been fully recognized by the Company.

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


(In thousands)
Balance at December 31, 2021	$	9,550
Net accruals		6,074
Cash paid		(15,624)
Balance at December 31, 2022	$	—

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 a result of the Restructuring, and it has not recognized any impairment charges related to its long-lived assets related to the Restructuring.

Organization and Summary of Significant Accounting Policies - Net Income (Loss) per Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands	3 Months Ended								12 Months Ended
	Dec. 31, 2022	Sep. 30, 2022	Jun. 30, 2022	Mar. 31, 2022	Dec. 31, 2021	Sep. 30, 2021	Jun. 30, 2021	Mar. 31, 2021	Dec. 31, 2022	Dec. 31, 2021	Dec. 31, 2020
Numerator:
Net loss from continuing operations	$ (14,256)	$ (10,460)	$ (26,570)	$ (41,538)	$ (57,814)	$ (55,910)	$ (64,856)	$ (86,490)	$ (92,824)	$ (265,071)	$ (294,823)
Net income from discontinued operations									964,956	65,645	16,806
Net income (loss)	$ (10,362)	$ 916,631	$ (8,191)	$ (25,946)	$ (32,034)	$ (35,308)	$ (52,405)	$ (79,679)	$ 872,132	$ (199,426)	$ (278,017)
Denominator:
Weighted-average ordinary shares outstanding									73,591	69,518	62,808
Less: weighted-average ordinary shares subject to forfeiture										(57)	(463)
Weighted-average ordinary shares outstanding - basic									73,591	69,461	62,345
Weighted-average ordinary shares outstanding - diluted									73,591	69,461	62,345
Continuing operations - basic	$ (0.21)	$ (0.21)	$ (0.35)	$ (0.55)	$ (0.78)	$ (0.76)	$ (0.99)	$ (1.35)	$ (1.26)	$ (3.82)	$ (4.73)
Continuing operations - diluted	(0.21)	(0.21)	(0.35)	(0.55)	(0.78)	(0.76)	(0.99)	(1.35)	(1.26)	(3.82)	(4.73)
Discontinued operations - basic	0.06	12.35	0.24	0.21	0.35	0.28	0.19	0.11	13.11	0.95	0.27
Discontinued operations - diluted	0.06	12.35	0.24	0.21	0.35	0.28	0.19	0.11	13.11	0.95	0.27
Net income (loss) - basis	(0.15)	12.14	(0.11)	(0.34)	(0.43)	(0.48)	(0.80)	(1.24)	11.85	(2.87)	(4.46)
Net income (loss) - diluted	$ (0.15)	$ 12.14	$ (0.11)	$ (0.34)	$ (0.43)	$ (0.48)	$ (0.80)	$ (1.24)	$ 11.85	$ (2.87)	$ (4.46)

Ampreloxetine Funding (Details) $ in Millions		12 Months Ended
Ampreloxetine Funding (Details) $ in Millions	Jul. 20, 2022 USD ($)	Dec. 31, 2022 USD ($)
Ampreloxetine Royalty Rights
Development and Collaboration Agreement
Consideration Receivable at closing	$ 25.0
Consideration received at the time of first approval	$ 15.0
Patent Application Period	5 years
Milestone payments	$ 15.0
Carrying amount of the liability		$ 25.0
Percent of effective interest rate		8.50%
Ampreloxetine Royalty Rights \| Net Sales Upto First 500 Million
Development and Collaboration Agreement
Consideration received	$ 500.0
Royalty Payment Percentage Multiplied with Net Sales	2.5
Ampreloxetine Royalty Rights \| Net Sales In Excess of 500 Million
Development and Collaboration Agreement
Consideration received	$ 500.0
Royalty Payment Percentage Multiplied with Net Sales	4.5
Ampreloxetine Funding
Development and Collaboration Agreement
Consideration Receivable at closing	$ 25.0

Property and Equipment (Tables)

12 Months Ended

Dec. 31, 2022

Property and Equipment.

Schedule of property and equipment


	December 31,
(In thousands)	2022		2021
Computer equipment	$	1,921	$	2,341
Software		1,088		2,063
Furniture and fixtures		1,674		3,605
Laboratory equipment		15,445		20,087
Leasehold improvements		24,583		24,053
Subtotal		44,711		52,149
Less: accumulated depreciation		(32,836)		(38,492)
Property and equipment, net	$	11,875	$	13,657

Extinguishment of Debt (Tables)

12 Months Ended

Dec. 31, 2022

Extinguishment of Debt

Schedule of debt



(In thousands)	2021
9.5% Non-Recourse 2035 Notes:
Principal amount	$	413,291
Less: 5% retained by the Company		(20,665)
Unamortized debt issuance costs - 9.5% Non-Recourse 2035 Notes		(3,062)
Unamortized debt issuance costs - Modified 9.0% Non-Recourse 2033 Notes		(1,265)
		388,299
3.25% Convertible 2023 Notes:
Principal amount		230,000
Unamortized debt issuance costs		(1,965)
		228,035

Total debt	$	616,334

Schedule of debt interest expense


	Year Ended December 31,
(In thousands)	2022		2021		2020
Stated coupon interest	$	4,859	$	7,475	$	7,475
Amortization of debt issuance costs		536		1,072		1,072
Ampreloxetine royalty contingency interest accretion (non-cash)		974		—		—
Total debt interest expense	$	6,369	$	8,547	$	8,547

- 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.

+ References

Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 210
-SubTopic 10
-Section S99
-Paragraph 1
-Subparagraph (SX 210.5-02.22)
-URI https://asc.fasb.org/extlink&oid=120391452&loc=d3e13212-122682

Reference 2: http://www.xbrl.org/2009/role/commonPracticeRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 235
-SubTopic 10
-Section S99
-Paragraph 3
-Subparagraph (SX 210.12-04(a))
-URI https://asc.fasb.org/extlink&oid=120395691&loc=d3e24072-122690

Reference 3: http://fasb.org/us-gaap/role/ref/legacyRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 835
-SubTopic 30
-Section 45
-Paragraph 1A
-URI https://asc.fasb.org/extlink&oid=124435984&loc=d3e28541-108399

Reference 4: http://fasb.org/us-gaap/role/ref/legacyRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 505
-SubTopic 10
-Section 50
-Paragraph 6
-URI https://asc.fasb.org/extlink&oid=126973232&loc=d3e21506-112644

Reference 5: http://www.xbrl.org/2003/role/exampleRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 470
-SubTopic 20
-Section 55
-Paragraph 69B
-URI https://asc.fasb.org/extlink&oid=123466577&loc=SL123495735-112612

Reference 6: http://fasb.org/us-gaap/role/ref/legacyRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 835
-SubTopic 30
-Section 45
-Paragraph 2
-URI https://asc.fasb.org/extlink&oid=124435984&loc=d3e28551-108399

Reference 7: http://www.xbrl.org/2003/role/exampleRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 470
-SubTopic 20
-Section 55
-Paragraph 69E
-URI https://asc.fasb.org/extlink&oid=123466577&loc=SL123495743-112612

Reference 8: http://fasb.org/us-gaap/role/ref/legacyRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 505
-SubTopic 10
-Section 50
-Paragraph 7
-URI https://asc.fasb.org/extlink&oid=126973232&loc=d3e21521-112644

Reference 9: http://fasb.org/us-gaap/role/ref/legacyRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 505
-SubTopic 10
-Section 50
-Paragraph 8
-URI https://asc.fasb.org/extlink&oid=126973232&loc=d3e21538-112644

Reference 10: http://fasb.org/us-gaap/role/ref/legacyRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 942
-SubTopic 470
-Section 50
-Paragraph 3
-URI https://asc.fasb.org/extlink&oid=123599511&loc=d3e64711-112823

Reference 11: http://fasb.org/us-gaap/role/ref/legacyRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 835
-SubTopic 30
-Section 55
-Paragraph 8
-URI https://asc.fasb.org/extlink&oid=114775985&loc=d3e28878-108400

Reference 12: http://fasb.org/us-gaap/role/ref/legacyRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 505
-SubTopic 10
-Section 50
-Paragraph 3
-URI https://asc.fasb.org/extlink&oid=126973232&loc=d3e21475-112644

+ Details

Corporate Restructuring Completion - Accrued restructuring, severance costs and one-time termination costs (Details) $ in Thousands	12 Months Ended
	Dec. 31, 2022 USD ($)
Restructuring Reserve [Roll Forward]
Balance at December 31, 2021	$ 9,550
Net accruals	6,074
Cash paid	$ (15,624)

Income Taxes (Tables)

12 Months Ended

Dec. 31, 2022

Income Taxes

Schedule of components of the income (loss) before income taxes


	Year Ended December 31,
(In thousands)	2022		2021		2020
Income (loss) before provision for income taxes:
Cayman Islands	$	—	$	—	$	37,567
United States		(40,556)		(82,213)		(63,306)
Ireland		(52,168)		(182,775)		(277,105)
United Kingdom		(91)		(234)		(499)
Total	$	(92,815)	$	(265,222)	$	(303,343)

Schedule of the components of provision for income tax (expense) benefit


	Year Ended December 31,
(In thousands)	2022			2021			2020
Provision for income tax (expense) benefit:
Current:
Cayman Islands	$	—		$	—		$	—
United States		—			173			8,545
Ireland		(8)			(8)			(13)
United Kingdom		(1)			(14)			(12)
Subtotal		(9)			151			8,520
Deferred:
Cayman Islands		—			—			—
United States		—			—			—
Ireland		—			—			—
United Kingdom		—			—			—
Subtotal		—			—			—
Total	$	(9)		$	151		$	8,520
Effective tax rate		(0.01)	%		0.06	%		2.81	%

Schedule of the differences between the Irish statutory income tax rate for non-trading income and the Company's effective tax rates


	Year Ended December 31,
	2022		2021		2020
Provision at statutory income tax rate	25.00	%	25.00	%	25.00	%
Foreign rate differential	(6.80)		(8.50)		(11.02)
Share-based compensation	(3.28)		(3.11)		0.71
Non-deductible executive compensation	(2.79)		(1.22)		(0.60)
Uncertain tax positions	(7.10)		(3.95)		(1.19)
Research and development tax credit carryforwards	2.65		1.79		1.73
Intangible asset	—		1.83		9.45
Change in valuation allowance	(1.01)		(11.34)		(20.62)
Other	(6.68)		(0.44)		(0.65)
Effective tax rate	(0.01)	%	0.06	%	2.81	%

Significant components of the Company's deferred tax assets and liabilities


	December 31,
(In thousands)	2022			2021
Deferred tax assets:
Net operating loss carryforwards	$	104,236	$	115,606
Capital loss carryforwards		19,409		19,409
Research and development tax credit carryforwards		16,176		28,372
Fixed assets and intangibles		283,260		287,177
Share-based compensation		4,298		10,432
Accruals		1,795		3,590
Operating lease liabilities		11,239		11,607
Prepaid assets		304		—
Other		30		10,505
Subtotal		440,747		486,698
Valuation allowance		(422,325)		(477,868)
Total deferred tax assets		18,422		8,830

Deferred tax liabilities:
Operating lease assets		(8,634)		(8,575)
Future contingent milestone and royalty assets		(11,725)		—
Prepaid assets		—		(255)
Total deferred tax liabilities		(20,359)		(8,830)
Net deferred tax assets (liabilities)	$	(1,937)	$	—

Reconciliation of unrecognized tax benefits


(In thousands)
Unrecognized tax benefits as of December 31, 2020	$	63,447
Gross decrease in tax positions for prior years		(395)
Gross increase in tax positions for current year		11,971
Unrecognized tax benefits as of December 31, 2021		75,023
Gross decrease in tax positions for prior years		(7,395)
Gross increase in tax positions for current year		8,371
Unrecognized tax benefits as of December 31, 2022	$	75,999

Extinguishment of Debt

12 Months Ended

Dec. 31, 2022

Extinguishment of Debt

Extinguishment of Debt

11. Extinguishment of Debt

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”), 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) and eliminated in the Company’s 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 in TRC. TRC held the right to receive upward-tiering royalties ranging from 6.5% to 10% on worldwide net sales of TRELEGY, and, prior to the closing of the TRC Transaction (see “Note 9. Sale of Equity Interests in Theravance Respiratory Company, LLC and Discontinued Operations”), the Company held an 85% economic interest in TRC. 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.

In connection with the TRC Transaction, the Company redeemed the outstanding Non-Recourse 2035 Notes on July 20, 2022 and paid certain other fees and expenses in conjunction with that redemption. The total repayment was comprised of $400.0 million of net principal, $4.7 million of accrued interest, an early redemption premium fee of $20.0 million, and $0.2 million of transaction costs. The $400.0 million of net principal included $30.7 million of issuance-to-date net interest shortfall. The repayments resulted in a net loss on extinguishment of debt of $24.0 million, which was included within discontinued operations in the accompanying consolidated statements of operations for the year ended December 31, 2022. The loss on extinguishment of debt was calculated as the difference between the carrying amount of the Non-Recourse 2035 Notes and the amounts paid to redeem the Non-Recourse 2035 Notes.

3.25% Convertible Senior Notes Due 2023

In November 2016, the Company completed an underwritten public offering of $230.0 million of 3.25% convertible senior notes, due 2023 (the "Convertible Senior 2023 Notes") for net proceeds of $222.5 million. The Company incurred $7.5 million in debt issuance costs, which were being amortized to interest expense over the estimated life of the Convertible Senior 2023 Notes. The Convertible Senior 2023 Notes bore an annual interest rate of 3.25%, payable semi-annually in arrears, on November 1 and May 1 of each year.

On July 26, 2022, subsequent to the closing of the TRC Transaction, the Company launched a tender offer to retire the Convertible Senior 2023 Notes (the “2023 Notes Tender Offer”). Pursuant to the terms of the 2023 Notes Tender Offer, the Company paid all accrued and unpaid interest on the purchased Convertible Senior 2023 Notes from and including the last interest payment date of May 1, 2022 up to, but not including, the settlement date for the 2023 Notes Tender Offer. The 2023 Notes Tender Offer expired on August 23, 2022 (the “Expiration Time”). As of the Expiration Time, $230.0 million in aggregate principal amount of the Convertible Senior 2023 Notes, representing 100% of the outstanding Convertible Senior 2023 Notes, were validly tendered and not validly withdrawn pursuant to the 2023 Notes Tender Offer. The Company accepted for purchase all of the Convertible Senior 2023 Notes and settled the 2023 Notes Tender Offer on August 25, 2022.

Total payments made by the Company under the 2023 Notes Tender Offer included $230.0 million of principal, $2.4 million of accrued interest, and $1.6 million of transaction costs. The repayments resulted in a net loss on extinguishment of debt of $3.0 million, which is included within “loss on extinguishment of debt” in the accompanying consolidated statements of operations for the year ended December 31, 2022. The loss on extinguishment of debt was calculated as the difference between the carrying amount of the Convertible Senior 2023 Notes and the amounts paid to settle the Convertible Senior 2023 Notes.

As of December 31, 2021, the Company’s debt consisted of the following:



(In thousands)	2021
9.5% Non-Recourse 2035 Notes:
Principal amount	$	413,291
Less: 5% retained by the Company		(20,665)
Unamortized debt issuance costs - 9.5% Non-Recourse 2035 Notes		(3,062)
Unamortized debt issuance costs - Modified 9.0% Non-Recourse 2033 Notes		(1,265)
		388,299
3.25% Convertible 2023 Notes:
Principal amount		230,000
Unamortized debt issuance costs		(1,965)
		228,035

Total debt	$	616,334

Debt interest expense (excluding discontinued operations) consists of the following components:


	Year Ended December 31,
(In thousands)	2022		2021		2020
Stated coupon interest	$	4,859	$	7,475	$	7,475
Amortization of debt issuance costs		536		1,072		1,072
Ampreloxetine royalty contingency interest accretion (non-cash)		974		—		—
Total debt interest expense	$	6,369	$	8,547	$	8,547

As of December 31, 2021, the net principal and estimated fair value of the Non-Recourse 2035 Notes were $392.6 million and $373.0 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.

As of December 31, 2021, the net principal and estimated fair value of the Convertible Senior 2023 Notes were $230.0 million and $220.2 million, respectively. The estimated fair value was primarily based upon the underlying price of Theravance Biopharma’s publicly traded shares and other observable inputs. The inputs to determine fair value of the Convertible Senior 2023 Notes are categorized as Level 2 inputs.

- 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 https://asc.fasb.org/topic&trid=2208564

Reference 2: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 470
-SubTopic 20
-Section 50
-Paragraph 1B
-Subparagraph (h)
-URI https://asc.fasb.org/extlink&oid=123466505&loc=SL123495323-112611

Reference 3: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 470
-SubTopic 20
-Section 50
-Paragraph 1C
-Subparagraph (c)
-URI https://asc.fasb.org/extlink&oid=123466505&loc=SL123495334-112611

Reference 4: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 470
-SubTopic 20
-Section 50
-Paragraph 1I
-Subparagraph (a)
-URI https://asc.fasb.org/extlink&oid=123466505&loc=SL123495371-112611

Reference 5: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 470
-SubTopic 20
-Section 50
-Paragraph 1I
-Subparagraph (d)
-URI https://asc.fasb.org/extlink&oid=123466505&loc=SL123495371-112611

Reference 6: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 235
-SubTopic 10
-Section S99
-Paragraph 1
-Subparagraph (SX 210.4-08(c))
-URI https://asc.fasb.org/extlink&oid=120395691&loc=d3e23780-122690

Reference 7: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 470
-SubTopic 20
-Section 50
-Paragraph 1B
-Subparagraph (g)
-URI https://asc.fasb.org/extlink&oid=123466505&loc=SL123495323-112611

Reference 8: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 470
-SubTopic 20
-Section 50
-Paragraph 1C
-Subparagraph (b)
-URI https://asc.fasb.org/extlink&oid=123466505&loc=SL123495334-112611

Reference 9: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 470
-SubTopic 20
-Section 50
-Paragraph 1C
-Subparagraph (a)
-URI https://asc.fasb.org/extlink&oid=123466505&loc=SL123495334-112611

Reference 10: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 470
-SubTopic 20
-Section 50
-Paragraph 1E
-Subparagraph (b)
-URI https://asc.fasb.org/extlink&oid=123466505&loc=SL123495348-112611

Reference 11: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 470
-SubTopic 20
-Section 50
-Paragraph 1B
-URI https://asc.fasb.org/extlink&oid=123466505&loc=SL123495323-112611

Reference 12: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 470
-SubTopic 20
-Section 50
-Paragraph 1I
-Subparagraph (b)
-URI https://asc.fasb.org/extlink&oid=123466505&loc=SL123495371-112611

Reference 13: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 470
-SubTopic 20
-Section 50
-Paragraph 1B
-Subparagraph (i)
-URI https://asc.fasb.org/extlink&oid=123466505&loc=SL123495323-112611

+ Details

Segment Information

12 Months Ended

Dec. 31, 2022

Segment Information

Segment Information

3. Segment Information

The Company operates in a single segment, which is the discovery (research), development, and commercialization of human therapeutics. The following table summarizes total revenue by geographic region based on the location of the Company’s customers or collaboration partners:


	Year Ended December 31,
(In thousands)	2022		2021		2020
US	$	51,124	$	55,273	$	70,319
Europe		222		38		1,538
Total revenue	$	51,346	$	55,311	$	71,857

The following table summarizes total revenue from each of the Company’s customers or collaboration partners who individually accounted for 10% or more of total revenue (as a percentage of total revenues) during the most recent three years:


	Year Ended December 31,
(% of total revenue)	2022		2021		2020
Viatris	95	%	79	%	63	%
Janssen	—	%	21	%	37	%

- Definition

The entire disclosure for reporting segments including data and tables. Reportable segments include those that meet any of the following quantitative thresholds a) it's reported revenue, including sales to external customers and intersegment sales or transfers is 10 percent or more of the combined revenue, internal and external, of all operating segments b) the absolute amount of its reported profit or loss is 10 percent or more of the greater, in absolute amount of 1) the combined reported profit of all operating segments that did not report a loss or 2) the combined reported loss of all operating segments that did report a loss c) its assets are 10 percent or more of the combined assets of all operating segments.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 31
-URI https://asc.fasb.org/extlink&oid=126901519&loc=d3e8924-108599

Reference 2: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 34
-URI https://asc.fasb.org/extlink&oid=126901519&loc=d3e8981-108599

Reference 3: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 21
-Subparagraph (a)
-URI https://asc.fasb.org/extlink&oid=126901519&loc=d3e8721-108599

Reference 4: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 40
-URI https://asc.fasb.org/extlink&oid=126901519&loc=d3e9031-108599

Reference 5: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 32
-Subparagraph (f)
-URI https://asc.fasb.org/extlink&oid=126901519&loc=d3e8933-108599

Reference 6: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 32
-Subparagraph (e)
-URI https://asc.fasb.org/extlink&oid=126901519&loc=d3e8933-108599

Reference 7: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 26
-URI https://asc.fasb.org/extlink&oid=126901519&loc=d3e8844-108599

Reference 8: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 41
-URI https://asc.fasb.org/extlink&oid=126901519&loc=d3e9038-108599

Reference 9: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 32
-Subparagraph (d)
-URI https://asc.fasb.org/extlink&oid=126901519&loc=d3e8933-108599

Reference 10: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 22
-URI https://asc.fasb.org/extlink&oid=126901519&loc=d3e8736-108599

Reference 11: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 42
-URI https://asc.fasb.org/extlink&oid=126901519&loc=d3e9054-108599

Reference 12: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 15
-URI https://asc.fasb.org/extlink&oid=126901519&loc=d3e8657-108599

Reference 13: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 21
-Subparagraph (b)
-URI https://asc.fasb.org/extlink&oid=126901519&loc=d3e8721-108599

Reference 14: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-URI https://asc.fasb.org/topic&trid=2134510

+ Details

Ampreloxetine Funding

12 Months Ended

Dec. 31, 2022

Ampreloxetine Funding.

