0001558370-23-008951 | 10-Q | XBRL Viewer

Three Months Ended March 31,

(In thousands)

Total collaboration revenue

Revenue - Revenue from Licensing Arrangements (Details) - USD ($) $ in Thousands	3 Months Ended		12 Months Ended
	Mar. 31, 2023	Mar. 31, 2022	Dec. 31, 2019
Collaborative Arrangements and Co-Promote Agreement
Total revenue	$ 10,417	$ 13,196
Pfizer
Collaborative Arrangements and Co-Promote Agreement
Initial cash payment			$ 10,000
Total revenue		$ 2,500
Pfizer \| Sales milestones
Collaborative Arrangements and Co-Promote Agreement
Initial cash payment	$ 237,500

- Definition

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

+ References

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+ Details

CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY (DEFICIT) - USD ($) shares in Thousands, $ in Thousands	Ordinary Shares	Additional Paid-in Capital	Accumulated Other Comprehensive Gain (Loss)	Accumulated Deficit	Total
Balances at Dec. 31, 2021	$ 1	$ 1,387,469		$ (1,726,043)	$ (338,573)
Balances (in shares) at Dec. 31, 2021	74,435
Increase (Decrease) in Stockholders' Equity
Employee share-based compensation expense		14,545			14,545
Issuance of restricted shares (in shares)	1,796
Repurchase of shares to satisfy tax withholding		(1,448)			(1,448)
Repurchase of shares to satisfy tax withholding (in shares)	(150)
Net unrealized gain (loss) on marketable securities			$ (28)		(28)
Net loss				(25,946)	(25,946)
Balances at Mar. 31, 2022	$ 1	1,400,566	(28)	(1,751,989)	(351,450)
Balances (in shares) at Mar. 31, 2022	76,081
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
Increase (Decrease) in Stockholders' Equity
Repurchase of ordinary shares, net of transaction costs		(55,353)			$ (55,353)
Repurchase of ordinary shares, net of transaction costs (in shares)	(5,158)				(5,200)
Employee share-based compensation expense		7,021			$ 7,021
Issuance of restricted shares (in shares)	557
Repurchase of shares to satisfy tax withholding		(887)			(887)
Repurchase of shares to satisfy tax withholding (in shares)	(84)
Net unrealized gain (loss) on marketable securities			66		66
Net loss				(22,088)	(22,088)
Balances at Mar. 31, 2023	$ 1	$ 1,246,506	$ 51	$ (875,999)	$ 370,559
Balances (in shares) at Mar. 31, 2023	60,542				60,542

Discontinued Operations (Tables)

3 Months Ended

Mar. 31, 2023

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

Summary of discontinued operations


	Three Months Ended March 31,
(In thousands)	2023		2022
Income from investments in TRC, LLC	$	—	$	25,110
Transaction-related legal expenses (prior to July 20, 2022)		—		(1,279)
Interest expense on 9.5% Non-recourse notes due 2035		—		(9,518)
Provision for income tax expense		—		—
Net income from discontinued operations	$	—	$	14,313

Summary of TRC's Statement of income and equity Interest


	Three Months Ended
	March 31,
(In thousands)	2022
Royalty revenue and gross profit	$	29,309
Income from continuing operations		29,112
Net income		29,541

- 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.

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+ Details

Strategic Actions (Tables)

3 Months Ended

Mar. 31, 2023

Strategic Actions

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


(In thousands)
Balance at December 31, 2022	$	—
Net accruals		1,217
Cash paid		(599)
Balance at March 31, 2023	$	618