Ampreloxetine Funding

10. Ampreloxetine Funding

Under the terms of the Purchase Agreement (see “Note 9. Sale of Equity Interests in Theravance Respiratory Company, LLC and Discontinued Operations”), the Company received $25.0 million in cash from Royalty Pharma 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 FDA or (b) the first of (i) the European Medicines Agency or (ii) all four of Germany, France, Italy and Spain. In exchange for the $25.0 million and potential $15.0 million in cash (the “Ampreloxetine Funding”), 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. As the Ampreloxetine Funding and the TRC Transaction were part of the same Purchase Agreement, the Company evaluated the total consideration received from Royalty Pharma and determined that the consideration received for each of the individual transactions approximated their relative fair values.

The Company accounted for the Ampreloxetine Funding received from Royalty Pharma as a liability because the Company has significant continuing involvement in generating the future revenue stream from which the liability would be repaid to Royalty Pharma. If the regulatory approval milestone is achieved, the Company will recognize the $15.0 million milestone payment as an increase to the accumulated liability. If and when ampreloxetine obtains regulatory approval and is commercially launched, the Company will recognize the royalties paid to Royalty Pharma as a decrease to the accumulated liability due to Royalty Pharma and a corresponding reduction in cash. If ampreloxetine regulatory approval is not achieved or if ampreloxetine sales are never recognized, the liability recognized would be extinguished as the Company would not be obligated to repay any of the funding amounts received from Royalty Pharma.

The carrying amount of the liability for the future royalty payment contingency was based on the upfront $25.0 million received and management's estimate of (i) the risk-adjusted future contingent $15.0 million milestone; and (ii) royalties to be paid to Royalty Pharma and then discounted over the life of the arrangement using an imputed rate of interest. The excess of future estimated royalty payments over the amount of cash funding received will be recognized as interest expense using the effective interest method. The balance associated with the liability was initially recorded as $25.0 million, net of allocated transaction costs, in July 2022 and was reported on the consolidated balance sheets as future royalty payment contingency. The imputed effective rate of interest on the unamortized portion of the liability was 8.5% as of December 31, 2022.

The Company periodically reassesses the amount and timing of estimated royalty payments. To the extent such payments are greater or less than the Company's initial estimates or the timing of such payments is materially different than those estimates, the Company will prospectively adjust the amortization of the liability and the effective interest rate.

There are a number of factors that could materially affect the amount and timing of the contingent $15.0 million milestone and royalty payments, some of which are not within the Company's control. The liability was recognized using significant unobservable inputs. These inputs were derived using internal management estimates and reflect management’s judgements and forecasts. The significant unobservable inputs include the forecasted revenues, the probability and timing of the regulatory milestone, and the expected term of the royalty stream, as well as the overall probability of ampreloxetine’s success. These estimates are considered Level 3 fair value inputs. A significant change in unobservable inputs could result in a material increase or decrease to the effective interest rate of the liability.

Changes to the liability for sale of future royalties were as follows for the year ended December 31, 2022:


(In thousands)
Beginning balance at July 20, 2022	$	—
Consideration allocated, less transaction costs of $0.5 million		24,464
Interest accretion		974
Balance at December 31, 2022	$	25,438

Property and Equipment (Details) - USD ($) $ in Thousands	1 Months Ended	12 Months Ended
Property and Equipment (Details) - USD ($) $ in Thousands	Jan. 31, 2022	Dec. 31, 2022	Dec. 31, 2021	Dec. 31, 2020
Property and Equipment
Property and equipment, gross		$ 44,711	$ 52,149
Less: accumulated depreciation		(32,836)	(38,492)
Property and equipment, net		11,875	13,657
Depreciation expense		2,600	3,500	$ 3,300
Proceeds from the sale of property and equipment		1,866	6	$ 64
Computer equipment
Property and Equipment
Property and equipment, gross		1,921	2,341
Software
Property and Equipment
Property and equipment, gross		1,088	2,063
Furniture and fixtures
Property and Equipment
Property and equipment, gross		1,674	3,605
Laboratory equipment
Property and Equipment
Property and equipment, gross		15,445	20,087
Leasehold improvements
Property and Equipment
Property and equipment, gross		$ 24,583	$ 24,053
Property and equipment
Property and Equipment
Proceeds from the sale of property and equipment	$ 1,900

Leases (Tables)

12 Months Ended

Dec. 31, 2022

Lessor, Lease, Description [Line Items]

Summary of supplemental balance sheet information related to leases


(In thousands)	Classification	December 31, 2022		December 31, 2021
Assets
Operating lease assets	Operating lease assets	$	40,126	$	39,690

Liabilities
Current:
Operating lease liabilities	Operating lease liabilities	$	6,753	$	503
Non-current:
Operating lease liabilities	Long-term operating lease liabilities		45,407		52,681
Total operating lease liabilities		$	52,160	$	53,184

Summary of components of lease expense


		Year Ended		Year Ended		Year Ended
(In thousands)	Classification	December 31, 2022		December 31, 2021		December 31, 2020
Operating lease expense	Selling, general and administrative expense	$	8,314	$	6,248	$	7,974
Operating lease expense	Research and development expense		—		1,377		758
Total operating lease expense ⁽¹⁾		$	8,314	$	7,625	$	8,732

		Year Ended		Year Ended		Year Ended
(In thousands)	Classification	December 31, 2022		December 31, 2021		December 31, 2020
Operating sublease income	Selling, general and administrative expense	$	5,420	$	466	$	—

(1)	Excludes short-term leases which were not material and office lease service-related charges.

Summary of cash information related to leases


	Year Ended		Year Ended
(In thousands)	December 31, 2022		December 31, 2021
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	$	9,312	$	8,971

Summary of maturities of lease liabilities


(In thousands)
Year ending December 31:
2023	$	9,947
2024		10,623
2025		10,828
2026		11,145
2027		11,479
Thereafter		28,576
Total operating lease payments	$	82,598
Less: Estimated tenant improvement allowance		(8,912)
Less: Imputed interest		(21,526)
Present value of operating lease liabilities	$	52,160

Sublease

Lessor, Lease, Description [Line Items]

Summary of maturities of lease liabilities


(In thousands)
Year ending December 31:
2023	$	7,713
2024		7,944
2025		8,181
2026		8,425
2027		8,675
Thereafter		18,502
Total operating sublease receipts	$	59,438

Income Taxes - Uncertain Tax Positions (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2022	Dec. 31, 2021
Gross unrecognized tax benefits
Unrecognized tax benefits at the beginning of the period	$ 75,023	$ 63,447
Gross decrease in tax positions for prior years	(7,395)	(395)
Gross increase in tax positions for current year	8,371	11,971
Unrecognized tax benefits at the end of the period	75,999	75,023
Unrecognized tax benefits	$ 64,191	$ 240

Corporate Restructuring Completion (Details) - USD ($) $ in Thousands		1 Months Ended	12 Months Ended
	Sep. 15, 2021	Sep. 30, 2022	Dec. 31, 2022	Dec. 31, 2021
Corporate Restructuring
Reduction in workforce (as a percent)	75.00%
Restructuring costs		$ 33,000	$ 12,838	$ 20,142
Research and development
Corporate Restructuring
Restructuring costs		16,500	5,900	10,600
Selling, general and administrative
Corporate Restructuring
Restructuring costs		16,500	6,900	9,500
Severance
Corporate Restructuring
Restructuring costs		33,000
Employee-related separation costs			12,800	20,100
Cash charges related to modification of equity-awards for terminated and remaining employee		17,400	5,800	11,500
Non-cash charges related to modification of equity-awards for terminated and remaining employee		$ 15,600	$ 7,000	$ 8,600

Capital Return Program (Details) - USD ($)					1 Months Ended				12 Months Ended
Capital Return Program (Details) - USD ($)	Nov. 22, 2022	Nov. 21, 2022	Sep. 28, 2022	Sep. 20, 2022	Feb. 28, 2023	Jan. 31, 2023	Feb. 28, 2022	Jan. 31, 2022	Dec. 31, 2022	Sep. 30, 2022	Dec. 31, 2021
Capital Return Program
Share repurchase authorized amount										$ 250,000,000.0
Ordinary shares, par value (in dollars per share)									$ 0.00001		$ 0.00001
Consideration for repurchase									$ 128,830,000
Ordinary shares, shares issued									65,227,000		74,435,000
Ordinary shares, shares outstanding									65,227,000		74,435,000
Aggregate cost									$ 128,830,000
GSK Share Repurchase
Capital Return Program
Share repurchase authorized amount										$ 250,000,000.0
Shares authorized to be repurchased (in shares)				9,644,807
Ordinary shares, par value (in dollars per share)				$ 0.00001
Repurchase price (in dollars per share)				$ 9.75
Consideration for repurchase				$ 94,000,000.0
Ordinary shares, shares outstanding				0
Modified Dutch Auction Tender Offer
Capital Return Program
Share repurchase authorized amount			$ 95,000,000.0
Repurchase price (in dollars per share)	$ 10.50
Share repurchase (as a percent)		0.20%
Aggregate cost	$ 1,200,000
Repurchase of ordinary shares (in shares)	115,967	115,967
Modified Dutch Auction Tender Offer \| Minimum
Capital Return Program
Repurchase price (in dollars per share)			$ 9.75
Modified Dutch Auction Tender Offer \| Maximum
Capital Return Program
Repurchase price (in dollars per share)			$ 10.50
Open Market Share Repurchase Plan
Capital Return Program
Repurchase price (in dollars per share)					$ 10.99	$ 10.99			$ 11.06
Aggregate cost					$ 27,100,000	$ 27,100,000			$ 32,900,000
Repurchase of ordinary shares (in shares)							2,461,000	2,461,000	2,978,341

Ampreloxetine Funding (Tables)

12 Months Ended

Dec. 31, 2022

Ampreloxetine Funding.

Schedule of future royalty payment contingencies


(In thousands)
Beginning balance at July 20, 2022	$	—
Consideration allocated, less transaction costs of $0.5 million		24,464
Interest accretion		974
Balance at December 31, 2022	$	25,438

Share-Based Compensation - Performance Contingent Awards (Details) $ in Thousands	12 Months Ended
	Dec. 31, 2022 USD ($) employee shares	Dec. 31, 2021 USD ($) employee	Dec. 31, 2020 USD ($)	Dec. 31, 2016 shares
Share-Based Compensation
Stock-based compensation expense	$ 39,734	$ 62,061	$ 62,976
Incremental Share-Based Compensation expense	1,700
Cumulative compensation cost	800	2,800
Restructuring and related expenses
Share-Based Compensation
Stock-based compensation expense	6,998	8,362
Incremental Share-Based Compensation expense	$ 2,500	$ 5,600
Number of employees reduction in workforce \| employee	40	160
Selling, general and administrative
Share-Based Compensation
Stock-based compensation expense	$ 19,848	$ 28,065	31,682
Research and development
Share-Based Compensation
Stock-based compensation expense	12,888	25,634	31,294
Performance-Contingent Awards - RSAs
Share-Based Compensation
Shares approved for grant (in shares) \| shares				1,575,000
Vesting period				5 years
Total maximum expense	$ 400
Performance-Contingent Awards - RSUs
Share-Based Compensation
RSUs outstanding (in shares) \| shares	43,000
Performance-Contingent Awards - RSUs \| Senior management
Share-Based Compensation
Shares approved for grant (in shares) \| shares				135,000
Performance-Contingent Awards - RSUs.
Share-Based Compensation
Stock-based compensation expense	$ 200	400	1,000
First tranche
Share-Based Compensation
Stock-based compensation expense		$ 400	$ 3,000

Share-Based Compensation - Share Based Compensation Expense By Type (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2022	Dec. 31, 2021	Dec. 31, 2020
Share-Based Compensation
Total share-based compensation expense	$ 39,734	$ 62,061	$ 62,976
Unrecognized compensation cost	43,403
Stock options
Share-Based Compensation
Total share-based compensation expense	2,998	5,473	6,536
Unrecognized compensation cost	$ 3,453
Weighted-average amortization period - years	2 years 9 months
RSUs
Share-Based Compensation
Total share-based compensation expense	$ 35,726	54,931	49,803
Unrecognized compensation cost	$ 39,721
Weighted-average amortization period - years	2 years 6 months
Performance-Contingent Awards - RSAs and RSUs
Share-Based Compensation
Total share-based compensation expense	$ 237	763	3,943
Weighted-average amortization period - years	7 months 20 days
ESPP
Share-Based Compensation
Total share-based compensation expense	$ 773	$ 894	$ 2,694
Unrecognized compensation cost	$ 229
Weighted-average amortization period - years	6 months 3 days

Segment Information (Tables)

12 Months Ended

Dec. 31, 2022

Segment Information

Schedule of total revenue by geographic region


	Year Ended December 31,
(In thousands)	2022		2021		2020
US	$	51,124	$	55,273	$	70,319
Europe		222		38		1,538
Total revenue	$	51,346	$	55,311	$	71,857

Schedule of total revenue from customers or collaboration partners who individually accounted for 10% or more of total revenue


	Year Ended December 31,
(% of total revenue)	2022		2021		2020
Viatris	95	%	79	%	63	%
Janssen	—	%	21	%	37	%

Income Taxes - Components of provision for income tax (expense) benefit (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2022	Dec. 31, 2021	Dec. 31, 2020
Provision for income tax (expense) benefit
Current	$ (9)	$ 151	$ 8,520
Income tax expense	(9)	151	8,520
Income tax expense	179,000
Unrecognized tax benefits	75,999	$ 75,023	$ 63,447
Uncertain tax benefits	$ 76,000
Effective tax rate (as a percent)	(0.01%)	0.06%	2.81%
Provision for income taxes on undistributed earnings of foreign subsidiaries	$ 0
Undistributed earnings	0
United States
Provision for income tax (expense) benefit
Current		$ 173	$ 8,545
Ireland
Provision for income tax (expense) benefit
Current	$ (8)	$ (8)	$ (13)
Effective tax rate (as a percent)	(0.01%)	0.06%	2.81%
United Kingdom
Provision for income tax (expense) benefit
Current	$ (1)	$ (14)	$ (12)

Segment Information - Geographic region (Details) - USD ($) $ in Thousands	3 Months Ended								12 Months Ended
	Dec. 31, 2022	Sep. 30, 2022	Jun. 30, 2022	Mar. 31, 2022	Dec. 31, 2021	Sep. 30, 2021	Jun. 30, 2021	Mar. 31, 2021	Dec. 31, 2022	Dec. 31, 2021	Dec. 31, 2020
Segment Information
Total revenue	$ 14,649	$ 12,451	$ 11,050	$ 13,196	$ 14,946	$ 13,194	$ 12,914	$ 14,257	$ 51,346	$ 55,311	$ 71,857
United States
Segment Information
Total revenue									51,124	55,273	70,319
Europe
Segment Information
Total revenue									$ 222	$ 38	$ 1,538

- 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

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 30
-Subparagraph (a)
-URI https://asc.fasb.org/extlink&oid=126901519&loc=d3e8906-108599

Reference 2: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 40
-URI https://asc.fasb.org/extlink&oid=126901519&loc=d3e9031-108599

Reference 3: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 41
-Subparagraph (a)
-URI https://asc.fasb.org/extlink&oid=126901519&loc=d3e9038-108599

Reference 4: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 32
-Subparagraph (b)
-URI https://asc.fasb.org/extlink&oid=126901519&loc=d3e8933-108599

Reference 5: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 32
-Subparagraph (a)
-URI https://asc.fasb.org/extlink&oid=126901519&loc=d3e8933-108599

Reference 6: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 606
-SubTopic 10
-Section 50
-Paragraph 4
-Subparagraph (a)
-URI https://asc.fasb.org/extlink&oid=126920106&loc=SL49130543-203045

Reference 7: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 22
-Subparagraph (b)
-URI https://asc.fasb.org/extlink&oid=126901519&loc=d3e8736-108599

Reference 8: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 22
-Subparagraph (a)
-URI https://asc.fasb.org/extlink&oid=126901519&loc=d3e8736-108599

Reference 9: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 42
-URI https://asc.fasb.org/extlink&oid=126901519&loc=d3e9054-108599

Reference 10: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 606
-SubTopic 10
-Section 50
-Paragraph 5
-URI https://asc.fasb.org/extlink&oid=126920106&loc=SL49130545-203045

Reference 11: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 924
-SubTopic 10
-Section S99
-Paragraph 1
-Subparagraph (SAB Topic 11.L)
-URI https://asc.fasb.org/extlink&oid=6472922&loc=d3e499488-122856

+ Details

Cash, Cash Equivalents, and Restricted Cash

12 Months Ended

Dec. 31, 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 consolidated balance sheets that sum to the total of the same such amounts shown on the consolidated statements of cash flows.


	December 31,
(In thousands)	2022		2021		2020
Cash and cash equivalents	$	298,172	$	89,959	$	81,467
Restricted cash		836		837		833
Total cash, cash equivalents, and restricted cash shown on the consolidated statements of cash flows	$	299,008	$	90,796	$	82,300

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. The cash-related amounts reported in the table above exclude the Company’s investments in short and long-term marketable securities that are reported separately on the consolidated balance sheets.

The Company periodically engages in foreign exchange transactions as a part of its operations. For the year ended December 31, 2022, 2021, and 2020, the Company recognized net realized and unrealized foreign currency losses of $0.9 million, $0.9 million, and $0.3 million, respectively. These amounts are included in the Company’s consolidated statements of operations within “Interest income and other income, net”.

CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2022	Dec. 31, 2021	Dec. 31, 2020
Operating activities
Net income (loss)	$ 872,132	$ (199,426)	$ (278,017)
Less: Net income from discontinued operations	(964,956)	(65,645)	(16,806)
Net loss from continuing operations	(92,824)	(265,071)	(294,823)
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:
Depreciation and amortization	3,716	4,802	4,707
Amortization and accretion income, net	(681)	10	(1,079)
Ampreloxetine interest accretion	974
Share-based compensation	39,734	62,061	62,976
(Gain) loss on disposal of property and equipment	(8)	39
Gain on sale of Velusetrag	(2,709)
Amortization of right-of-use assets	3,989	3,786	3,344
Gain from lease modification		(1,863)
Loss on extinguishment of debt	3,034
Other		10	(95)
Changes in operating assets and liabilities:
Receivables from collaborative and licensing arrangements	(2,720)	1,803	6,128
Prepaid clinical and development services	8,733	10,129	(17,638)
Other prepaid and current assets	(704)	2,867	(2,327)
Right-of-use lease assets	(4,424)
Other assets	(3,802)	(972)	(1,110)
Accounts payable	(1,612)	(3,534)	3,658
Accrued personnel-related expenses, accrued clinical and development expenses, and other accrued liabilities	(14,086)	(37,225)	5,983
Accrued interest payable	(1,246)
Deferred revenue	(192)	(11,463)	(26,465)
Operating lease liabilities	(1,024)	(1,742)	1,600
Unrecognized tax benefits	63,952	(189)	(8,542)
Other long-term liabilities	(525)	777	936
Net cash used in operating activities - continuing operations	(2,425)	(235,775)	(262,747)
Net cash (used in) provided by operating activities - discontinued operations	(184,566)	27,917	12,344
Net cash used in operating activities	(186,991)	(207,858)	(250,403)
Investing activities
Purchases of property and equipment	(572)	(3,406)	(6,616)
Purchases of marketable securities	(103,145)	(158,305)	(401,987)
Maturities of marketable securities	158,000	286,199	399,318
Sale of short-term investments and marketable securities	17		19,942
Proceeds from the sale of Velusetrag	2,709
Proceeds from the sale of property and equipment	1,866	6	64
Net cash provided by investing activities - continuing operations	58,875	124,494	10,721
Net cash provided by investing activities - discontinued operations	1,095,134
Net cash provided by investing activities	1,154,009	124,494	10,721
Financing activities
Ordinary share repurchases	(128,830)
Proceeds from the sale of ordinary shares, net		108,180	139,915
Proceeds from ampreloxetine funding, net	24,464
Proceed from issuance of 2035 notes			380,000
Proceeds from ESPP purchases	802	3,466	3,701
Proceeds from option exercises		5	1,361
Repurchase of shares to satisfy tax withholding	(3,450)	(9,061)	(9,749)
Net cash (used in) provided by financing activities - continuing operations	(738,617)	91,860	279,881
Net cash used in financing activities - discontinued operations	(20,189)		(16,796)
Net cash (used in) provided by financing activities	(758,806)	91,860	263,085
Net increase in cash, cash equivalents, and restricted cash	208,212	8,496	23,403
Cash, cash equivalents, and restricted cash at beginning of period	90,796	82,300	58,897
Cash, cash equivalents, and restricted cash at end of period	299,008	90,796	82,300
Supplemental disclosure of cash flow information
Cash paid for interest	22,244	39,029	24,024
Cash paid (received) for income taxes, net	117,966	(4,089)	14
2035 notes
Financing activities
Principal payment on notes	(399,998)	$ (10,730)	$ (235,347)
2033 notes
Financing activities
Principal payment on notes	$ (231,605)

Share-Based Compensation (Tables)

12 Months Ended

Dec. 31, 2022

Share-Based Compensation

Schedule of share-based compensation expense included in the consolidated statements of operations


	Year Ended December 31,
(In thousands)	2022		2021		2020
Research and development	$	12,888	$	25,634	$	31,294
Selling, general and administrative		19,848		28,065		31,682
Restructuring and related expenses		6,998		8,362		—
Total share-based compensation expense	$	39,734	$	62,061	$	62,976

Schedule of share-based compensation expense by award type included in the consolidated statements of operations


	Year Ended December 31,
(In thousands)	2022		2021		2020
Options	$	2,998	$	5,473	$	6,536
RSUs		35,726		54,931		49,803
Performance RSAs and RSUs		237		763		3,943
ESPP		773		894		2,694
Total share-based compensation expense	$	39,734	$	62,061	$	62,976

Schedule of unrecognized compensation cost, net of expected forfeitures, and the estimated weighted-average amortization period, using the straight-line attribution method


	Unrecognized		Weighted‑Average
	Compensation		Amortization Period
(In thousands, except amortization period)	Cost		(Years)
Options	$	3,453	2.75
RSUs		39,721	2.50
Performance RSAs and RSUs ⁽¹⁾		—	0.64
ESPP		229	0.51
Total	$	43,403

(1)	Represents unrecognized share-based compensation cost associated with the Company’s performance-contingent awards described above that are probable of vesting.

Summary of option activity under the 2013 EIP and 2014 NEEIP


			Weighted-Average
	Number of Shares	Weighted-Average	Exercise Price of			Aggregate
	Subject to	Remaining Contractual	Outstanding Options			Intrinsic Value
	Outstanding Options	Term (Years)	(in dollars)			(in thousands)
Outstanding at December 31, 2021	2,871,568		$	24.62
Granted	753,400			10.19
Exercised	—			-
Forfeited	(1,213,075)			25.69
Outstanding at December 31, 2022	2,411,893	5.24		19.53	$	775
Exercisable at December 31, 2022		3.69				142
Vested and expected to vest at December 31, 2022		5.24				775


	2022		2021		2020
Weighted average fair value of options (in dollars)	$	5.33	$	9.25	$	11.03
Total intrinsic value of options exercised (in thousands)	$	—	$	1	$	384

Schedule of RSU and RSA activity (including performance RSUs and RSAs)


	Number of Shares	Number of Shares
	Subject to	Outstanding Subject to
	Outstanding RSUs	Performance Conditions (RSAs)
Outstanding at December 31, 2021	8,353,849	—
Granted	648,065	—
Released	(3,766,876)	—
Forfeited	(1,125,191)	—
Outstanding at December 31, 2022	4,109,847	—

Schedule of range of assumptions used to estimate the fair value of share options granted and rights granted


	Year Ended December 31,
	2022		2021		2020
Options
Risk-free interest rate		1.5% - 3.8%		0.5% - 1.2%		0.3% - 1.7%
Expected term (in years)		5.3 - 6.1		5.3 - 6.1		5.2 - 6.1
Volatility		55% - 70%		52% - 53%		50% - 53%
Dividend yield		—		—		—
Weighted-average estimated fair value	$	5.33	$	9.25	$	11.03
2013 ESPP
Risk-free interest rate		1.5% - 4.57%		0.03% - 0.2%		0.1% - 0.2%
Expected term (in years)		0.5 - 2.0		0.5 - 2.0		0.5 - 2.0
Volatility		41% - 72%		40% - 79%		53% - 76%
Dividend yield		—		—		—
Weighted-average estimated fair value	$	3.86	$	3.52	$	8.04

CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares shares in Thousands	Dec. 31, 2022	Dec. 31, 2021
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	65,227	74,435
Ordinary shares, shares outstanding	65,227	74,435

Capital Return Program

12 Months Ended

Dec. 31, 2022

Capital Return Program

Capital Return Program

15. Capital Return Program

In September 2022, the Company’s board of directors authorized a $250.0 million capital return program consisting of three elements as described below.

GSK Share Repurchase

On September 20, 2022, the Company repurchased 9,644,807 ordinary shares, par value $0.00001 per share, of the Company from GSK Finance (No.3) plc (“GSK Finance”), representing all of the ordinary shares of the Company owned by GSK Finance or its affiliates. The purchase price under the Share Repurchase Agreement was $9.75 per share, resulting in a total consideration of $94.0 million. The repurchased shares were accounted for as authorized shares that are no longer issued and outstanding upon the settlement date of the repurchase transaction.

Modified Dutch Auction Tender Offer

On September 28, 2022, the Company announced a “modified Dutch auction” tender offer (the “Offer”) to purchase up to $95.0 million of its ordinary shares. Upon the terms and subject to the conditions set forth in the Company's Offer to Purchase, dated September 28, 2022 (the "Offer to Purchase"), and the related Letter of Transmittal, the Company offered to purchase up to $95.0 million of its ordinary shares, at a purchase price not greater than $10.50 nor less than $9.75 per share, in cash, less any applicable withholding taxes and without interest. The Offer expired at midnight, New York City time, at the end of the day on November 17, 2022.

A "modified Dutch auction" tender offer allows shareholders to indicate how many shares and at what price or within the range described above they wish to tender their shares. Based on the number of shares tendered and the prices specified by the tendering shareholders, the Company determined the lowest per-share price that enabled it to purchase up to $95.0 million of all shares that were validly tendered and not validly withdrawn. All shares accepted in the Offer were purchased at the same price even if tendered at a lower price.

On November 22, 2022, the Company completed the Offer and purchased a total of 115,967 ordinary shares at a price of $10.50 per share, for an aggregate cost of $1.2 million, excluding fees and expenses relating to the Offer. The total of 115,967 shares that were accepted for purchase represented approximately 0.2% of the total number of shares outstanding as of November 21, 2022. The purchased shares were cancelled and ceased to be outstanding. The Company intends to use the unused portion of the Offer to enlarge our previously announced, planned open market share repurchase plan which is described below.

Open Market Share Repurchase Plan

On December 13, 2022, the Company initiated its open market repurchase plan to repurchase ordinary shares. As of December 31, 2022, the Company repurchased 2,978,341 shares on the open market at an average cost of $11.06 per share for an aggregate cost of $32.9 million, excluding fees and expenses. From January 1, 2023 through February 27, 2023, the Company repurchased an additional 2,461,000 shares on the open market at an average cost of $10.99 per share for an aggregate cost of $27.1 million, excluding fees and expenses.

Organization and Summary of Significant Accounting Policies - Property and Equipment (Details)	12 Months Ended
	Dec. 31, 2022
Equipment, furniture and fixtures \| Minimum
Property and Equipment
Estimated useful life	5 years
Equipment, furniture and fixtures \| Maximum
Property and Equipment
Estimated useful life	7 years
Software and computer equipment \| Minimum
Property and Equipment
Estimated useful life	3 years
Software and computer equipment \| Maximum
Property and Equipment
Estimated useful life	5 years

Revenue

12 Months Ended

Dec. 31, 2022

Revenue

Revenue

2. Revenue

Revenues 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 November 2018, YUPELRI was approved by the US Food and Drug Administration (the “FDA”) for the maintenance treatment of patients with chronic obstructive pulmonary disease (“COPD”).

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 the Company). Outside the US (excluding 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 consolidated financial statements.

As of December 31, 2022, the Company is eligible to receive from Viatris potential global development, regulatory and sales milestone payments (excluding China and adjacent territories) totaling up to $205.0 million in the aggregate, with $160.0 million associated with YUPELRI monotherapy, and $45.0 million associated with future potential combination products. Of the $160.0 million associated with monotherapy, $150.0 million relates to sales milestones based on achieving certain levels of net sales and $10.0 million relates to regulatory actions in the EU.

The Viatris Agreement is considered to be within the scope of ASC 808 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, 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 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 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 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 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 year ended December 31, 2022, YUPELRI continued to be profitable for the Company.

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


	Year Ended December 31,
(In thousands)	2022		2021		2020
Viatris collaboration agreement - Amounts receivable from Viatris	$	48,624	$	43,848	$	43,893
Viatris royalties (Non-US)		30		—		—
Total	$	48,654	$	43,848	$	43,893

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 year ended December 31, 2022, 2021, and 2020 of $70.7 million, $56.7 million, and $50.0 million, respectively, before deducting shared expenses. In the fourth quarter of 2022, the Company recognized its first revenue associated with non-US YUPELRI royalties in the amount of $30,000.

Other Collaborative Arrangement Revenues

The Company’s other collaborative arrangement revenues consisted of:


	Year Ended December 31,
(In thousands)	2022		2021		2020
Janssen	$	—	$	11,425	$	26,426
Other		192		38		38
Total collaboration revenue	$	192	$	11,463	$	26,464

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 (formerly known as TD-1473) 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, at the end of 2021, the Company recognized the remaining non-cash deferred collaboration revenue associated with 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 expenses related to reimbursement payments:


	Year Ended December 31,
(In thousands)	2022		2021		2020
Viatris	$	6,682	$	2,072	$	1,524
Janssen		—		5,819		8,554
Total reduction to R&D expense, net	$	6,682	$	7,891	$	10,078

Revenue from Licensing Arrangements

Viatris

In June 2019, the Company announced the expansion of the Viatris Agreement to grant Viatris exclusive development and commercialization rights to nebulized revefenacin in China and adjacent territories, which include Hong Kong SAR, the Macau SAR, and Taiwan. In exchange, the Company received an upfront payment of $18.5 million (before a required tax withholding) and is eligible to receive additional potential development and sales milestones totaling $54.0 million and low double-digit tiered royalties on net sales of nebulized revefenacin, if approved.

In March 2020, the Company earned a $1.5 million development milestone for the acceptance of a clinical trial application associated with the use of revefenacin monotherapy in China and adjacent territories. Viatris is responsible for all aspects of development and commercialization in the China ad adjacent territories, including pre- and post-launch activities and product registration and all associated costs.

Pfizer

In December 2019, the Company entered into a global license agreement with Pfizer Inc. (“Pfizer”) for its 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 December 31, 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.

The Pfizer Agreement is accounted for under ASC 606. The Company identified two performance obligations primarily comprised of the delivery of the license and samples of tangible materials which were completed in December 2019. The transaction price was determined to be the upfront payment of $10.0 million which the Company recognized as licensing revenue in December 2019.

The future potential milestones payable under the Pfizer Amendment 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 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 will be recognized when the sales occur or

the milestone is achieved. The Company will re-evaluate the transaction price each quarter and as uncertain events are resolved or other changes in circumstances occur.

- 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 https://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 https://asc.fasb.org/extlink&oid=126920106&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 https://asc.fasb.org/extlink&oid=126920106&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 https://asc.fasb.org/extlink&oid=126920106&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
-URI https://asc.fasb.org/extlink&oid=126920106&loc=SL49130550-203045

Reference 6: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 606
-SubTopic 10
-Section 50
-Paragraph 12
-Subparagraph (e)
-URI https://asc.fasb.org/extlink&oid=126920106&loc=SL49130554-203045

Reference 7: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 606
-SubTopic 10
-Section 50
-Paragraph 12
-Subparagraph (a)
-URI https://asc.fasb.org/extlink&oid=126920106&loc=SL49130554-203045

Reference 8: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 606
-SubTopic 10
-Section 50
-Paragraph 12
-Subparagraph (d)
-URI https://asc.fasb.org/extlink&oid=126920106&loc=SL49130554-203045

Reference 9: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 606
-SubTopic 10
-Section 50
-Paragraph 15
-URI https://asc.fasb.org/extlink&oid=126920106&loc=SL49130558-203045

Reference 10: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 606
-SubTopic 10
-Section 50
-Paragraph 12
-Subparagraph (c)
-URI https://asc.fasb.org/extlink&oid=126920106&loc=SL49130554-203045

+ Details

Revenue - Janssen Biotech Agreement (Details) $ in Millions	12 Months Ended
Revenue - Janssen Biotech Agreement (Details) $ in Millions	Dec. 31, 2022 USD ($)
Collaborative Arrangements and Co-Promote Agreement
Upfront payment receivable	$ 205.0

Document and Entity Information - USD ($) $ in Millions	12 Months Ended
Document and Entity Information - USD ($) $ in Millions	Dec. 31, 2022	Feb. 21, 2023	Jun. 30, 2022
Document and Entity Information
Document Type	10-K
Document Annual Report	true
Document Period End Date	Dec. 31, 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	P.O. 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 Well-known Seasoned Issuer	No
Entity Voluntary Filers	No
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
ICFR Auditor Attestation Flag	true
Entity Shell Company	false
Title of 12(b) Security	Ordinary Share $0.00001 Par Value
Trading Symbol	TBPH
Security Exchange Name	NASDAQ
Entity Public Float			$ 677.0
Entity Common Stock, Shares Outstanding		62,864,474
Auditor Name	Ernst & Young LLP
Auditor Firm ID	42
Auditor Location	San Mateo, California
Entity Central Index Key	0001583107
Current Fiscal Year End Date	--12-31
Document Fiscal Year Focus	2022
Document Fiscal Period Focus	FY
Amendment Flag	false

Sale of Velusetrag (Details) - USD ($) $ in Millions	12 Months Ended
Sale of Velusetrag (Details) - USD ($) $ in Millions	Dec. 31, 2022	Jul. 31, 2022	Jun. 30, 2022
Sale of Velusetrag
Disposal Group, Not Discontinued Operation, Gain (Loss) on Disposal, Statement of Income or Comprehensive Income [Extensible Enumeration]	Other Nonoperating Income (Expense)
Sale of Velusetrag. \| Disposed of by Sale
Sale of Velusetrag
Consideration from sale of velusetrag assets		$ 2.8
Remaining book value of assets	$ 0.0
Gain on sale of velusetrag assets	$ 2.7
Sale of Velusetrag. \| Disposed of by Sale \| Maximum
Sale of Velusetrag
Future developmental and sales milestones			$ 105.0

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2022	Dec. 31, 2021	Dec. 31, 2020
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)
Net income (loss)	$ 872,132	$ (199,426)	$ (278,017)
Other comprehensive income (loss):
Net unrealized loss on available-for-sale investments, net of tax	(15)	(47)	(98)
Comprehensive income (loss)	$ 872,117	$ (199,473)	$ (278,115)

- Definition

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

+ References

Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 942
-SubTopic 220
-Section S99
-Paragraph 1
-Subparagraph (SX 210.9-04(22))
-URI https://asc.fasb.org/extlink&oid=120399700&loc=SL114874048-224260

Reference 2: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 32
-Subparagraph (f)
-URI https://asc.fasb.org/extlink&oid=126901519&loc=d3e8933-108599

Reference 3: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 250
-SubTopic 10
-Section 50
-Paragraph 4
-URI https://asc.fasb.org/extlink&oid=124431687&loc=d3e22595-107794

Reference 4: http://fasb.org/us-gaap/role/ref/legacyRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 944
-SubTopic 220
-Section S99
-Paragraph 1
-Subparagraph (SX 210.7-04(18))
-URI https://asc.fasb.org/extlink&oid=120400993&loc=SL114874131-224263

Reference 5: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 815
-SubTopic 40
-Section 65
-Paragraph 1
-Subparagraph (f)
-URI https://asc.fasb.org/extlink&oid=126732423&loc=SL123482106-238011

Reference 6: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 220
-SubTopic 10
-Section 50
-Paragraph 6
-URI https://asc.fasb.org/extlink&oid=124431353&loc=SL124452729-227067

Reference 7: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 470
-SubTopic 10
-Section S99
-Paragraph 1B
-Subparagraph (SX 210.13-02(a)(5))
-URI https://asc.fasb.org/extlink&oid=126975872&loc=SL124442552-122756

Reference 8: http://fasb.org/us-gaap/role/ref/legacyRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 220
-SubTopic 10
-Section S99
-Paragraph 2
-Subparagraph (SX 210.5-03(20))
-URI https://asc.fasb.org/extlink&oid=126953954&loc=SL114868664-224227

Reference 9: http://fasb.org/us-gaap/role/ref/legacyRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 230
-SubTopic 10
-Section 45
-Paragraph 28
-URI https://asc.fasb.org/extlink&oid=126954810&loc=d3e3602-108585

Reference 10: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 250
-SubTopic 10
-Section 50
-Paragraph 1
-Subparagraph (b)(2)
-URI https://asc.fasb.org/extlink&oid=124431687&loc=d3e22499-107794

Reference 11: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 470
-SubTopic 10
-Section S99
-Paragraph 1A
-Subparagraph (SX 210.13-01(a)(4)(iv))
-URI https://asc.fasb.org/extlink&oid=126975872&loc=SL124442526-122756

Reference 12: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 470
-SubTopic 10
-Section S99
-Paragraph 1A
-Subparagraph (SX 210.13-01(a)(4)(iii)(A))
-URI https://asc.fasb.org/extlink&oid=126975872&loc=SL124442526-122756

Reference 13: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 470
-SubTopic 10
-Section S99
-Paragraph 1B
-Subparagraph (SX 210.13-02(a)(4)(i))
-URI https://asc.fasb.org/extlink&oid=126975872&loc=SL124442552-122756

Reference 14: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 470
-SubTopic 10
-Section S99
-Paragraph 1A
-Subparagraph (SX 210.13-01(a)(4)(i))
-URI https://asc.fasb.org/extlink&oid=126975872&loc=SL124442526-122756

Reference 15: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 250
-SubTopic 10
-Section 50
-Paragraph 9
-URI https://asc.fasb.org/extlink&oid=124431687&loc=d3e22663-107794

Reference 16: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 470
-SubTopic 10
-Section S99
-Paragraph 1B
-Subparagraph (SX 210.13-02(a)(4)(iv))
-URI https://asc.fasb.org/extlink&oid=126975872&loc=SL124442552-122756

Reference 17: http://www.xbrl.org/2009/role/commonPracticeRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 470
-SubTopic 10
-Section S99
-Paragraph 1A
-Subparagraph (SX 210.13-01(a)(4)(ii))
-URI https://asc.fasb.org/extlink&oid=126975872&loc=SL124442526-122756