Investments and Fair Value Measurements - Available-for-sale securities (Details) - USD ($) $ in Thousands	Mar. 31, 2023	Dec. 31, 2022
Available for sale securities:
Amortized Cost	$ 241,327	$ 303,557
Gross Unrealized Gains	79	12
Gross Unrealized Losses	(28)	(27)
Estimated Fair Value	241,378	303,542
Debt Securities, Available-for-sale, Unrealized Gain (Loss) [Abstract]
Estimated Fair Value lesser than 12 months	45,885	37,279
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	45,885	37,279
Gross unrealized lesser than 12 months	(28)	(27)
Gross unrealized loss, Total	(28)	(27)
Marketable securities
Available for sale securities:
Amortized Cost	92,211	83,049
Gross Unrealized Gains	79	12
Gross Unrealized Losses	(28)	(27)
Estimated Fair Value	92,262	83,034
U.S. government securities
Debt Securities, Available-for-sale, Unrealized Gain (Loss) [Abstract]
Estimated Fair Value lesser than 12 months	14,525
Estimated Fair Value Total	14,525
Gross unrealized lesser than 12 months	(6)
Gross unrealized loss, Total	(6)
U.S. government securities \| Quoted Prices in Active Markets for Identical Assets, Level 1
Available for sale securities:
Amortized Cost	29,119	24,873
Gross Unrealized Gains	6	8
Gross Unrealized Losses	(6)
Estimated Fair Value	29,119	24,881
U.S. corporate notes
Debt Securities, Available-for-sale, Unrealized Gain (Loss) [Abstract]
Estimated Fair Value lesser than 12 months	16,434
Estimated Fair Value Total	16,434
Gross unrealized lesser than 12 months	(20)
Gross unrealized loss, Total	(20)
U.S. corporate notes \| Significant Other Observable Inputs, Level 2
Available for sale securities:
Amortized Cost	38,906
Gross Unrealized Gains	63
Gross Unrealized Losses	(20)
Estimated Fair Value	38,949
U.S. commercial paper
Debt Securities, Available-for-sale, Unrealized Gain (Loss) [Abstract]
Estimated Fair Value lesser than 12 months	14,926	37,279
Estimated Fair Value Total	14,926	37,279
Gross unrealized lesser than 12 months	(2)	(27)
Gross unrealized loss, Total	(2)	(27)
U.S. commercial paper \| Significant Other Observable Inputs, Level 2
Available for sale securities:
Amortized Cost	14,927	37,307
Gross Unrealized Losses	(2)	(27)
Estimated Fair Value	14,925	37,280
U.S. government agency securities \| Significant Other Observable Inputs, Level 2
Available for sale securities:
Amortized Cost	9,259	20,869
Gross Unrealized Gains	10	4
Estimated Fair Value	9,269	20,873
Money market funds \| Quoted Prices in Active Markets for Identical Assets, Level 1
Available for sale securities:
Amortized Cost	149,116	220,508
Estimated Fair Value	$ 149,116	$ 220,508

Discontinued Operations - Summary of discontinued operations (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022
Schedule of Equity Method Investments [Line Items]
Provision for income tax expense	$ (400)
Total net income from discontinued operations		$ 14,313
9.5% Non-Recourse 2035 Notes
Schedule of Equity Method Investments [Line Items]
Interest rate (as a percent)	9.50%	9.50%
Disposed of by Sale \| TRC \| Royalty Pharma
Schedule of Equity Method Investments [Line Items]
Income from investments in TRC, LLC		$ 25,110
Transaction-related legal expenses (prior to July 20, 2022)		(1,279)
Total net income from discontinued operations		14,313
Disposed of by Sale \| TRC \| Royalty Pharma \| 9.5% Non-Recourse 2035 Notes
Schedule of Equity Method Investments [Line Items]
Interest expenses		$ (9,518)

Discontinued Operations (Details) $ in Thousands	1 Months Ended
Discontinued Operations (Details) $ in Thousands	Jul. 31, 2022 USD ($)	Mar. 31, 2023 USD ($)	Dec. 31, 2022 USD ($)
Theravance Respiratory Company, LLC
Future contingent milestone and royalty assets		$ 194,200	$ 194,200
Royalty Pharma \| Disposed of by Sale \| TRC \| Measurement Input, Discount Rate [Member]
Theravance Respiratory Company, LLC
Equity method investment, contingent consideration	7.83
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
Consideration Receivable at closing	$ 250,000
TRC
Theravance Respiratory Company, LLC
Percentage of economic interest	85.00%