Reference 18: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 825
-SubTopic 10
-Section 50
-Paragraph 28
-Subparagraph (f)
-URI https://asc.fasb.org/extlink&oid=123596393&loc=d3e14064-108612

Reference 19: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 250
-SubTopic 10
-Section 50
-Paragraph 3
-URI https://asc.fasb.org/extlink&oid=124431687&loc=d3e22583-107794

Reference 20: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 235
-SubTopic 10
-Section S99
-Paragraph 1
-Subparagraph (SX 210.4-08(g)(1)(ii))
-URI https://asc.fasb.org/extlink&oid=120395691&loc=d3e23780-122690

Reference 21: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 260
-SubTopic 10
-Section 45
-Paragraph 60B
-Subparagraph (a)
-URI https://asc.fasb.org/extlink&oid=126958026&loc=SL5780133-109256

Reference 22: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 323
-SubTopic 10
-Section 50
-Paragraph 3
-Subparagraph (c)
-URI https://asc.fasb.org/extlink&oid=114001798&loc=d3e33918-111571

Reference 23: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 250
-SubTopic 10
-Section 50
-Paragraph 8
-URI https://asc.fasb.org/extlink&oid=124431687&loc=d3e22658-107794

Reference 24: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 220
-SubTopic 10
-Section 45
-Paragraph 1A
-Subparagraph (a)
-URI https://asc.fasb.org/extlink&oid=126968391&loc=SL7669619-108580

Reference 25: http://www.xbrl.org/2003/role/exampleRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 31
-URI https://asc.fasb.org/extlink&oid=126901519&loc=d3e8924-108599

Reference 26: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 250
-SubTopic 10
-Section 50
-Paragraph 11
-Subparagraph (b)
-URI https://asc.fasb.org/extlink&oid=124431687&loc=d3e22694-107794

Reference 27: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 250
-SubTopic 10
-Section 50
-Paragraph 11
-Subparagraph (a)
-URI https://asc.fasb.org/extlink&oid=124431687&loc=d3e22694-107794

Reference 28: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 205
-SubTopic 20
-Section 50
-Paragraph 7
-URI https://asc.fasb.org/extlink&oid=109222650&loc=SL51721683-107760

Reference 29: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 220
-SubTopic 10
-Section 45
-Paragraph 1B
-Subparagraph (a)
-URI https://asc.fasb.org/extlink&oid=126968391&loc=SL7669625-108580

Reference 30: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 22
-URI https://asc.fasb.org/extlink&oid=126901519&loc=d3e8736-108599

Reference 31: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 470
-SubTopic 10
-Section S99
-Paragraph 1A
-Subparagraph (SX 210.13-01(a)(5))
-URI https://asc.fasb.org/extlink&oid=126975872&loc=SL124442526-122756

Reference 32: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 470
-SubTopic 10
-Section S99
-Paragraph 1B
-Subparagraph (SX 210.13-02(a)(4)(iii)(B))
-URI https://asc.fasb.org/extlink&oid=126975872&loc=SL124442552-122756

Reference 33: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 470
-SubTopic 10
-Section S99
-Paragraph 1B
-Subparagraph (SX 210.13-02(a)(4)(iii)(A))
-URI https://asc.fasb.org/extlink&oid=126975872&loc=SL124442552-122756

Reference 34: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 30
-Subparagraph (b)
-URI https://asc.fasb.org/extlink&oid=126901519&loc=d3e8906-108599

Reference 35: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 32
-Subparagraph (c)
-URI https://asc.fasb.org/extlink&oid=126901519&loc=d3e8933-108599

+ Details

Organization and Summary of Significant Accounting Policies - Income Taxes (Details) - USD ($) $ in Thousands	Dec. 31, 2022	Dec. 31, 2021	Dec. 31, 2020
Organization and Summary of Significant Accounting Policies.
US federal, state and foreign unrecognized tax benefits	$ 75,999	$ 75,023	$ 63,447

Commitments and Contingencies

12 Months Ended

Dec. 31, 2022

Commitments and Contingencies

Commitments and Contingencies

17. Commitments and Contingencies

Performance-Contingent Cash Awards

In 2016, the Compensation Committee granted long-term incentive cash bonus awards to certain employees. The vesting and payout of such awards was dependent on the Company meeting its critical operating goals and objectives during a five-year period from 2016 to December 2020, as well as continued employment. The awards were broken into three separate tranches, and expenses associated with these awards were recognized during the years 2016 to 2021 as the performance conditions were achieved.

The performance conditions associated with the first tranche of the cash bonus awards were completed in the second quarter of 2018, the performance conditions associated with the second tranche were completed in the first quarter of 2019, and the performance conditions associated with the third tranche were completed in the first quarter of 2020. The Company recognized $0.4 million and $3.3 million of cash bonus expense for the year ended December 31, 2021 and 2020, respectively, and the expenses associated with these awards were fully recognized as of December 31, 2021. The corresponding share-based compensation expense associated with these awards is discussed in “Note 12. Share-Based Compensation”.

Guarantees and Indemnifications

The Company indemnifies its officers and directors for certain events or occurrences, subject to certain limits. The Company maintains insurance policies that may limit its exposure, and therefore, the Company believes the fair value of these indemnification agreements is minimal. Accordingly, the Company has not recognized any liabilities relating to these agreements as of December 31, 2022. However, no assurances can be given regarding the amounts that may ultimately be covered by the insurers, and the Company may incur substantial liabilities because of these indemnification obligations.

Legal Proceedings

During January 2023, the Company received notice from Accord Healthcare, Inc.; Cipla USA, Inc. and Cipla Limited; Eugia Pharma Specialties Ltd.; Lupin Inc.; Mankind Pharma Ltd.; Orbicular Pharmaceutical Technologies Private Limited; and Teva Pharmaceuticals, Inc. (collectively, the “generic companies”), that they have each filed with FDA an abbreviated new drug application (“ANDA”), for a generic version of YUPELRI. The notices from the generic companies each included a paragraph IV certification with respect to five of the Company’s patents listed in FDA’s Orange Book for YUPELRI on the date of the Company’s receipt of the notice. The asserted patents relate generally to polymorphic forms of and a method of treatment using YUPELRI. In February 2023, the Company filed patent infringement suits against the generic companies in federal district courts, including the United States District Court for the District of New Jersey, the U.S. District Court for the District of Delaware, and the U.S. District Court for the Middle District of North Carolina. The complaint alleges that by filing the ANDAs, the generic companies have infringed five of the Company’s Orange Book listed patents. The Company is seeking a permanent injunction to prevent the generic companies from introducing a generic version of YUPELRI that would infringe its patents. As a result of this lawsuit, a stay of approval through May 2026 will be imposed by FDA on the generic companies’ ANDAs pending any adverse court decision.

Segment Information - Percentage of Revenue (Details) - Total revenue - Customer concentration risk	12 Months Ended
	Dec. 31, 2022	Dec. 31, 2021	Dec. 31, 2020
Viatris
Segment Information
Percentage of total revenues	95.00%	79.00%	63.00%
Janssen
Segment Information
Percentage of total revenues	0.00%	21.00%	37.00%

Ampreloxetine Funding - Schedule of Future Royalty Payment Contingencies (Details) - USD ($) $ in Thousands	5 Months Ended	12 Months Ended
	Dec. 31, 2022	Dec. 31, 2022
Development and Collaboration Agreement
Consideration allocated, less transaction costs of $0.5 million		$ 24,464
Interest accretion		974
Ending balance	$ 25,438	25,438
Ampreloxetine Royalty Rights
Development and Collaboration Agreement
Consideration allocated, less transaction costs of $0.5 million	24,464
Interest accretion	974
Ending balance	$ 25,438	25,438
Transaction costs		$ 500

Investments and Fair Value Measurements - Convertible senior notes (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2022	Dec. 31, 2020
Maturity period for marketable securities
Maximum contractual maturity period	3 months
Weighted average contractual maturity period	1 month
Unrealized losses
Net unrealized losses	$ 0
Available-for-sale securities sold		$ 19,900
Fair value of assets transferred from Level 1 to Level 2	0
Fair value of assets transferred from Level 2 to Level 1	$ 0

Income Taxes - Deferred income taxes (Details) - USD ($) $ in Thousands	Dec. 31, 2022	Dec. 31, 2021
Components of Deferred Tax Assets [Abstract]
Net operating loss carryforwards	$ 104,236	$ 115,606
Capital loss carryforwards	19,409	19,409
Research and development tax credit carryforwards	16,176	28,372
Fixed assets and intangibles	283,260	287,177
Share-based compensation	4,298	10,432
Accruals	1,795	3,590
Operating lease liabilities	11,239	11,607
Prepaid assets	304
Other	30	10,505
Subtotal	440,747	486,698
Valuation allowance	(422,325)	(477,868)
Total deferred tax assets	18,422	8,830
Deferred tax liabilities:
Operating lease assets	(8,634)	(8,575)
Future contingent milestone and royalty assets	(11,725)
Prepaid assets		(255)
Total deferred tax liabilities	(20,359)	(8,830)
Net deferred tax assets (liabilities)	(1,937)
Information related to valuation allowance
Valuation allowance	422,325	$ 477,868
Ireland
Information related to valuation allowance
Net operating loss carryforwards	786,200
Capital loss carryforwards \| Ireland
Information related to valuation allowance
R&D tax credit	58,800
State
Components of Deferred Tax Assets [Abstract]
Net operating loss carryforwards	102,700
State \| Research and Development
Components of Deferred Tax Assets [Abstract]
Research and development tax credit carryforwards	$ 25,400

Leases - Assets and Liabilities (Details) - USD ($) $ in Thousands	Dec. 31, 2022	Dec. 31, 2021
Assets and liabilities
Operating lease assets	$ 40,126	$ 39,690
Operating lease liabilities, current	$ 6,753	$ 503
Operating Lease, Liability, Current, Statement of Financial Position [Extensible List]	Operating lease liabilities, current	Operating lease liabilities, current
Operating lease liabilities	$ 45,407	$ 52,681
Operating Lease, Liability, Noncurrent, Statement of Financial Position [Extensible List]	Operating lease liabilities	Operating lease liabilities
Total operating lease liabilities	$ 52,160	$ 53,184

Investments and Fair Value Measurements - Available-for-sale securities (Details) - USD ($) $ in Thousands	Dec. 31, 2022	Dec. 31, 2021
Available for sale securities:
Amortized Cost	$ 303,557	$ 133,738
Gross Unrealized Gains	12	1
Gross Unrealized Losses	(27)	(5)
Estimated Fair Value	303,542	133,734
Debt Securities, Available-for-sale, Unrealized Gain (Loss) [Abstract]
Estimated Fair Value lesser than 12 months	37,279	35,017
Fair value of assets transferred from Level 1 to Level 2	0
Fair value of assets transferred from Level 2 to Level 1	0
Estimated Fair Value Total	37,279	35,017
Gross unrealized lesser than 12 months	(27)	(5)
Gross unrealized loss, Total	(27)	(5)
Marketable securities
Available for sale securities:
Amortized Cost	83,049	83,510
Gross Unrealized Gains	12	1
Gross Unrealized Losses	(27)	(5)
Estimated Fair Value	83,034	83,506
U.S. government securities
Debt Securities, Available-for-sale, Unrealized Gain (Loss) [Abstract]
Estimated Fair Value lesser than 12 months		19,991
Estimated Fair Value Total		19,991
Gross unrealized lesser than 12 months		(2)
Gross unrealized loss, Total		(2)
U.S. government securities \| Quoted Prices in Active Markets for Identical Assets, Level 1
Available for sale securities:
Amortized Cost	24,873	29,986
Gross Unrealized Gains	8
Gross Unrealized Losses		(2)
Estimated Fair Value	24,881	29,984
U.S. corporate notes
Debt Securities, Available-for-sale, Unrealized Gain (Loss) [Abstract]
Estimated Fair Value lesser than 12 months		5,031
Estimated Fair Value Total		5,031
Gross unrealized lesser than 12 months		(2)
Gross unrealized loss, Total		(2)
U.S. corporate notes \| Significant Other Observable Inputs, Level 2
Available for sale securities:
Amortized Cost		5,034
Gross Unrealized Losses		(2)
Estimated Fair Value		5,032
U.S. commercial paper
Debt Securities, Available-for-sale, Unrealized Gain (Loss) [Abstract]
Estimated Fair Value lesser than 12 months	37,279	9,995
Estimated Fair Value Total	37,279	9,995
Gross unrealized lesser than 12 months	(27)	(1)
Gross unrealized loss, Total	(27)	(1)
U.S. commercial paper \| Significant Other Observable Inputs, Level 2
Available for sale securities:
Amortized Cost	37,307	48,490
Gross Unrealized Gains		1
Gross Unrealized Losses	(27)	(1)
Estimated Fair Value	37,280	48,490
U.S. government agency securities \| Significant Other Observable Inputs, Level 2
Available for sale securities:
Amortized Cost	20,869
Gross Unrealized Gains	4
Estimated Fair Value	20,873
Money market funds \| Quoted Prices in Active Markets for Identical Assets, Level 1
Available for sale securities:
Amortized Cost	220,508	50,228
Estimated Fair Value	$ 220,508	$ 50,228

Organization and Summary of Significant Accounting Policies - Advertising Expenses (Details) - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2022	Dec. 31, 2021	Dec. 31, 2020
Organization and Summary of Significant Accounting Policies.
Advertising expenses	$ 8.0	$ 9.3	$ 6.3

Sale of Equity Interests in Theravance Respiratory Company, LLC and Discontinued Operations (Tables)

12 Months Ended

Dec. 31, 2022

Sale of Equity Interests in Theravance Respiratory Company, LLC and Discontinued Operations

Summary of discontinued operations


	Year Ended December 31,
(In thousands)	2022		2021		2020
Income from investments in TRC, LLC	$	53,237	$	103,987	$	68,438
Transaction-related legal expenses (prior to July 20, 2022)		(5,057)		—		—
Interest expense on 9.5% Non-recourse notes due 2035		(21,312)		(38,342)		(32,193)
Interest expense on 9.0% Non-recourse notes due 2033		—		—		(3,975)
Loss on extinguishment of debt		(24,022)		—		(15,464)
Net gain from sale of equity interests in TRC, LLC		1,141,084		—		—
Provision for income tax expense		(178,974)		—		—
Net income from discontinued operations	$	964,956	$	65,645	$	16,806

Summary of TRC's Statement of income and equity Interest



(In thousands)	July 20, 2022		December 31, 2021
Assets
Cash and cash equivalents	$	29,309	$	50,713
Related party receivables from collaborative arrangements		42,720		42,492
Prepaid expenses and other current assets		—		71
Equity and long-term investments		—		37,695
Total assets	$	72,029	$	130,971

Liabilities and LLC Members' Equity
Accrued liabilities		—		252
LLC members' equity		72,029		130,719
Total liabilities and LLC members' equity	$	72,029	$	130,971


	Period Ended		Year Ended December 31,
(In thousands)	July 20, 2022		2021		2020
Revenue
Royalty revenue from related party	$	72,029	$	126,688	$	73,090
Revenue from collaborative arrangements with a related party		-		—		10,000
Total revenue		72,029		126,688		83,090
General and administrative expenses		332		3,956		2,613
Other income, net		10		—		38
Realized loss on equity and long-term investments		(39,385)
Changes in fair value of equity and long-term investments, net		(8,884)		(1,541)		1,147

Net Income	$	23,438	$	121,191	$	81,662

- Definition

Tabular disclosure of information related to a disposal group. Includes, but is not limited to, a discontinued operation, disposal classified as held-for-sale or disposed of by means other than sale or disposal of an individually significant component.

+ References

Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 360
-SubTopic 10
-Section 50
-Paragraph 3A
-URI https://asc.fasb.org/extlink&oid=109226691&loc=SL51724579-110230

Reference 2: http://fasb.org/us-gaap/role/ref/legacyRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 205
-SubTopic 20
-Section 50
-Paragraph 3
-URI https://asc.fasb.org/extlink&oid=109222650&loc=d3e1474-107760

Reference 3: http://fasb.org/us-gaap/role/ref/legacyRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 205
-SubTopic 20
-Section 50
-Paragraph 5D
-URI https://asc.fasb.org/extlink&oid=109222650&loc=SL51721677-107760

Reference 4: http://fasb.org/us-gaap/role/ref/legacyRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 205
-SubTopic 20
-Section 45
-Paragraph 11
-URI https://asc.fasb.org/extlink&oid=109222160&loc=SL51721533-107759

Reference 5: http://fasb.org/us-gaap/role/ref/legacyRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 205
-SubTopic 20
-Section 50
-Paragraph 3A
-URI https://asc.fasb.org/extlink&oid=109222650&loc=SL51721659-107760

Reference 6: http://fasb.org/us-gaap/role/ref/legacyRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 205
-SubTopic 20
-Section 50
-Paragraph 4B
-URI https://asc.fasb.org/extlink&oid=109222650&loc=SL51721665-107760

Reference 7: http://fasb.org/us-gaap/role/ref/legacyRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 360
-SubTopic 10
-Section 50
-Paragraph 3
-URI https://asc.fasb.org/extlink&oid=109226691&loc=d3e2941-110230

Reference 8: http://fasb.org/us-gaap/role/ref/legacyRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 205
-SubTopic 20
-Section 50
-Paragraph 5C
-URI https://asc.fasb.org/extlink&oid=109222650&loc=SL51721675-107760

Reference 9: http://fasb.org/us-gaap/role/ref/legacyRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 205
-SubTopic 20
-Section 50
-Paragraph 7
-URI https://asc.fasb.org/extlink&oid=109222650&loc=SL51721683-107760

Reference 10: http://fasb.org/us-gaap/role/ref/legacyRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 205
-SubTopic 20
-Section 50
-Paragraph 1
-URI https://asc.fasb.org/extlink&oid=109222650&loc=d3e1361-107760

Reference 11: http://fasb.org/us-gaap/role/ref/legacyRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 205
-SubTopic 20
-Section 50
-Paragraph 5A
-URI https://asc.fasb.org/extlink&oid=109222650&loc=SL51721671-107760

Reference 12: http://fasb.org/us-gaap/role/ref/legacyRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 205
-SubTopic 20
-Section 50
-Paragraph 5B
-URI https://asc.fasb.org/extlink&oid=109222650&loc=SL51721673-107760

Reference 13: http://fasb.org/us-gaap/role/ref/legacyRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 205
-SubTopic 20
-Section 50
-Paragraph 4A
-URI https://asc.fasb.org/extlink&oid=109222650&loc=SL51721663-107760

+ Details

Property and Equipment

12 Months Ended

Dec. 31, 2022

Property and Equipment.

Property and Equipment

7. Property and Equipment

Property and equipment are held predominantly in the US and consisted of the following:


	December 31,
(In thousands)	2022		2021
Computer equipment	$	1,921	$	2,341
Software		1,088		2,063
Furniture and fixtures		1,674		3,605
Laboratory equipment		15,445		20,087
Leasehold improvements		24,583		24,053
Subtotal		44,711		52,149
Less: accumulated depreciation		(32,836)		(38,492)
Property and equipment, net	$	11,875	$	13,657

For the year ended December 31, 2022, 2021, and 2020, depreciation expense for property and equipment was $2.6 million, $3.5 million, and $3.3 million, respectively.

As a result of the Company’s corporate restructuring announcement in September 2021 (see “Note 16. Corporate Restructuring Completion”), the Company completed an auction of certain property and equipment in December 2021. In January 2022, the Company received net proceeds of $1.9 million from the auction, and the net realized loss from the sale of the property and equipment was not material.

Leases (Details) $ in Thousands	1 Months Ended				12 Months Ended
Leases (Details) $ in Thousands	Jun. 30, 2022 USD ($) ft²	May 31, 2022 USD ($) ft²	Jul. 31, 2021 USD ($) ft²	Apr. 30, 2017 USD ($) ft²	Dec. 31, 2022 USD ($) ft² building item	Dec. 31, 2021 USD ($)	Dec. 31, 2020 USD ($)
Lessee, Lease, Description [Line Items]
Area of leased space \| ft²					162,000
Number of building leased \| building					2
Tenant improvement allowance					$ 8,912	$ 10,200
Decrease in operating lease liabilities					1,024	1,742	$ (1,600)
Option to terminate sublease			false
Area of subleased property \| ft²			21,000
Monthly base rent			$ 100
Increase in annual base rent (as a percent)			3.00%
Premium component in sublease income			$ 4,200
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			$ 2,100
Percentage of excess sublease income over lease obligations to be retained			50.00%
Expected sublease income			$ 13,100
Ireland
Lessee, Lease, Description [Line Items]
Tenant improvement allowance					(8,900)
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
Lease term		2 years
Option to terminate		true
Lease termination notice period		3 months
Operating lease expenses		$ 400
Annual base rent expenses		$ 200		$ 400
South San Francisco
Lessee, Lease, Description [Line Items]
Area of subleased property \| ft²	78,000
Expected sublease income					$ 5,000	$ 500
South San Francisco \| Sublease
Lessee, Lease, Description [Line Items]
Option to terminate sublease	false
Annual base rent expenses	$ 800
Monthly base rent	$ 500
Increase in annual base rent (as a percent)	3.00%
Expects to receive base rent	$ 51,700
Premium component in sublease income	$ 13,500
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	$ 6,700
Percentage of excess sublease income over lease obligations to be retained	50.00%
Number of buildings in which office and laboratory space leased \| item					2
Reduction in expenses	$ 6,500
Tenant improvement allowance	$ 8,900

Public Offering of Ordinary Shares - (Details) - USD ($) $ / shares in Units, $ in Thousands		12 Months Ended
	Jun. 29, 2021	Dec. 31, 2021	Dec. 31, 2020
Subsidiary, Sale of Stock
Number of shares issued	7,705,000
Share price (in dollars per share)	$ 15.00
Proceeds from sale of ordinary shares	$ 115,600	$ 108,180	$ 139,915
Over allotment option
Subsidiary, Sale of Stock
Number of shares issued	1,005,000
Option to purchase additional shares, number of days	30 days
Public Offering
Subsidiary, Sale of Stock
Number of shares issued	6,700,000

Share-Based Compensation - Theravance Biopharma Equity Plans (Details)		12 Months Ended
	Jun. 02, 2014 plan	Dec. 31, 2014 shares	Dec. 31, 2013 item shares
Share-Based Compensation
Number of plans \| plan	3
2013 Equity Incentive Plan
Share-Based Compensation
Shares approved for grant (in shares)			5,428,571
2013 Equity Incentive Plan \| Maximum
Share-Based Compensation
Shares that may be issued as percent of prior year outstanding shares			5.00%
Automatic increase in number of shares that may be issued			3,428,571
2013 Equity Incentive Plan \| Stock options
Share-Based Compensation
Term (in years)			10 years
Vesting period			4 years
Period of forfeiture of unvested option upon termination of service			3 months
2013 Equity Incentive Plan \| Stock options \| Vesting after one year
Share-Based Compensation
Vesting period			1 year
Vesting of RSU (as a percent)			25.00%
2013 Equity Incentive Plan \| Stock options \| Monthly vesting over the remaining three years
Share-Based Compensation
Vesting period			3 years
Vesting of RSU (as a percent)			75.00%
2013 Employee Share Purchase Plan
Share-Based Compensation
Shares approved for grant (in shares)			857,142
Purchase price as a percentage of fair market value of stock			85.00%
Consecutive and overlapping offering periods			24 months
Number of purchase periods \| item			4
Duration of purchase period			6 months
Maximum contribution as percent of compensation			15.00%
2013 Employee Share Purchase Plan \| Maximum
Share-Based Compensation
Shares that may be issued as percent of prior year outstanding shares			1.00%
Automatic increase in number of shares that may be issued			571,428
2014 NEEIP
Share-Based Compensation
Shares approved for grant (in shares)		750,000
2014 NEEIP \| Stock options
Share-Based Compensation
Term (in years)		10 years
Vesting period		4 years
Period of forfeiture of unvested option upon termination of service		3 months
2014 NEEIP \| Stock options \| Vesting after one year
Share-Based Compensation
Vesting period		1 year
Vesting of RSU (as a percent)		25.00%
2014 NEEIP \| Stock options \| Monthly vesting over the remaining three years
Share-Based Compensation
Vesting period		3 years
Vesting of RSU (as a percent)		75.00%

Commitments and Contingencies - Performance-Contingent Awards (Details) - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2021	Dec. 31, 2020	Dec. 31, 2016	Dec. 31, 2022
Commitments and Contingencies
Guarantees and Indemnifications Liability				$ 0.0
Long-Term Retention and Incentive Cash Bonus Awards \| Employee
Commitments and Contingencies
Service-based vesting period			5 years
Long-Term Retention and Incentive Cash Bonus Awards \| Third tranche
Commitments and Contingencies
Cash bonus awards recognized	$ 0.4	$ 3.3

Revenue (Tables)

12 Months Ended

Dec. 31, 2022

Revenue

Schedule of revenue recognized from collaborative arrangements


	Year Ended December 31,
(In thousands)	2022		2021		2020
Viatris collaboration agreement - Amounts receivable from Viatris	$	48,624	$	43,848	$	43,893
Viatris royalties (Non-US)		30		—		—
Total	$	48,654	$	43,848	$	43,893

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


	Year Ended December 31,
(In thousands)	2022		2021		2020
Janssen	$	—	$	11,425	$	26,426
Other		192		38		38
Total collaboration revenue	$	192	$	11,463	$	26,464

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


	Year Ended December 31,
(In thousands)	2022		2021		2020
Viatris	$	6,682	$	2,072	$	1,524
Janssen		—		5,819		8,554
Total reduction to R&D expense, net	$	6,682	$	7,891	$	10,078

Corporate Restructuring Completion (Tables)

12 Months Ended

Dec. 31, 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		6,074
Cash paid		(15,624)
Balance at December 31, 2022	$	—

Revenue - Revenue from Licensing Arrangements (Details) $ in Thousands	1 Months Ended			3 Months Ended								12 Months Ended
	Mar. 31, 2022 USD ($)	Mar. 31, 2020 USD ($)	Jun. 30, 2019 USD ($)	Dec. 31, 2022 USD ($)	Sep. 30, 2022 USD ($)	Jun. 30, 2022 USD ($)	Mar. 31, 2022 USD ($)	Dec. 31, 2021 USD ($)	Sep. 30, 2021 USD ($)	Jun. 30, 2021 USD ($)	Mar. 31, 2021 USD ($)	Dec. 31, 2022 USD ($)	Dec. 31, 2021 USD ($)	Dec. 31, 2020 USD ($)	Dec. 31, 2019 USD ($) item
Collaborative Arrangements and Co-Promote Agreement
Total revenue				$ 14,649	$ 12,451	$ 11,050	$ 13,196	$ 14,946	$ 13,194	$ 12,914	$ 14,257	$ 51,346	$ 55,311	$ 71,857
Viatris
Collaborative Arrangements and Co-Promote Agreement
Total revenue		$ 1,500
Upfront payment receivable			$ 18,500
Viatris \| Future potential combination products \| Development and Sales Milestones
Collaborative Arrangements and Co-Promote Agreement
Total revenue			$ 54,000
Pfizer
Collaborative Arrangements and Co-Promote Agreement
Initial cash payment															$ 10,000
Total revenue	$ 2,500
Number of performance obligations \| item															2
Pfizer \| Sales milestones
Collaborative Arrangements and Co-Promote Agreement
Initial cash payment												$ 237,500

Organization and Summary of Significant Accounting Policies

12 Months Ended

Dec. 31, 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.

Basis of Presentation

The Company’s consolidated financial statements as of December 31, 2022 and 2021, and for the year ended December 31, 2022, 2021, and 2020 have been prepared in conformity with United States (“US”) Generally Accepted Accounting Principles ("GAAP"), and the US Securities and Exchange (“SEC”) regulations for annual reporting.

On July 20, 2022, the Company completed a monetization of its ownership interests in a significant equity method investment which had a major effect on the Company’s financial results for the year ended December 31, 2022 (see “Note 9. Sale of Equity Interests in Theravance Respiratory Company, LLC”). In accordance with GAAP, the transaction was accounted for as a sale of a financial asset. For all periods presented, the results of the sale have been included as discontinued operations on these consolidated financial statements.

Principles of Consolidation

The consolidated financial statements include the accounts of Theravance Biopharma and its wholly-owned subsidiaries, all of which are denominated in US dollars. All intercompany balances and transactions have been eliminated in consolidation.

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 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.

Segment Reporting

The Company operates in a single segment, which is the discovery (research), development, and commercialization of human therapeutics. The Company’s business offerings have similar economics and other characteristics, including the nature of products and manufacturing processes, types of customers, distribution methods and regulatory environment. The Company is comprehensively managed as one business segment by the Company’s Chief Executive Officer and the management team. Revenue from collaborative arrangements, including royalty revenue, are attributed to regions based on the location of the collaboration partner. Revenue from profit sharing-type arrangements is attributed to the geographic market in which the products are sold. Capitalized property and equipment is predominantly located in the US.

Cash and Cash Equivalents

The Company considers all highly-liquid investments purchased with a maturity of three months or less on the date of purchase to be cash equivalents. Cash equivalents are carried at fair value.

Restricted Cash

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. The Company may also maintain restricted cash for debt servicing of its non-recourse notes. See “Note 5. Cash, Cash Equivalents, and Restricted Cash” for more information.

Investments in Marketable Securities

The Company invests in marketable securities, primarily commercial paper, corporate notes, government bonds and government agency bonds. The Company classifies its marketable securities as available-for-sale securities and reports them at fair value in cash and cash equivalents or marketable securities on the consolidated balance sheets with related unrealized gains and losses included as a component of shareholders’ equity (deficit). The amortized cost of debt securities is adjusted for amortization of premiums and accretion of discounts to maturity, which is included in interest and other income (loss) on the consolidated statements of operations.

The cost of securities sold is based on the specific identification method. Realized gains and losses and interest and dividends on securities are included in interest and other income (loss). In circumstances where the Company intends to sell, or is more likely than not required to sell, the security before it recovers its amortized cost basis, the difference between fair value and amortized cost is recognized as a loss in the consolidated statements of operations, with a corresponding write-down of the security's amortized cost.

The Company accounts for credit losses on available-for-sale debt securities in accordance with Accounting Standards Codification (“ASC”), Topic 326, Financial Instruments – Credit Losses (“ASC 326”). Under ASC 326, the Company regularly reviews its investments for declines in estimated fair value below amortized cost. The factors considered in determining whether a credit loss exists include the creditworthiness of the security issuers, the number of securities in unrealized loss positions, the severity and duration of the unrealized losses, whether the Company has the intent to sell the securities and whether it is more likely than not that the Company will be required to sell the securities before the recovery of the security’s amortized cost basis. The did not recognize any credit losses on available-for-sale debt securities for the year ended December 31, 2022, 2021, and 2020.

Fair Value of Financial Instruments

The Company defines fair value as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date.

The Company’s valuation techniques are based on observable and unobservable inputs. Observable inputs reflect readily obtainable data from independent sources, while unobservable inputs reflect the Company’s market assumptions. The Company classifies these inputs into the following hierarchy:

Level 1 —

Quoted prices for identical instruments in active markets.

Level 2 —

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.

Level 3 —

Unobservable inputs and little, if any, market activity for the assets.

Financial instruments include cash equivalents, marketable securities, accounts receivable, accounts payable, accrued liabilities, and formerly outstanding debt. The Company’s cash equivalents and marketable securities are carried at estimated fair value and remeasured on a recurring basis. The carrying value of accounts receivable, receivables from collaborative arrangements, accounts payable, and accrued liabilities approximate their estimated fair value due to the relatively short-term nature of these instruments. The fair value of the Company’s formerly outstanding debt was classified as a level 2 financial instrument.

Receivables from Collaborative Arrangements

For the periods presented, the Company’s receivables from collaborative arrangements relate to amounts due arising from its collaboration (and licensing) agreements. When appropriate, the Company provides for an allowance for credit losses. The Company performs periodic credit evaluations of its customers and generally does not require

collateral. For the periods presented, the Company did not have any material write-offs of receivables from collaborative arrangements.

Concentration of Credit Risks

The Company invests in a variety of financial instruments and, based on its policy, limits the amount of credit exposure with any one issuer, industry or geographic area for investments other than instruments backed by the US federal government.

The Company’s future contingent milestone and royalty assets and receivables primarily relate to amounts due under its collaboration and other agreements. Accordingly, the Company may be exposed to credit risk generally associated with pharmaceutical companies or specific to its collaboration agreements. The Company performs periodic evaluations of its customers and generally does not require collateral. For the year ended December 31, 2022, 2021, and 2020, the Company did not experience any material losses related to its receivables.

Property and Equipment

Property, equipment and leasehold improvements are stated at cost, net of accumulated depreciation, and amortized using the straight-line method as follows:


Leasehold improvements		Shorter of remaining lease terms or useful life
Equipment, furniture and fixtures		5 - 7 years
Software and computer equipment		3 - 5 years

Leases

The Company determines whether a contract is or contains a lease at inception of the arrangement. In evaluating whether a contract is indicative of a lease, the Company considers all relevant facts and circumstances to assess whether the arrangement has extended to the Company the right to both (i) obtain substantially all the economic benefits from use of an identified asset and (ii) direct the use of the identified asset. To the extent that the Company determines a contract represents a lease, the arrangement is classified as either an operating lease or a finance lease, with the classification affecting the presentation and pattern of expense recognition in the consolidated statements of operations. The Company did not have any finance leases at either December 31, 2022 or 2021.

Operating lease assets represent the Company’s right to use an underlying asset for the lease term and operating lease liabilities represent the Company’s obligation to make lease payments arising from the leasing arrangement. The Company records operating leases on the consolidated balance sheets through an operating lease asset and a corresponding short-term and long-term operating lease liability, as applicable. Lease liabilities are measured based on the present value of lease payments over the lease term discounted at the implicit interest rate, when readily available or using the Company’s incremental borrowing rate, if the implicit rate is not determinable. The incremental borrowing rate is considered the rate of interest that the Company would have to pay to borrow, on a collateralized basis over a similar term, an amount equal to the lease payments in a similar economic environment. The Company measures its operating lease assets based on the corresponding operating lease liabilities adjusted for (i) prepayments made to the lessor at or before the commencement date, (ii) any initial direct costs incurred, and (iii) tenant incentives granted under the lease contract.

In calculating operating lease assets and liabilities, the Company may elect to combine lease and non-lease components based on the asset type. The Company’s lease terms may include options to extend the lease only when it is reasonably certain that such options will be exercised, and the Company recognizes lease expense on a straight-line basis over the lease term. Operating lease assets are evaluated for possible impairment in accordance with the Company’s long-lived assets policy.

The Company does not recognize operating lease assets or liabilities for leases that have a lease term of 12 months or less at commencement date, and the lease expense related to these short-term lease arrangements is recognized on a straight-line basis over the term of the lease.

Future Contingent Milestone and Royalty Assets

The fair value of consideration received in connection with TRC Transaction in July 2022 (see “Note 9. Sale of Equity Interests in Theravance Respiratory Company, LLC and Discontinued Operations”) included an estimated $194.2 million in future contingent milestone and royalties that was recorded as a contingent consideration asset (“Contingent Consideration”) on the Company’s consolidated balance sheets on the TRC Transaction date. The Contingent Consideration was initially measured at fair value utilizing a Monte Carlo simulation model to calculate the present value of the risk-adjusted cash flows estimated to be received from the Contingent Consideration. The fair value model involved significant unobservable inputs derived using Company estimates. The Company’s estimates were based in part on external data and reflected its judgements and forecasts. The primary significant unobservable input was the estimate of forecasted TRELEGY net revenues which is considered a Level 3 fair value input. The Company periodically reassesses the carrying value of the Contingent Consideration when indicators of impairment are identified, and the Company will recognize an impairment loss if the carry value materially exceeds the reassessed fair value. The Company recognizes any increases in the carrying value of the Contingent Consideration only when such contingent gains are realized.

Future Royalty Payment Contingency

The Company treats contingent liabilities related to sale of future royalties (see “Note 10. Ampreloxetine Funding”) as debt financings, amortized under the effective interest rate method over the estimated life of the related expected royalty stream. The contingent liabilities related to sale of future royalties and the debt amortization are based on current estimates of future royalty payments, including the potential for any future funding milestones. The Company periodically reassesses the amount and timing of estimated royalty payments based on internal sales projections and external information from market data sources, which are considered Level 3 inputs. To the extent the Company’s estimates of future royalty payments are materially greater or less than previous estimates or the estimated timing of such payments is materially different than previous estimates, the Company will prospectively adjust the amortization of the contingent liability and effective interest rate.

Revenue Recognition

The Company recognizes revenue under ASC Topic 606, Revenue from Contracts with Customers (“ASC 606”). Under ASC 606, an entity recognizes revenue when its customer obtains control of promised goods or services, in an amount that reflects the consideration which the entity expects to receive in exchange for those goods or services. To determine revenue recognition for arrangements that an entity determines are within the scope of ASC 606, an entity performs the following five steps: (i) identify the contract(s) with a customer; (ii) identify the performance obligations in the contract; (iii) determine the transaction price; (iv) allocate the transaction price to the performance obligations in the contract; and (v) recognize revenue when (or as) the entity satisfies a performance obligation.

At contract inception, once the contract is determined to be within the scope of ASC 606, the Company identifies the performance obligations in the contract by assessing whether the goods or services promised within each contract are distinct. The Company then recognizes revenue for the amount of the transaction price that is allocated to the respective performance obligation when (or as) the performance obligation is satisfied.

Collaborative Arrangements under ASC 606

The Company enters into collaborative arrangements with partners that fall under the scope of ASC Topic 808, Collaborative Arrangements (“ASC 808”). While these arrangements are in the scope of ASC 808, the Company may analogize to ASC 606 for some aspects of these arrangements. The Company analogizes to ASC 606 for certain activities within collaborative arrangements for the delivery of a good or service (i.e., a unit of account) that is part of its ongoing major or central operations. Revenue recognized by analogizing to ASC 606 is recorded as “collaboration revenue” or “licensing revenue” whereas, revenue recognized in accordance with ASC 808 is recorded on a separate collaboration revenue line on the consolidated statements of operations.

The terms of the Company’s collaborative arrangements typically include one or more of the following: (i) up-front fees; (ii) milestone payments related to the achievement of development, regulatory, or commercial goals; (iii) royalties on net sales of licensed products; (iv) reimbursements or cost-sharing of research and development expenses;

and (v) profit/loss sharing arising from co-promotion arrangements. Each of these payments results in collaboration revenues or an offset against research and development expense. Where a portion of non-refundable up-front fees or other payments received is allocated to continuing performance obligations under the terms of a collaborative arrangement, they are recorded as deferred revenue and recognized as collaboration revenue when (or as) the underlying performance obligation is satisfied.

As part of the accounting for these arrangements, the Company must develop estimates and assumptions that require judgment to determine the underlying stand-alone selling price for each performance obligation which determines how the transaction price is allocated among the performance obligations. The estimation of the stand-alone selling price may include such estimates as, forecasted revenues or costs, development timelines, discount rates, and probabilities of technical and regulatory success. The Company evaluates each performance obligation to determine if they can be satisfied at a point in time or over time, and it measures the services delivered to the collaborative partner which are periodically reviewed based on the progress of the related program. The effect of any change made to an estimated input component and, therefore revenue or expense recognized, would be recorded as a change in estimate. In addition, variable consideration (e.g., milestone payments) must be evaluated to determine if it is constrained and, therefore, excluded from the transaction price.

Up-front Fees: If a license to the Company’s intellectual property is determined to be distinct from the other performance obligations identified in the arrangement, the Company recognizes collaboration revenues from the transaction price allocated to the license when the license is transferred to the licensee and the licensee is able to use and benefit from the license. For licenses that are bundled with other promises, the Company utilizes judgment to assess the nature of the combined performance obligation to determine whether the combined performance obligation is satisfied over time or at a point in time and, if over time, the appropriate method of measuring progress for purposes of recognizing collaboration revenue from the allocated transaction price. For example, when the Company receives up-front fees for the performance of research and development services, or when research and development services are not considered to be distinct from a license, the Company recognizes collaboration revenue for those units of account over time using a measure of progress. The Company evaluates the measure of progress each reporting period and, if necessary, adjusts the measure of performance and related revenue or expense recognition as a change in estimate.