Revenue - Viatris Agreement (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022
Collaborative Arrangements and Co-Promote Agreement
Percentage of profit share	35.00%
Upfront payment receivable	$ 205,000
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
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	$ 16,400	$ 15,300
Viatris \| Collaborative Arrangement \| Collaboration revenue
Collaborative Arrangements and Co-Promote Agreement
Revenues	$ 10,411	$ 10,687

Cash, Cash Equivalents, and Restricted Cash (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022	Dec. 31, 2022	Dec. 31, 2021
Cash, Cash Equivalents, and Restricted Cash
Cash and cash equivalents	$ 187,665	$ 94,367	$ 298,172
Restricted cash	836	836
Total cash, cash equivalents, and restricted cash shown on the condensed consolidated statements of cash flows	188,501	95,203	$ 299,008	$ 90,796
Realized and unrealized gain (losses) on foreign currency transactions	$ 100	$ (400)

Income Taxes (Details) $ in Millions	3 Months Ended
Income Taxes (Details) $ in Millions	Mar. 31, 2023 USD ($)
Provision for income tax (expense) benefit
Income tax expense	$ 0.4

- Definition

Amount of tax expense (benefit) related to a discontinued operation. Includes, but is not limited to, tax expense (benefit) related to income (loss) from operations during the phase-out period, tax expense (benefit) related to gain (loss) on disposal, tax expense (benefit) related to gain (loss) for reversal of write-down (write-down) to fair value, less cost to sell, and tax expense (benefit) related to adjustments of a prior period gain (loss) on disposal.

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+ Details

Revenue (Tables)

3 Months Ended

Mar. 31, 2023

Revenue

Schedule of revenue recognized from collaborative arrangements


	Three Months Ended March 31,
(In thousands)	2023		2022
Viatris collaboration agreement - Amounts receivable from Viatris	$	10,411	$	10,687

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

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


	Three Months Ended March 31,
(In thousands)	2023		2022
Viatris	$	1,753	$	1,536

CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands	Mar. 31, 2023	Dec. 31, 2022
Current assets:
Cash and cash equivalents	$ 187,665	$ 298,172
Short-term marketable securities	53,598	29,312
Receivables from collaborative arrangements	12,270	16,785
Prepaid clinical and development services	1,524	1,513
Other prepaid and current assets	6,281	7,682
Total current assets	261,338	353,464
Long-term marketable securities	18,776
Property and equipment, net	12,103	11,875
Operating lease assets	39,204	40,126
Future contingent milestone and royalty assets	194,200	194,200
Restricted cash	836	836
Other assets	12,093	6,899
Total assets	538,550	607,400
Current liabilities:
Accounts payable	2,663	1,554
Accrued personnel-related expenses	5,030	10,314
Accrued clinical and development expenses	5,022	4,932
Accrued general and administrative expenses	4,586	4,020
Operating lease liabilities	7,431	6,753
Deferred revenue	24	24
Other accrued liabilities	1,428	1,118
Total current liabilities	26,184	28,715
Long-term operating lease liabilities	43,763	45,407
Future royalty payment contingency	25,988	25,438
Long-term deferred revenue	187	192
Unrecognized tax benefits	64,191	64,191
Other long-term liabilities	7,678	1,657
Commitments and contingencies
Shareholders' Equity
Preferred shares, $0.00001 par value: 230 shares authorized, no shares issued or outstanding
Ordinary shares, $0.00001 par value: 200,000 shares authorized; 60,542 and 65,227 shares issued and outstanding at March 31, 2023 and December 31, 2022, respectively	1	1
Additional paid-in capital	1,246,506	1,295,725
Accumulated other comprehensive income (loss)	51	(15)
Accumulated deficit	(875,999)	(853,911)
Total shareholders' equity	370,559	441,800
Total liabilities and shareholders' equity	$ 538,550	$ 607,400