Milestone Payments: At the inception of each arrangement that includes milestone payments (variable consideration), the Company evaluates whether the milestones are considered probable of being reached and estimates the amount to be included in the transaction price using the most likely amount method. If it is probable that a significant revenue reversal would not occur, the associated milestone value is included in the transaction price. Milestone payments that are not within the Company’s or the collaborative partner’s control, such as non-operational developmental and regulatory approvals, are generally not considered probable of being achieved until those approvals are received. At the end of each reporting period, the Company re-evaluates the probability of achievement of milestones that are within its or the collaborative partner’s control, such as operational developmental milestones and any related constraint, and if necessary, adjusts its estimate of the overall transaction price. Any such adjustments are recorded on a cumulative catch-up basis, which would affect collaboration revenues and earnings in the period of adjustment. Revisions to the Company’s estimate of the transaction price may also result in negative collaboration revenues and earnings in the period of adjustment.

Royalties: For arrangements that include sales-based royalties, including commercial milestone payments based on the level of sales, and the license is deemed to be the predominant item to which the royalties relate, the Company recognizes revenue at the later of (i) when the related sales occur, or (ii) when the performance obligation to which some or all of the royalty has been allocated has been satisfied (or partially satisfied).

Reimbursement, cost-sharing and profit-sharing payments: Under certain collaborative arrangements, the Company has been reimbursed for a portion of its research and development expenses or participates in the cost-sharing of such research and development expenses. Such reimbursements and cost-sharing arrangements have been reflected as a reduction of research and development expense in the Company’s consolidated statements of operations, as the Company does not consider performing research and development services for reimbursement to be a part of its ongoing major or central operations.

Research and Development Expenses

Research and development (“R&D”) expenses are recorded in the period that services are rendered or goods are received. R&D expenses consist of salaries and benefits, laboratory supplies, and facility costs, as well as fees paid to third parties that conduct certain R&D activities on behalf of the Company, net of certain external R&D expenses reimbursed under the Company’s collaborative arrangements.

As part of the process of preparing its consolidated financial statements, the Company is required to estimate and accrue certain R&D expenses. This process involves the following:

•

identifying services that have been performed on the Company’s behalf and estimating the level of service performed and the associated cost incurred for the service when the Company has not yet been invoiced or otherwise notified of actual cost;

•

estimating and accruing expenses in the Company’s consolidated financial statements as of each balance sheet date based on facts and circumstances known to it at the time; and

•

periodically confirming the accuracy of the Company’s estimates with selected service providers and making adjustments, if necessary.

Examples of estimated R&D expenses that the Company may accrue include:

•

fees paid to clinical research organizations (“CROs”) in connection with preclinical and toxicology studies and clinical studies;

•

fees paid to investigative sites in connection with clinical studies;

•

fees paid to contract manufacturing organizations (“CMOs”) in connection with the production of product and clinical study materials; and

•

professional service fees for consulting and related services.

The Company bases its expense accruals related to clinical studies on its estimates of the services received and efforts expended pursuant to contracts with multiple research institutions and CROs that conduct and manage clinical studies on the Company’s behalf. The financial terms of these agreements vary from contract to contract and may result in uneven payment flows. Payments under some of these contracts depend on factors, such as the successful enrollment of patients and the completion of clinical study milestones. The Company’s service providers typically invoice it monthly in arrears for services performed. In accruing service fees, the Company estimates the time period over which services will be performed and the level of effort to be expended in each period. If the Company does not identify costs that it has begun to incur or if it underestimates or overestimates the level of services performed or the costs of these services, the Company’s actual expenses could differ from its estimates.

To date, the Company has not experienced significant changes in its estimates of accrued R&D expenses after a reporting period. However, due to the nature of estimates, there is no assurance that the Company will not make changes to its estimates in the future as it becomes aware of additional information about the status or conduct of its clinical studies and other R&D activities. Such changes in estimates will be recognized as R&D expenses in the period that the change in estimate occurs.

Advertising Expenses

The Company expenses the costs of advertising, including promotional expenses, as incurred. Advertising expenses were $8.0 million, $9.3 million and $6.3 million for the year ended December 31, 2022, 2021, and 2020, respectively.

Fair Value of Share-Based Compensation Awards

The Company issues share-based awards to employees and non-employees, generally in the form of share options and restricted share units (“RSUs”). Share-based compensation expense is calculated based on awards ultimately expected to vest and is reduced for actual forfeitures as they occur. The Company expenses these share-based awards over the requisite service period on a straight-line basis, based on the grant date fair value of the awards.

The Company determines the fair value of RSUs using the closing market price of the Company's common shares on the day of grant. The Company uses the Black-Scholes-Merton option pricing model to estimate the fair value of options granted under its equity incentive plans and rights to acquire shares granted under its employee share purchase plan (“ESPP”). The Black-Scholes-Merton option pricing model requires the use of assumptions, including the expected term of the award and the expected share price volatility. The Company uses the “simplified” method as described in Staff Accounting Bulletin No. 107, Share-Based Payment, to estimate the expected option term and plans to transition to historical option exercise data in the near future. The expected share price volatility is based on the historical volatility.

The Company also issues performance share units that settle in the Company's shares. The fair value is determined on the date of the grant using the number of shares expected to be earned and the ending market value of the shares on grant date. The number of shares expected to vest is determined by assessing the probability that the performance criteria will be met and the associated targeted payout level that is forecasted will be achieved. For performance share units, the Company recognizes share-based compensation expense over the requisite service period using the accelerated attribution method when achievement of the performance criteria becomes probable.

Debt Instruments

Coupon interest on the Company’s formerly outstanding debt instruments was accrued using the effective interest rate method over the estimated period the debt will be repaid. Debt issuance costs were capitalized as deferred financing costs and presented as a reduction of the carrying value of the financial liability on the Company’s consolidated balance sheets. Debt issuance costs subsequently were amortized to interest expense over the estimated life of the related debt based on the effective interest method. The Company considered whether there were any embedded features in its debt instruments that required bifurcation and separate accounting as derivative financial instruments pursuant to ASC Topic 815, Derivatives and Hedging. The Company’s formerly outstanding debt instruments did not include any features that require bifurcation and separate derivative accounting.

Income Taxes

The Company utilizes the asset and liability method of accounting for income taxes. Under this method, deferred tax assets and liabilities are determined based on differences between financial reporting and tax basis of assets and liabilities and are measured using enacted tax rates and laws that are anticipated to be in effect when the differences are expected to reverse. A valuation allowance is provided when it is more likely than not that some portion or all of a deferred tax asset will not be realized.

The Company’s total unrecognized tax benefits of $76.0 million and $75.0 million, as of December 31, 2022 and December 31, 2021, respectively, may reduce the effective tax rate in the period of recognition. The Company currently has a full valuation allowance against its deferred tax assets, which would impact the timing of the effective tax rate benefit should any of the Company’s uncertain positions be favorably settled in the future.

The Company assesses all material positions, including all significant uncertain positions, in all tax years that are still subject to assessment or challenge by relevant taxing authorities. Assessing an uncertain tax position begins with the initial determination of the position’s sustainability and is measured at the largest amount of benefit that is greater than 50% likely to be realized upon ultimate settlement. As of each balance sheet date, unresolved uncertain tax positions must be reassessed, and the Company will determine whether the factors underlying the sustainability assertion have changed and whether the amount of the recognized tax benefit is still appropriate.

The recognition and measurement of tax benefits requires significant judgment. The Company has taken certain positions where it believes that its position is greater than 50% likely to be realized upon ultimate settlement and for which no reserve for uncertain tax positions has been recorded. If the Company does not ultimately realize the expected

benefit of these positions, it will record additional income tax expenses in future periods. Judgments concerning the recognition and measurement of a tax benefit might change as new information becomes available.

Any tax levied or credited by a governmental taxing authority that is not based on the Company’s income is outside the scope of accounting for income taxes. Therefore, the Company records such items as a component of its loss before income taxes.

Net Income (Loss) per Share

Basic net income (loss) per share is computed by dividing net income (loss) by the weighted-average number of shares outstanding, less ordinary shares subject to forfeiture. Diluted net income (loss) per share is computed by dividing net income (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.


	Year Ended December 31,
(In thousands, except per share data)	2022		2021		2020
Numerator:
Net loss from continuing operations	$	(92,824)	$	(265,071)	$	(294,823)
Net income from discontinued operations		964,956		65,645		16,806
Net income (loss)		872,132		(199,426)		(278,017)

Denominator:
Weighted-average ordinary shares outstanding		73,591		69,518		62,808
Less: weighted-average ordinary shares subject to forfeiture		—		(57)		(463)
Weighted-average ordinary shares outstanding - basic and diluted		73,591		69,461		62,345

Net income (loss) per ordinary share:
Continuing operations - basic and diluted	$	(1.26)	$	(3.82)	$	(4.73)
Discontinued operations - basic and diluted	$	13.11	$	0.95	$	0.27
Net income (loss) - basic and diluted	$	11.85	$	(2.87)	$	(4.46)

Anti-dilutive Securities

In accordance with ASC 260, Earnings Per Share, if a company incurred a loss related to its continuing operations, then potential ordinary shares are considered anti-dilutive for the periods in which the loss was recognized. For the year ended December 31, 2022, 2021, and 2020, the Company recognized losses from continuing operations. As a result, the following ordinary equivalent shares were not included in the computation of diluted net loss per share for both continuing operations and discontinuing operations:


	Year Ended December 31,
(In thousands)	2022	2021	2020
Share issuances under equity incentive plans and employee share purchase plans	5,487	7,469	6,553
Share issuances upon the conversion of convertible senior notes	—	6,676	6,676
Total	5,487	14,145	13,229

Comprehensive Income (Loss)

Comprehensive income (loss) is comprised of net income (loss) and changes in unrealized gains and losses on the Company’s available-for-sale investments.

Related Parties

See “Note 15. Capital Return Program” for information regarding the Company’s repurchase of all of its ordinary shares previously held by GSK Finance (No.3) plc (“GSK Finance”), a wholly-owned subsidiary of GSK, in September 2022.

Robert V. Gunderson, Jr. was a member of the Company’s board of directors until his resignation effective September 11, 2021. The Company has engaged Gunderson Dettmer Stough Villeneuve Franklin & Hachigian, LLP, of which Mr. Gunderson is a partner, as its primary legal counsel. Fees incurred for services provided by Gunderson Dettmer Stough Villeneuve Franklin & Hachigian, LLP for the year ended December 31, 2021 and 2020, were $0.5 million for each year.

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 consolidated financial statements and related disclosures.

SUPPLEMENTARY FINANCIAL DATA (UNAUDITED) (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended								12 Months Ended
	Dec. 31, 2022	Sep. 30, 2022	Jun. 30, 2022	Mar. 31, 2022	Dec. 31, 2021	Sep. 30, 2021	Jun. 30, 2021	Mar. 31, 2021	Dec. 31, 2022	Dec. 31, 2021	Dec. 31, 2020
Total revenue	$ 14,649	$ 12,451	$ 11,050	$ 13,196	$ 14,946	$ 13,194	$ 12,914	$ 14,257	$ 51,346	$ 55,311	$ 71,857
Costs and expenses	32,081	21,595	37,929	51,698	71,113	66,809	77,024	98,149	143,303	313,095	369,484
Loss from operations	(17,432)	(9,144)	(26,879)	(38,502)	(56,167)	(53,615)	(64,110)	(83,892)	(91,957)	(257,784)	(297,627)
Net loss from continuing operations	14,256	10,460	26,570	41,538	57,814	55,910	64,856	86,490	92,824	265,071	294,823
Net income from discontinued operations	3,894	927,091	18,379	15,592	25,780	20,602	12,451	6,811	964,956	65,645	16,806
Net income (loss)	$ (10,362)	$ 916,631	$ (8,191)	$ (25,946)	$ (32,034)	$ (35,308)	$ (52,405)	$ (79,679)	$ 872,132	$ (199,426)	$ (278,017)
Net loss from continuing operations - basic per share	$ (0.21)	$ (0.21)	$ (0.35)	$ (0.55)	$ (0.78)	$ (0.76)	$ (0.99)	$ (1.35)	$ (1.26)	$ (3.82)	$ (4.73)
Net loss from continuing operations - diluted per share	(0.21)	(0.21)	(0.35)	(0.55)	(0.78)	(0.76)	(0.99)	(1.35)	(1.26)	(3.82)	(4.73)
Net income from discontinued operations - basis per share	0.06	12.35	0.24	0.21	0.35	0.28	0.19	0.11	13.11	0.95	0.27
Net income from discontinued operations - diluted per share	0.06	12.35	0.24	0.21	0.35	0.28	0.19	0.11	13.11	0.95	0.27
Net income (loss) - basis	(0.15)	12.14	(0.11)	(0.34)	(0.43)	(0.48)	(0.80)	(1.24)	11.85	(2.87)	(4.46)
Net income (loss) - diluted	$ (0.15)	$ 12.14	$ (0.11)	$ (0.34)	$ (0.43)	$ (0.48)	$ (0.80)	$ (1.24)	$ 11.85	$ (2.87)	$ (4.46)
Percentage of profit share									35.00%
YUPELRI Monotherapy
Total revenue		$ 18,698	$ 17,177	$ 15,283	$ 15,344	$ 13,806	$ 14,621	$ 12,908	$ 19,495
Percentage of Net Sales									35.00%
Mylan
Percentage of profit share									65.00%

Extinguishment of Debt (Details) - USD ($) $ in Thousands				1 Months Ended	12 Months Ended
Extinguishment of Debt (Details) - USD ($) $ in Thousands	Jul. 26, 2022	Jul. 20, 2022	Feb. 21, 2020	Nov. 30, 2016	Dec. 31, 2022	Dec. 31, 2021	Dec. 31, 2020
Debt Instrument [Line Items]
Accrued interest						$ 1,246
Loss on extinguishment of debt					$ (3,034)
Total long-term debt						616,334
Stated coupon interest					4,859	7,475	$ 7,475
Amortization of debt issuance costs					536	1,072	1,072
Ampreloxetine interest accretion					974
Total debt interest expense					$ 6,369	$ 8,547	8,547
9.5% Non-Recourse 2035 Notes
Debt Instrument [Line Items]
Interest rate (as a percent)			9.50%		9.50%	9.50%
Principal amount			$ 400,000			$ 413,291
Percentage of note to be sold			95.00%
Percentage of note to be retained			5.00%
Accrued interest		$ 4,700
Early redemption premium fee		20,000
Transaction costs		200
Net interest shortfall		30,700
Loss on extinguishment of debt		(24,000)
Less: 5% retained by the Company						(20,665)
Unamortized debt issuance costs						(3,062)
Total long-term debt						388,299
Net principal						392,600
Estimated fair value						373,000
Principal payment on notes		$ 400,000			$ 399,998	$ 10,730	$ 235,347
9.0% Non-Recourse 2033 Notes
Debt Instrument [Line Items]
Interest rate (as a percent)					9.00%	9.00%
Unamortized debt issuance costs						$ (1,265)
3.25% Convertible Senior Notes Due 2023
Debt Instrument [Line Items]
Proceeds from issuance of debt				$ 222,500
Interest rate (as a percent)				3.25%		3.25%
Principal amount				$ 230,000		$ 230,000
Accrued interest	$ 2,400
Transaction costs				$ 7,500
Loss on extinguishment of debt	3,000
Retirement of debt	$ 230,000
Debt retired (as percent)	100.00%
Unamortized debt issuance costs						(1,965)
Total long-term debt						228,035
Transaction costs	$ 1,600
Principal payment on notes					$ 231,605
3.25% Convertible Senior Notes Due 2023 \| Significant Other Observable Inputs, Level 2
Debt Instrument [Line Items]
Net principal						230,000
Notes fair value						$ 220,200
TRC
Debt Instrument [Line Items]
Percentage of equity interest						85.00%
Percentage of economic interest			85.00%			85.00%
TRC \| Minimum
Debt Instrument [Line Items]
Upward tiering royalties (as a percent)			6.50%
TRC \| Maximum
Debt Instrument [Line Items]
Upward tiering royalties (as a percent)			10.00%
Theravance Biopharma R&D, Inc. \| 9.5% Non-Recourse 2035 Notes
Debt Instrument [Line Items]
Interest rate (as a percent)						5.00%

Organization and Summary of Significant Accounting Policies (Tables)

12 Months Ended

Dec. 31, 2022

Organization and Summary of Significant Accounting Policies.

Schedule of property and equipment useful lives


Leasehold improvements		Shorter of remaining lease terms or useful life
Equipment, furniture and fixtures		5 - 7 years
Software and computer equipment		3 - 5 years

Schedule of basic and diluted net income (loss) per share


	Year Ended December 31,
(In thousands, except per share data)	2022		2021		2020
Numerator:
Net loss from continuing operations	$	(92,824)	$	(265,071)	$	(294,823)
Net income from discontinued operations		964,956		65,645		16,806
Net income (loss)		872,132		(199,426)		(278,017)

Denominator:
Weighted-average ordinary shares outstanding		73,591		69,518		62,808
Less: weighted-average ordinary shares subject to forfeiture		—		(57)		(463)
Weighted-average ordinary shares outstanding - basic and diluted		73,591		69,461		62,345

Net income (loss) per ordinary share:
Continuing operations - basic and diluted	$	(1.26)	$	(3.82)	$	(4.73)
Discontinued operations - basic and diluted	$	13.11	$	0.95	$	0.27
Net income (loss) - basic and diluted	$	11.85	$	(2.87)	$	(4.46)

Schedule of anti-dilutive securities


	Year Ended December 31,
(In thousands)	2022	2021	2020
Share issuances under equity incentive plans and employee share purchase plans	5,487	7,469	6,553
Share issuances upon the conversion of convertible senior notes	—	6,676	6,676
Total	5,487	14,145	13,229

Income Taxes - Components of the income (loss) before income taxes (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2022	Dec. 31, 2021	Dec. 31, 2020
Income Taxes
Income (loss) before provision for income taxes	$ (92,815)	$ (265,222)	$ (303,343)
Cayman Islands
Income Taxes
Income (loss) before provision for income taxes			37,567
United States
Income Taxes
Income (loss) before provision for income taxes	(40,556)	(82,213)	(63,306)
Ireland
Income Taxes
Income (loss) before provision for income taxes	(52,168)	(182,775)	(277,105)
United Kingdom
Income Taxes
Income (loss) before provision for income taxes	$ (91)	$ (234)	$ (499)

Revenue - Viatris Agreement (Details) - USD ($) $ in Thousands	1 Months Ended	3 Months Ended	12 Months Ended
	Feb. 28, 2018	Dec. 31, 2022	Dec. 31, 2022	Dec. 31, 2021	Dec. 31, 2020
Collaborative Arrangements and Co-Promote Agreement
Percentage of profit share			35.00%
Upfront payment receivable			$ 205,000
Collaboration revenue
Collaborative Arrangements and Co-Promote Agreement
Revenues			48,654	$ 43,848	$ 43,893
Revenue from collaborative arrangements			192	11,463	26,464
Revefenacin Monotherapy (TD-4208)
Collaborative Arrangements and Co-Promote Agreement
Upfront payment receivable			160,000
Revefenacin Monotherapy (TD-4208) \| Success Based Development Regulatory And Sales Milestones
Collaborative Arrangements and Co-Promote Agreement
Upfront payment receivable			10,000
Revefenacin Monotherapy (TD-4208) \| Sales milestones
Collaborative Arrangements and Co-Promote Agreement
Upfront payment receivable			150,000
Future potential combination products
Collaborative Arrangements and Co-Promote Agreement
Upfront payment receivable			45,000
YUPELRI Monotherapy
Collaborative Arrangements and Co-Promote Agreement
Upfront payment receivable			$ 160,000
Janssen
Collaborative Arrangements and Co-Promote Agreement
Revenue from collaborative arrangements				11,425	26,426
Janssen \| Development and Commercialization Agreement
Collaborative Arrangements and Co-Promote Agreement
Upfront payment receivable	$ 100,000
Viatris
Collaborative Arrangements and Co-Promote Agreement
Percentage of profit share			65.00%
Viatris \| YUPELRI Monotherapy
Collaborative Arrangements and Co-Promote Agreement
Percentage of profit share			35.00%
Revenues			$ 70,700	56,700	50,000
Viatris \| Non-US YUPELRI
Collaborative Arrangements and Co-Promote Agreement
Royalty Income		$ 30,000
Viatris \| Collaborative Arrangement \| Collaboration revenue
Collaborative Arrangements and Co-Promote Agreement
Revenues			48,624	43,848	43,893
Viatris \| Royalties (Non-US) \| Collaboration revenue
Collaborative Arrangements and Co-Promote Agreement
Revenues			30
Other
Collaborative Arrangements and Co-Promote Agreement
Revenue from collaborative arrangements			$ 192	$ 38	$ 38

Investments and Fair Value Measurements (Tables)

12 Months Ended

Dec. 31, 2022

Investments and Fair Value Measurements

Schedule of available-for-sale securities


		December 31, 2022
				Gross		Gross
		Amortized		Unrealized		Unrealized		Estimated
(In thousands)		Cost		Gains		Losses		Fair Value
US government securities	Level 1	$	24,873	$	8	$	—	$	24,881
US government agency securities	Level 2		20,869		4		—		20,873
Corporate notes	Level 2		—		—		—		—
Commercial paper	Level 2		37,307		—		(27)		37,280
Marketable securities			83,049		12		(27)		83,034
Money market funds	Level 1		220,508		—		—		220,508
Total		$	303,557	$	12	$	(27)	$	303,542


		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


	December 31, 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
Commercial paper	$	37,279	$	(27)	$	—	$	—	$	37,279	$	(27)
Total	$	37,279	$	(27)	$	—	$	—	$	37,279	$	(27)


	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)

Sale of Equity Interests in Theravance Respiratory Company, LLC and Discontinued Operations - Summary of TRC's Statement of income and equity Interest (Details) - USD ($) $ in Thousands		3 Months Ended								12 Months Ended
	Jul. 20, 2022	Dec. 31, 2022	Sep. 30, 2022	Jun. 30, 2022	Mar. 31, 2022	Dec. 31, 2021	Sep. 30, 2021	Jun. 30, 2021	Mar. 31, 2021	Dec. 31, 2022	Dec. 31, 2021	Dec. 31, 2020
Assets
Cash and cash equivalents		$ 298,172				$ 89,959				$ 298,172	$ 89,959	$ 81,467
Total assets		607,400				374,819				607,400	374,819
Liabilities and LLC Members' Equity
Total liabilities and shareholders' equity (deficit)		607,400				374,819				607,400	374,819
Revenue:
Total revenue		14,649	$ 12,451	$ 11,050	$ 13,196	14,946	$ 13,194	$ 12,914	$ 14,257	51,346	55,311	71,857
Collaboration revenue
Revenue:
Total revenue										192	11,463	26,464
TRC
Assets
Total assets	$ 72,029					130,971					130,971
Liabilities and LLC Members' Equity
Total liabilities and shareholders' equity (deficit)	72,029					130,971					130,971
Revenue:
Total revenue	72,029										126,688	83,090
General and administrative expenses	332										3,956	2,613
Other income, net	10											38
Changes in fair value of equity and long-term investments, net	(8,884)										(1,541)	1,147
Realized loss on equity and long-term investments	(39,385)
Net Income	23,438										121,191	81,662
TRC \| Royalties
Revenue:
Total revenue	72,029										126,688	73,090
TRC \| Collaboration revenue
Revenue:
Total revenue												$ 10,000
TRC
Assets
Related party receivables from collaborative arrangements		$ 0				43,500				$ 0	43,500
TRC \| TRC
Assets
Cash and cash equivalents	29,309					50,713					50,713
Related party receivables from collaborative arrangements	42,720					42,492					42,492
Prepaid expenses and other current assets						71					71
Equity and long-term investments						37,695					37,695
Liabilities and LLC Members' Equity
Accrued liabilities						252					252
LLC members' equity	$ 72,029					$ 130,719					$ 130,719

Share-Based Compensation

12 Months Ended

Dec. 31, 2022

Share-Based Compensation

Share-Based Compensation

12. Share-Based Compensation

Theravance Biopharma Equity Plans

The Company has three equity compensation plans — its 2013 Equity Incentive Plan (the “2013 EIP”), its 2013 Employee Share Purchase Plan (the “2013 ESPP”) and its 2014 New Employee Equity Incentive Plan (the “2014 NEEIP”). At inception, the Company was authorized to issue 5,428,571 ordinary shares under the 2013 EIP, 857,142 ordinary shares under the 2013 ESPP, and 750,000 ordinary shares under the 2014 NEEIP.

The 2013 EIP provides for the issuance of share-based awards, including restricted shares, restricted share units, options, share appreciation rights (“SARs”) and other equity-based awards, to Company employees, officers, directors and consultants. As of January 1 of each year, commencing on January 1, 2015 and ending on (and including)

January 1, 2023, subject to extension by shareholder approval, the aggregate number of ordinary shares that may be issued under the 2013 EIP shall automatically increase by a number equal to the least of 5% of the total number of ordinary shares outstanding on December 31 of the prior year, 3,428,571 ordinary shares, or a number of ordinary shares determined by the Company’s board of directors. Options may be granted with an exercise price not less than the fair market value of the ordinary shares on the grant date. Under the terms of the Company’s 2013 EIP, options granted to employees generally have a maximum term of 10 years and vest over a four-year period from the date of grant; 25% vest at the end of one year, and 75% vest monthly over the remaining three years. The Company may grant options with different vesting terms from time to time. Unless an employee’s termination of service is due to disability or death, upon termination of service, any unexercised vested options will generally be forfeited at the end of three months or the expiration of the option, whichever is earlier.

Under the 2013 ESPP, the Company’s officers and employees may purchase ordinary shares through payroll deductions at a price equal to 85% of the lower of the fair market value of the ordinary share at the beginning of the offering period or at the end of each applicable purchase period. As of January 1 of each year, commencing on January 1, 2015 and ending on (and including) January 1, 2033, the aggregate number of ordinary shares that may be issued under the 2013 ESPP shall automatically increase by a number equal to the least of 1% of the total number of ordinary shares outstanding on December 31 of the prior year, 571,428 ordinary shares or a number of ordinary shares determined by the Company’s board of directors. The ESPP generally provides for consecutive and overlapping offering periods of 24 months in duration, with each offering period generally composed of four consecutive six-month purchase periods. The purchase periods end on either May 15 or November 15. ESPP contributions are limited to a maximum of 15% of an employee’s eligible compensation. The 2013 ESPP also includes a feature that provides for the existing offering period to terminate and for participants in that offering period to automatically be enrolled in a new offering period when the fair market value of an ordinary share at the beginning of a subsequent offering period falls below the fair market value of an ordinary share on the first day of such offering period.

The 2014 NEEIP provides for the issuance of share-based awards, including restricted shares, restricted share units, non-qualified options and SARs, to the Company’s employees. Options may be granted with an exercise price not less than the fair market value of the ordinary shares on the grant date. Under the terms of the 2014 NEEIP, options granted to employees generally have a maximum term of 10 years and vest over a four-year period from the date of grant; 25% vest at the end of one year, and 75% vest monthly over the remaining three years. The Company may grant options with different vesting terms from time to time. Unless an employee’s termination of service is due to disability or death, upon termination of service, any unexercised vested options will generally be forfeited at the end of three months or the expiration of the option, whichever is earlier.

Performance-Contingent Awards

In 2016, the Compensation Committee of the Company’s board of directors (“Compensation Committee”) approved the grant of 1,575,000 performance-contingent restricted share awards (“RSAs”) and 135,000 performance-contingent restricted share units (“RSUs”) to senior management. The vesting of such awards was dependent on the Company meeting its critical operating goals and objectives during the five-year period from 2016 to December 2020, as well as, continued employment. The awards were broken into three separate tranches, and expenses associated with these awards were recognized during the years 2016 to 2020 as the performance conditions were achieved. As of the first quarter of 2020, the performance conditions associated with all three tranches were achieved. The Company recognized $0.4 million and $3.0 million of share-based compensation expense associated with these awards for the year ended December 31, 2021 and 2020, respectively, and the expenses associated with these awards have been fully recognized as of December 31, 2021.

Separate from the performance-contingent awards described above, the Company periodically grants performance-contingent RSUs to employees. For the year ended December 31, 2022, 2021, and 2020, the Company recognized $0.2 million, $0.4 million, and $1.0 million, respectively, of share-based compensation expense related to such awards. As of December 31, 2022, there were 43,000 shares of these performance-contingent RSUs outstanding that have a maximum remaining share-based compensation expense of $0.4 million with performance expiration dates through February 2024.

Share-Based Compensation Modifications Due to Corporate Restructuring

As a result of the Company’s corporate restructuring announcement in September 2021 (see “Note 16. Corporate Restructuring Completion”), 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). In 2021, the modification resulted in a fair value of $5.6 million that was recorded in “Restructuring and related expenses” within the consolidated statements of operations for the year ended December 31, 2021. The total cumulative compensation cost previously recognized for these modified awards of $2.8 million was reversed in the year ended December 31, 2021 within “Research and development” and “Selling, general and administrative” expenses. The acceleration resulted in a net incremental share-based compensation expense of $2.8 million for the year ended December 31, 2021, and impacted approximately 160 terminated employees that met the conditions of the acceleration.

In 2022, the Company completed the second phase of the restructuring that resulted in a Type 3 modification fair value of $2.5 million which was recorded in “Restructuring and related expenses” within the consolidated statements of operations for the year ended December 31, 2022. The total cumulative compensation cost previously recognized for these modified awards of $0.8 million was reversed in the year ended December 31, 2022 within “Research and development” and “Selling, general and administrative” expenses. The acceleration resulted in a net incremental share-based compensation expense of $1.7 million for the year ended December 31, 2022, and impacted approximately 40 terminated employees that met the conditions of the acceleration.

Share-Based Compensation Expense

Share-based compensation expense included in the consolidated statements of operations was recognized as follows:


	Year Ended December 31,
(In thousands)	2022		2021		2020
Research and development	$	12,888	$	25,634	$	31,294
Selling, general and administrative		19,848		28,065		31,682
Restructuring and related expenses		6,998		8,362		—
Total share-based compensation expense	$	39,734	$	62,061	$	62,976

Share-based compensation expense included in the consolidated statements of operations by award type was as follows:


	Year Ended December 31,
(In thousands)	2022		2021		2020
Options	$	2,998	$	5,473	$	6,536
RSUs		35,726		54,931		49,803
Performance RSAs and RSUs		237		763		3,943
ESPP		773		894		2,694
Total share-based compensation expense	$	39,734	$	62,061	$	62,976

As of December 31, 2022, the unrecognized share-based compensation cost, net of actual forfeitures, and the estimated weighted-average amortization period, using the straight-line attribution method, was as follows:


	Unrecognized		Weighted‑Average
	Compensation		Amortization Period
(In thousands, except amortization period)	Cost		(Years)
Options	$	3,453	2.75
RSUs		39,721	2.50
Performance RSAs and RSUs ⁽¹⁾		—	0.64
ESPP		229	0.51
Total	$	43,403

(1)	Represents unrecognized share-based compensation cost associated with the Company’s performance-contingent awards described above that are probable of vesting.

Compensation Awards

The following table summarizes option activity under the 2013 EIP and 2014 NEEIP for the year ended December 31, 2022:


			Weighted-Average
	Number of Shares	Weighted-Average	Exercise Price of			Aggregate
	Subject to	Remaining Contractual	Outstanding Options			Intrinsic Value
	Outstanding Options	Term (Years)	(in dollars)			(in thousands)
Outstanding at December 31, 2021	2,871,568		$	24.62
Granted	753,400			10.19
Exercised	—			-
Forfeited	(1,213,075)			25.69
Outstanding at December 31, 2022	2,411,893	5.24		19.53	$	775
Exercisable at December 31, 2022		3.69				142
Vested and expected to vest at December 31, 2022		5.24				775

The following table summarizes additional information for options under the 2013 EIP and 2014 NEEIP.


	2022		2021		2020
Weighted average fair value of options (in dollars)	$	5.33	$	9.25	$	11.03
Total intrinsic value of options exercised (in thousands)	$	—	$	1	$	384

The following table summarizes total RSU and RSA activity (including performance RSUs and RSAs) for the year ended December 31, 2022:


	Number of Shares	Number of Shares
	Subject to	Outstanding Subject to
	Outstanding RSUs	Performance Conditions (RSAs)
Outstanding at December 31, 2021	8,353,849	—
Granted	648,065	—
Released	(3,766,876)	—
Forfeited	(1,125,191)	—
Outstanding at December 31, 2022	4,109,847	—

The total estimated fair value of RSUs vested was $37.2 million and $49.3 million in 2022 and 2021, respectively.

Valuation Assumptions

The range of assumptions used to estimate the fair value of options granted and rights granted under the 2013 ESPP was as follows:


	Year Ended December 31,
	2022		2021		2020
Options
Risk-free interest rate		1.5% - 3.8%		0.5% - 1.2%		0.3% - 1.7%
Expected term (in years)		5.3 - 6.1		5.3 - 6.1		5.2 - 6.1
Volatility		55% - 70%		52% - 53%		50% - 53%
Dividend yield		—		—		—
Weighted-average estimated fair value	$	5.33	$	9.25	$	11.03
2013 ESPP
Risk-free interest rate		1.5% - 4.57%		0.03% - 0.2%		0.1% - 0.2%
Expected term (in years)		0.5 - 2.0		0.5 - 2.0		0.5 - 2.0
Volatility		41% - 72%		40% - 79%		53% - 76%
Dividend yield		—		—		—
Weighted-average estimated fair value	$	3.86	$	3.52	$	8.04

CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands	Dec. 31, 2022	Dec. 31, 2021
Current assets:
Cash and cash equivalents	$ 298,172	$ 89,959
Short-term marketable securities	29,312	83,506
Receivables from collaborative arrangements	16,785	14,065
Prepaid clinical and development services	1,513	10,245
Other prepaid and current assets	7,682	8,561
Amounts due from TRC, LLC (Discontinued operations)		43,534
Total current assets	353,464	249,870
Property and equipment, net	11,875	13,657
Operating lease assets	40,126	39,690
Future contingent milestone and royalty assets	194,200
Restricted cash	836	837
Other assets	6,899	3,228
Equity in net assets of TRC, LLC (Discontinued operations)		67,537
Total assets	607,400	374,819
Current liabilities:
Accounts payable	1,554	3,098
Accrued personnel-related expenses	10,314	12,796
Accrued clinical and development expenses	4,932	17,010
Accrued general and administrative expenses	4,020	2,898
Operating lease liabilities	6,753	503
Deferred revenue	24	98
Other accrued liabilities	1,118	1,304
Accrued interest payable		1,246
Current portion of non-recourse notes due 2035, net (Discontinued operations)		16,940
Accrued interest payable (Discontinued operations)		2,694
Total current liabilities	28,715	58,587
Long-term operating lease liabilities	45,407	52,681
Future royalty payment contingency	25,438
Long-term deferred revenue	192	310
Unrecognized tax benefits	64,191	240
Other long-term liabilities	1,657	2,180
Convertible senior notes due 2023, net		228,035
Non-recourse notes due 2035, net		371,359
Commitments and contingencies
Shareholders' Equity (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; [65,227] and 74,435 shares issued and outstanding at December 31, 2022 and December 31, 2021, respectively	1	1
Additional paid-in capital	1,295,725	1,387,469
Accumulated other comprehensive loss	(15)
Accumulated deficit	(853,911)	(1,726,043)
Total shareholders' equity (deficit)	441,800	(338,573)
Total liabilities and shareholders' equity (deficit)	$ 607,400	$ 374,819

Sale of Equity Interests in Theravance Respiratory Company, LLC and Discontinued Operations (Details)			12 Months Ended
	Jul. 20, 2022 USD ($) shares	Feb. 21, 2020	Dec. 31, 2022 USD ($)	Dec. 31, 2021 USD ($)	Dec. 31, 2020 USD ($)
Theravance Respiratory Company, LLC
Future contingent milestone and royalty assets			$ 194,200,000
Royalty Pharma \| Disposed of by Sale \| TRC
Theravance Respiratory Company, LLC
Net gain from sale of equity interests in TRC, LLC	$ 1,141,100,000		1,141,084,000
Consideration received	1,301,600,000
Proceeds from the sale of equity interest in TRC, LLC	1,107,400,000
Equity method investments	136,700,000
Future contingent milestone and royalty assets	194,200,000
Transaction costs	23,800,000
Income from investments in TRC, LLC			53,237,000	$ 103,987,000	$ 68,438,000
Investment Amount	$ 136,700,000
Royalty Pharma \| Disposed of by Sale \| TRC \| Measurement Input, Discount Rate [Member]
Theravance Respiratory Company, LLC
Equity method investment, contingent consideration	0.0783
Royalty Pharma \| Purchase Agreement to Sell Units in Theravance Respiratory Company, LLC
Theravance Respiratory Company, LLC
Percentage of Right to Receive Royalty Transferring	85
Proceeds from sale of units.	$ 1,100,000,000
Consideration Receivable at closing	$ 250,000,000.0
Royalty Pharma \| Class B Units \| Purchase Agreement to Sell Units in Theravance Respiratory Company, LLC
Theravance Respiratory Company, LLC
Units issued \| shares	2,125
Royalty Pharma \| Class C Units \| Purchase Agreement to Sell Units in Theravance Respiratory Company, LLC
Theravance Respiratory Company, LLC
Units issued \| shares	6,375
TRC
Theravance Respiratory Company, LLC
Percentage of equity interest				85.00%
Percentage of economic interest		85.00%		85.00%
Equity method investments			0	$ 67,500,000
Income from investments in TRC, LLC			53,200,000	104,000,000.0	$ 68,400,000
Due form TRC			0	43,500,000
Investment Amount			$ 0	$ 67,500,000
Number of fiscal quarters				4
Theravance
Theravance Respiratory Company, LLC
Consideration Receivable at closing	$ 1,326,600,000

Share-Based Compensation - Compensation Awards (Details) - 2013 EIP and 2014 NEEIP - USD ($) $ / shares in Units, $ in Thousands	12 Months Ended
	Dec. 31, 2022	Dec. 31, 2021	Dec. 31, 2020
Number of Shares Subject To Outstanding Options
Balance at the beginning of the year	2,871,568
Granted ( in shares)	753,400
Forfeited (in shares)	(1,213,075)
Balance at the end of the year	2,411,893	2,871,568
Weighted-Average Exercise Price of Outstanding Options
Balance at the beginning of the year (in dollars per share)	$ 24.62
Granted (in dollars per share)	10.19
Forfeited (in dollars per share)	25.69
Balance at the end of the year (in dollars per share)	$ 19.53	$ 24.62
Additional disclosures
Weighted-Average Remaining Contractual Term (Years), Outstanding	5 years 2 months 26 days
Weighted-Average Remaining Contractual Term (Years), Exercisable	3 years 8 months 8 days
Weighted-Average Remaining Contractual Term (Years), Vested and expected to vest	5 years 2 months 26 days
Aggregate intrinsic value of options outstanding	$ 775
Aggregate intrinsic value of options exercisable	$ 142
Weighted-average estimated fair value (in dollars per share)	$ 5.33	$ 9.25	$ 11.03
Aggregate intrinsic value of vested or expected to vest	$ 775
Total intrinsic value of options exercised		$ 1	$ 384

Cash, Cash Equivalents, and Restricted Cash (Tables)

12 Months Ended

Dec. 31, 2022

Cash, Cash Equivalents, and Restricted Cash

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


	December 31,
(In thousands)	2022		2021		2020
Cash and cash equivalents	$	298,172	$	89,959	$	81,467
Restricted cash		836		837		833
Total cash, cash equivalents, and restricted cash shown on the consolidated statements of cash flows	$	299,008	$	90,796	$	82,300

Leases - Lease Cost (Details) - USD ($) $ in Thousands	12 Months Ended
Leases - Lease Cost (Details) - USD ($) $ in Thousands	Dec. 31, 2022	Dec. 31, 2021	Dec. 31, 2020
Lessee, Lease, Description [Line Items]
Operating lease expense	$ 8,314	$ 7,625	$ 8,732
Selling, general and administrative
Lessee, Lease, Description [Line Items]
Operating lease expense	8,314	6,248	7,974
Operating sublease income	$ 5,420	466
Research and development
Lessee, Lease, Description [Line Items]
Operating lease expense		$ 1,377	$ 758

Organization and Summary of Significant Accounting Policies - GSK Notes (Details) - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2021	Dec. 31, 2020
Member board of directors
Fees incurred related to related party	$ 0.5	$ 0.5

Income Taxes

12 Months Ended

Dec. 31, 2022

Income Taxes

Income Taxes

13. Income Taxes

Theravance Biopharma was incorporated in the Cayman Islands in July 2013 under the name Theravance Biopharma, Inc. as a wholly-owned subsidiary of Innoviva and began operations subsequent to a spin-off with wholly-owned subsidiaries in the Cayman Islands, US, United Kingdom, and Ireland. Effective July 1, 2015, Theravance Biopharma became an Irish tax resident, therefore, the income (loss) before income taxes of Theravance Biopharma, the parent company, are included in Ireland in the tables below.