Revenue - Reimbursement of R and D Costs (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022
Viatris
Research and Development Reimbursement
Total reduction to R and D expense	$ 1,753	$ 1,536

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022
Operating activities
Net income (loss)	$ (22,088)	$ (25,946)
Less: Net income from discontinued operations		14,313
Net loss from continuing operations	(22,088)	(40,259)
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:
Depreciation and amortization	625	980
Amortization and accretion income, net	(678)	2
Ampreloxetine interest accretion	550
Share-based compensation	7,021	14,545
Undistributed earnings from TRC, LLC		7
(Gain) loss on disposal of property and equipment	29	(218)
Interest payable on 2023 notes		1,869
Amortization of right-of-use assets	1,031	341
Changes in operating assets and liabilities:
Receivables from collaborative and licensing arrangements	4,515	1,788
Prepaid clinical and development services	(13)	5,503
Other prepaid and current assets	1,401	2,436
Right-of-use lease assets	(109)
Other assets	1,270	1
Accounts payable	1,002	(1,619)
Accrued personnel-related expenses, accrued clinical and development expenses, and other accrued liabilities	(4,337)	(10,344)
Deferred revenue	(6)	(9)
Operating lease liabilities	(966)	(1,715)
Other long-term liabilities	(468)	8
Net cash used in operating activities - continuing operations	(11,221)	(26,684)
Net cash (used in) provided by operating activities - discontinued operations		615
Net cash used in operating activities	(11,221)	(26,069)
Investing activities
Purchases of property and equipment	(938)	(250)
Purchases of marketable securities	(134,533)	(18,174)
Maturities of marketable securities	29,500	48,499
Sale of short-term investments and marketable securities	62,715
Proceeds from the sale of property and equipment	210	1,849
Net cash provided by investing activities - continuing operations	(43,046)	31,924
Net cash provided by investing activities	(43,046)	31,924
Financing activities
Ordinary share repurchases	(55,353)
Repurchase of shares to satisfy tax withholding	(887)	(1,448)
Net cash (used in) provided by financing activities - continuing operations	(56,240)	(1,448)
Net cash (used in) provided by financing activities	(56,240)	(1,448)
Net increase in cash, cash equivalents, and restricted cash	(110,507)	4,407
Cash, cash equivalents, and restricted cash at beginning of period	299,008	90,796
Cash, cash equivalents, and restricted cash at end of period	188,501	95,203
Supplemental disclosure of cash flow information
Cash paid for interest		$ 4,613
Cash paid (received) for income taxes, net	7
Supplemental disclosure of non-cash investing and financing activities
Recognition of tenant improvement allowance assigned to sublease	$ 6,490

Investments and Fair Value Measurements

3 Months Ended

Mar. 31, 2023

Investments and Fair Value Measurements

Investments and Fair Value Measurements

5. 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:


		March 31, 2023
				Gross		Gross
		Amortized		Unrealized		Unrealized		Estimated
(In thousands)		Cost		Gains		Losses		Fair Value
US government securities	Level 1	$	29,119	$	6	$	(6)	$	29,119
US government agency securities	Level 2		9,259		10		—		9,269
Corporate notes	Level 2		38,906		63		(20)		38,949
Commercial paper	Level 2		14,927		—		(2)		14,925
Marketable securities			92,211		79		(28)		92,262
Money market funds	Level 1		149,116		—		—		149,116
Total		$	241,327	$	79	$	(28)	$	241,378


		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
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

As of March 31, 2023, all of the Company’s available-for-sale securities had contractual maturities within 15 months, and the weighted-average maturity of marketable securities was approximately three months. There were no transfers between Level 1 and Level 2 during the periods presented, and there have been no material changes to the Company’s valuation techniques during the three months ended March 31, 2023.