The components of the income (loss) before income taxes from continuing operations were as follows:


	Year Ended December 31,
(In thousands)	2022		2021		2020
Income (loss) before provision for income taxes:
Cayman Islands	$	—	$	—	$	37,567
United States		(40,556)		(82,213)		(63,306)
Ireland		(52,168)		(182,775)		(277,105)
United Kingdom		(91)		(234)		(499)
Total	$	(92,815)	$	(265,222)	$	(303,343)

The components of provision for income tax (expense) benefit from continuing operations were as follows:


	Year Ended December 31,
(In thousands)	2022			2021			2020
Provision for income tax (expense) benefit:
Current:
Cayman Islands	$	—		$	—		$	—
United States		—			173			8,545
Ireland		(8)			(8)			(13)
United Kingdom		(1)			(14)			(12)
Subtotal		(9)			151			8,520
Deferred:
Cayman Islands		—			—			—
United States		—			—			—
Ireland		—			—			—
United Kingdom		—			—			—
Subtotal		—			—			—
Total	$	(9)		$	151		$	8,520
Effective tax rate		(0.01)	%		0.06	%		2.81	%

The provision for income tax (expense) benefit from continuing operations was nil, $0.2 million, and $8.5 million for the year ended December 31, 2022, 2021, and 2020, respectively.

Income tax expense for the year ended December 31, 2022 of $179.0 million was a result of the Company’s gain from the TRC Transaction, which was recognized as a discontinued operation. The 2021 and 2020 net income tax benefit was primarily attributed to a reversal of previously accrued contingent tax liabilities for uncertain tax positions due to a lapse of the statute of limitations.

The Company’s $64.0 million liability for unrecognized tax benefits can be relieved only if (i) the contingency becomes legally extinguished through either payment to the taxing authority or expiration of the statute of limitations; (ii) the recognition of the benefits associated with the position meets the more-likely-than-not threshold; or (iii) the liability becomes effectively settled through the examination process. The Company considers matters to be effectively settled once the taxing authority has completed all of its required or expected examination procedures, including all appeals and administrative reviews. The Company also accrues for potential interest and penalties related to unrecognized tax benefits in its income tax expense (benefit) calculation.

As of December 31, 2022, the amount of uncertain tax benefit, that if realized would affect the effective tax rate, was $76.0 million and is primarily due to transfer pricing adjustments related to share-based compensation.

No provision for income taxes has been recognized on undistributed earnings of the Company’s foreign subsidiaries because it considers such earnings to be indefinitely reinvested. In the event of a distribution of these earnings in the form of dividends or otherwise, the Company may be liable for income taxes, subject to an adjustment, if any, for foreign tax credits and foreign withholdings taxes payable to certain foreign tax authorities. As of December 31, 2022, there were no undistributed earnings.

As a result of the Company becoming an Irish tax resident effective July 1, 2015, the tax rates reflect the Irish statutory rate of 25%. The differences between the Irish statutory income tax rate for non-trading income and the Company’s effective tax rates from continuing operations were as follows:


	Year Ended December 31,
	2022		2021		2020
Provision at statutory income tax rate	25.00	%	25.00	%	25.00	%
Foreign rate differential	(6.80)		(8.50)		(11.02)
Share-based compensation	(3.28)		(3.11)		0.71
Non-deductible executive compensation	(2.79)		(1.22)		(0.60)
Uncertain tax positions	(7.10)		(3.95)		(1.19)
Research and development tax credit carryforwards	2.65		1.79		1.73
Intangible asset	—		1.83		9.45
Change in valuation allowance	(1.01)		(11.34)		(20.62)
Other	(6.68)		(0.44)		(0.65)
Effective tax rate	(0.01)	%	0.06	%	2.81	%

Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. Significant components of the Company’s deferred tax assets and liabilities were as follows:


	December 31,
(In thousands)	2022			2021
Deferred tax assets:
Net operating loss carryforwards	$	104,236	$	115,606
Capital loss carryforwards		19,409		19,409
Research and development tax credit carryforwards		16,176		28,372
Fixed assets and intangibles		283,260		287,177
Share-based compensation		4,298		10,432
Accruals		1,795		3,590
Operating lease liabilities		11,239		11,607
Prepaid assets		304		—
Other		30		10,505
Subtotal		440,747		486,698
Valuation allowance		(422,325)		(477,868)
Total deferred tax assets		18,422		8,830

Deferred tax liabilities:
Operating lease assets		(8,634)		(8,575)
Future contingent milestone and royalty assets		(11,725)		—
Prepaid assets		—		(255)
Total deferred tax liabilities		(20,359)		(8,830)
Net deferred tax assets (liabilities)	$	(1,937)	$	—

The Company follows the accounting guidance related to accounting for income taxes which requires that a company reduces 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. During the year ended December 31, 2022, the Company concluded that the valuation allowance related to its US federal assets was no longer needed primarily due to the current year gain and forecasted future taxable income from the TRC Transaction. As of December 31, 2022, the Company released its valuation allowance against deferred tax assets for US federal tax purposes as it is more like than not able to fully utilize such attributes. As of December 31, 2022, the Company continues to maintain a full valuation allowance in other jurisdictions.

The valuation allowance as of December 31, 2022 decreased from $477.9 million, as of December 31, 2021, to $422.3 million, primarily as a result of utilization of the Company’s federal net operating losses and research tax credits generated in the US offset by additional tax loss generated in various jurisdictions during the current year.

As of December 31, 2022, the Company has utilized all available US federal net operating loss carryforwards and federal research and development tax credit carryforwards. As of December 31, 2022, the Company had state net operating loss carryforwards of $102.7 million which will begin to expire in 2034 and state research and development credit carryforwards of $25.4 million to be carried forward indefinitely.

The Company also had Irish net operating loss carryforwards of $786.2 million with no expiration date and capital loss carryforwards of $58.8 million to be carried forward indefinitely.

Utilization of net operating loss and tax credit carryforwards may be subject to an annual limitation due to ownership change limitations provided by the Internal Revenue Code and similar state provisions. Annual limitations may result in expiration of net operating loss and tax credit carryforwards before some or all of such amounts have been utilized.

Uncertain Tax Positions

A reconciliation of the beginning and ending balances of the total amounts of unrecognized tax benefits were as follows:


(In thousands)
Unrecognized tax benefits as of December 31, 2020	$	63,447
Gross decrease in tax positions for prior years		(395)
Gross increase in tax positions for current year		11,971
Unrecognized tax benefits as of December 31, 2021		75,023
Gross decrease in tax positions for prior years		(7,395)
Gross increase in tax positions for current year		8,371
Unrecognized tax benefits as of December 31, 2022	$	75,999

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’s policy is to recognize interest and penalties related to income tax matters in income tax expense. The amount of tax expense related to interest and penalties was not material for the year ended December 31, 2022 and 2021.

The total unrecognized tax benefits of $76.0 million and $75.0 million, as of December 31, 2022 and December 31, 2021, respectively, may reduce the effective tax rate in the period of recognition. The Company does not expect to record any other material reductions in the measurement of its unrecognized tax benefits within the next twelve months.

The Company is subject to taxation in Ireland, the US, and various other jurisdictions. The tax years 2015 and forward remain open to examination in Ireland, tax years 2015 and forward remain open to examination in the US, and the tax years 2012 and forward remain open to examination in other jurisdictions.

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.

On August 16, 2022, President Biden signed into law the Inflation Reduction Act (“IRA”). The provisions include the new Corporate Alternative Minimum Tax (“CAMT”), an excise tax on stock buybacks, and significant tax

incentives for energy and climate initiatives, and all of these provisions are effective for tax year 2023. The Company will evaluate the impact of these provisions, but it currently does not expect the enactment of these provisions to have a material impact on the Company.

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 and other transactions, 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 https://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 https://asc.fasb.org/extlink&oid=122134291&loc=d3e330215-122817

Reference 3: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 740
-SubTopic 10
-Section 50
-Paragraph 17
-Subparagraph (b)
-URI https://asc.fasb.org/extlink&oid=121826272&loc=d3e32809-109319

Reference 4: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 740
-SubTopic 10
-Section S99
-Paragraph 1
-Subparagraph (SAB TOPIC 6.I.5.Q1)
-URI https://asc.fasb.org/extlink&oid=122134291&loc=d3e330036-122817

Reference 5: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 740
-SubTopic 10
-Section 50
-Paragraph 14
-URI https://asc.fasb.org/extlink&oid=121826272&loc=d3e32705-109319

Reference 6: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 740
-SubTopic 270
-Section 50
-Paragraph 1
-URI https://asc.fasb.org/extlink&oid=6424409&loc=d3e44925-109338

Reference 7: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 740
-URI https://asc.fasb.org/topic&trid=2144680

Reference 8: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 740
-SubTopic 30
-Section 50
-Paragraph 2
-Subparagraph (a)
-URI https://asc.fasb.org/extlink&oid=6424122&loc=d3e41874-109331

Reference 9: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 235
-SubTopic 10
-Section S99
-Paragraph 1
-Subparagraph (SX 210.4-08(h)(2))
-URI https://asc.fasb.org/extlink&oid=120395691&loc=d3e23780-122690

+ Details

Organization and Summary of Significant Accounting Policies - Future Contingent Milestone and Royalty Assets (Details) - USD ($) $ in Thousands	Dec. 31, 2022	Jul. 20, 2022
Schedule of Equity Method Investments [Line Items]
Future contingent milestone and royalty assets	$ 194,200
Royalty Pharma \| Disposed of by Sale \| TRC
Schedule of Equity Method Investments [Line Items]
Future contingent milestone and royalty assets		$ 194,200

Income Taxes - Irish statutory rate reconciliation (Details)	12 Months Ended
	Dec. 31, 2022	Dec. 31, 2021	Dec. 31, 2020
The differences between the U.S. federal statutory income tax rate to the Company's effective tax rate
Effective tax rate (as a percent)	(0.01%)	0.06%	2.81%
Ireland
The differences between the U.S. federal statutory income tax rate to the Company's effective tax rate
Provision at statutory income tax rate (as a percent)	25.00%	25.00%	25.00%
Foreign rate differential (as a percent)	(6.80%)	(8.50%)	(11.02%)
Share-based compensation (as a percent)	(3.28%)	(3.11%)	0.71%
Non-deductible executive compensation (as a percent)	(2.79%)	(1.22%)	(0.60%)
Uncertain tax positions (as a percent)	(7.10%)	(3.95%)	(1.19%)
Research and development tax credit carryforwards (as a percent)	2.65%	1.79%	1.73%
Intangible asset		1.83%	9.45%
Change in valuation allowance (as a percent)	(1.01%)	(11.34%)	(20.62%)
Other (as a percent)	(6.68%)	(0.44%)	(0.65%)
Effective tax rate (as a percent)	(0.01%)	0.06%	2.81%

Organization and Summary of Significant Accounting Policies (Policies)

12 Months Ended

Dec. 31, 2022

Organization and Summary of Significant Accounting Policies.

Basis of Presentation

Principles of Consolidation

Use of Estimates

Segment Reporting

Cash and Cash Equivalents

The Company considers all highly-liquid investments purchased with a maturity of three months or less on the date of purchase to be cash equivalents. Cash equivalents are carried at fair value.

Restricted Cash

Investments in Marketable Securities

Fair Value of Financial Instruments

Level 1 —

Quoted prices for identical instruments in active markets.

Level 2 —

Level 3 —

Unobservable inputs and little, if any, market activity for the assets.

Receivables from Collaborative Arrangements

collateral. For the periods presented, the Company did not have any material write-offs of receivables from collaborative arrangements.

Concentration of Credit Risks

Property and Equipment

Property, equipment and leasehold improvements are stated at cost, net of accumulated depreciation, and amortized using the straight-line method as follows:


Leasehold improvements		Shorter of remaining lease terms or useful life
Equipment, furniture and fixtures		5 - 7 years
Software and computer equipment		3 - 5 years

Leases

Future Contingent Milestone and Royalty Assets

Future Royalty Payment Contingency

Revenue Recognition

Collaborative Arrangements under ASC 606

Research and Development Expenses

As part of the process of preparing its consolidated financial statements, the Company is required to estimate and accrue certain R&D expenses. This process involves the following:

•

estimating and accruing expenses in the Company’s consolidated financial statements as of each balance sheet date based on facts and circumstances known to it at the time; and

•

periodically confirming the accuracy of the Company’s estimates with selected service providers and making adjustments, if necessary.

Examples of estimated R&D expenses that the Company may accrue include:

•

fees paid to clinical research organizations (“CROs”) in connection with preclinical and toxicology studies and clinical studies;

•

fees paid to investigative sites in connection with clinical studies;

•

fees paid to contract manufacturing organizations (“CMOs”) in connection with the production of product and clinical study materials; and

•

professional service fees for consulting and related services.

Advertising Expenses

Fair Value of Share-Based Compensation Awards

Debt Instruments

Income Taxes

Net Income (Loss) per Share


	Year Ended December 31,
(In thousands, except per share data)	2022		2021		2020
Numerator:
Net loss from continuing operations	$	(92,824)	$	(265,071)	$	(294,823)
Net income from discontinued operations		964,956		65,645		16,806
Net income (loss)		872,132		(199,426)		(278,017)

Denominator:
Weighted-average ordinary shares outstanding		73,591		69,518		62,808
Less: weighted-average ordinary shares subject to forfeiture		—		(57)		(463)
Weighted-average ordinary shares outstanding - basic and diluted		73,591		69,461		62,345

Net income (loss) per ordinary share:
Continuing operations - basic and diluted	$	(1.26)	$	(3.82)	$	(4.73)
Discontinued operations - basic and diluted	$	13.11	$	0.95	$	0.27
Net income (loss) - basic and diluted	$	11.85	$	(2.87)	$	(4.46)

Anti-dilutive Securities


	Year Ended December 31,
(In thousands)	2022	2021	2020
Share issuances under equity incentive plans and employee share purchase plans	5,487	7,469	6,553
Share issuances upon the conversion of convertible senior notes	—	6,676	6,676
Total	5,487	14,145	13,229

Comprehensive Income (Loss)

Comprehensive income (loss) is comprised of net income (loss) and changes in unrealized gains and losses on the Company’s available-for-sale investments.

CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) shares in Thousands, $ in Thousands	12 Months Ended
	Dec. 31, 2022	Dec. 31, 2021	Dec. 31, 2020
Revenue:
Total revenue	$ 51,346	$ 55,311	$ 71,857
Expenses:
Research and development (1)	63,392	193,657	260,953
Selling, general and administrative (1)	67,073	99,296	108,531
Restructuring and related expenses (1)	12,838	20,142
Total expenses	143,303	313,095	369,484
Loss from operations	(91,957)	(257,784)	(297,627)
Interest expense	(6,369)	(8,547)	(8,547)
Loss on extinguishment of debt	(3,034)
Interest income and other income, net	8,545	1,109	2,831
Loss from continuing operations before income taxes	(92,815)	(265,222)	(303,343)
Provision for income tax (expense) benefit	(9)	151	8,520
Net loss from continuing operations	(92,824)	(265,071)	(294,823)
Income from discontinued operations before income taxes	1,143,930	65,645	16,806
Provision for income tax expense	(178,974)
Net income from discontinued operations	964,956	65,645	16,806
Net income (loss)	$ 872,132	$ (199,426)	$ (278,017)
Net income (loss) per share:
Continuing operations - basic	$ (1.26)	$ (3.82)	$ (4.73)
Continuing operations - diluted	(1.26)	(3.82)	(4.73)
Discontinued operations - basic	13.11	0.95	0.27
Discontinued operations - diluted	13.11	0.95	0.27
Net income (loss) - basis	11.85	(2.87)	(4.46)
Net income (loss) - diluted	$ 11.85	$ (2.87)	$ (4.46)
Shares used to compute basis and diluted net income (loss) per share	73,591	69,461	62,345
Shares used to compute basis and diluted net income (loss) per share	73,591	69,461	62,345
Total share-based compensation expense	$ 39,734	$ 62,061	$ 62,976
Research and development
Expenses:
Restructuring and related expenses (1)	5,900	10,600
Net income (loss) per share:
Total share-based compensation expense	12,888	25,634	31,294
Selling, general and administrative
Expenses:
Restructuring and related expenses (1)	6,900	9,500
Net income (loss) per share:
Total share-based compensation expense	19,848	28,065	31,682
Restructuring and related expenses
Net income (loss) per share:
Total share-based compensation expense	6,998	8,362
Viatris collaboration agreement
Revenue:
Total revenue	48,624	43,848	43,893
Viatris royalties (Non-US)
Revenue:
Total revenue	30
Collaboration revenue
Revenue:
Total revenue	192	$ 11,463	26,464
Licensing revenue
Revenue:
Total revenue	$ 2,500		$ 1,500

Sale of Equity Interests in Theravance Respiratory Company, LLC and Discontinued Operations - Summary of discontinued operations (Details) - USD ($) $ in Thousands		12 Months Ended
	Jul. 20, 2022	Dec. 31, 2022	Dec. 31, 2021	Dec. 31, 2020	Feb. 21, 2020
Schedule of Equity Method Investments [Line Items]
Provision for income tax expense		$ (178,974)
Total net income from discontinued operations		$ 964,956	$ 65,645	$ 16,806
9.5% Non-Recourse 2035 Notes
Schedule of Equity Method Investments [Line Items]
Interest rate (as a percent)		9.50%	9.50%		9.50%
9.0% Non-Recourse 2033 Notes
Schedule of Equity Method Investments [Line Items]
Interest rate (as a percent)		9.00%	9.00%
Disposed of by Sale \| TRC \| Royalty Pharma
Schedule of Equity Method Investments [Line Items]
Income from investments in TRC, LLC		$ 53,237	$ 103,987	68,438
Transaction-related legal expenses (prior to July 20, 2022)		(5,057)
Loss on extinguishment of debt		(24,022)		(15,464)
Net gain from sale of equity interests in TRC, LLC	$ 1,141,100	1,141,084
Provision for income tax expense		(178,974)
Total net income from discontinued operations		964,956	65,645	16,806
Disposed of by Sale \| TRC \| Royalty Pharma \| 9.5% Non-Recourse 2035 Notes
Schedule of Equity Method Investments [Line Items]
Interest expenses		$ (21,312)	$ (38,342)	(32,193)
Disposed of by Sale \| TRC \| Royalty Pharma \| 9.0% Non-Recourse 2033 Notes
Schedule of Equity Method Investments [Line Items]
Interest expenses				$ (3,975)

Revenue - Other Collaborative Arrangement Revenues (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2022	Dec. 31, 2021	Dec. 31, 2020
Janssen
Collaboration revenue recognized in the period from:
Revenue from collaborative arrangements		$ 11,425	$ 26,426
Other
Collaboration revenue recognized in the period from:
Revenue from collaborative arrangements	$ 192	38	38
Collaboration revenue
Collaboration revenue recognized in the period from:
Revenue from collaborative arrangements	$ 192	$ 11,463	$ 26,464

Organization and Summary of Significant Accounting Policies - Segment Reporting (Details)	12 Months Ended
	Dec. 31, 2021 segment
Organization and Summary of Significant Accounting Policies.
Number of business segments	1

Revenue - Reimbursement of R and D Costs (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2022	Dec. 31, 2021	Dec. 31, 2020
Research and Development Reimbursement
Total reduction to R and D expense	$ 6,682	$ 7,891	$ 10,078
Viatris
Research and Development Reimbursement
Total reduction to R and D expense	$ 6,682	2,072	1,524
Janssen
Research and Development Reimbursement
Total reduction to R and D expense		$ 5,819	$ 8,554