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


	March 31, 2023
	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	$	14,525	$	(6)	$	—	$	—	$	14,525	$	(6)
Corporate notes		16,434		(20)		—		—		16,434		(20)
Commercial paper		14,926		(2)		—		—		14,926		(2)
Total	$	45,885	$	(28)	$	—	$	—	$	45,885	$	(28)


	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)

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 March 31, 2023.

As of March 31, 2023, the Company’s accumulated other comprehensive income on its condensed consolidated balance sheets consisted of net unrealized gains on available-for-sale investments. For the three months ended March 31, 2023, the Company sold marketable securities for total proceeds of $62.9 million and recognized a realized gain from the sale of $0.2 million based on the specific identification method. For the three months ended March 31, 2022, the Company did not sell any marketable securities.

Strategic Actions (Details)
$ / shares in Units, $ in Thousands, shares in Millions

1 Months Ended

3 Months Ended

Feb. 27, 2023

USD ($)

Mar. 31, 2023

USD ($)

Mar. 31, 2023

USD ($)

Mar. 31, 2023

USD ($)

Mar. 31, 2022

USD ($)

$ / shares

Sep. 30, 2022

USD ($)

Strategic Actions

Share repurchase authorized amount

$ 75,000

Share repurchase authorized amount

$ 325,000

$ 250,000

Consideration for repurchase

55,353

Share price (in dollars per share) | $ / shares

$ 10.69

Aggregate costs

$ 55,100

Repurchase of ordinary shares (in shares) | shares

183.3

5.2

Remaining repurchase amount

$ 141,700

Percent of Employee Reduction

Restructuring costs

^[1]

1,574

$ 9,324

Severance

Strategic Actions

Employee-related separation costs

1,600

9,300

1,200

4,800

Non-cash charges related to modification of equity-awards for terminated and remaining employee

$ 400

4,500

Selling, general and administrative

Strategic Actions

Restructuring costs

4,600

Research and development

Strategic Actions

Restructuring costs

$ 4,700

[1]	Amounts include share-based compensation expense as follows:

Document and Entity Information - shares	3 Months Ended
Document and Entity Information - shares	Mar. 31, 2023	May 01, 2023
Document and Entity Information
Document Type	10-Q
Document Quarterly Report	true
Document Period End Date	Mar. 31, 2023
Document Transition Report	false
Entity File Number	001-36033
Entity Registrant Name	THERAVANCE BIOPHARMA, INC.
Entity Incorporation, State or Country Code	KY
Entity Tax Identification Number	98-1226628
Entity Address, Address Line One	PO Box 309
Entity Address, Address Line Two	Ugland House, South Church Street
Entity Address, City or Town	George Town, Grand Cayman
Entity Address, Country	KY
Entity Address, Postal Zip Code	KY1-1104
City Area Code	650
Local Phone Number	808-6000
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Large Accelerated Filer
Entity Small Business	false
Entity Emerging Growth Company	false
Entity Shell Company	false
Title of 12(b) Security	Ordinary Share $0.00001 Par Value
Trading Symbol	TBPH
Security Exchange Name	NASDAQ
Entity Common Stock, Shares Outstanding		57,797,468
Entity Central Index Key	0001583107
Current Fiscal Year End Date	--12-31
Document Fiscal Year Focus	2023
Document Fiscal Period Focus	Q1
Amendment Flag	false

Commitments and Contingencies

3 Months Ended

Mar. 31, 2023

Commitments and Contingencies

Commitments and Contingencies

11. Commitments and Contingencies

Legal Proceedings

In 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 suits in Delaware and North Carolina have been dismissed, as all generic companies have agreed to venue in New Jersey. 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.

Organization and Summary of Significant Accounting Policies (Policies)	3 Months Ended
	Mar. 31, 2023
Organization and Summary of Significant Accounting Policies.
Basis of Presentation	Basis of Presentation The Company’s condensed consolidated financial information as of March 31, 2023 and for the three months ended March 31, 2023 and 2022 is unaudited but includes all adjustments (consisting only of normal recurring adjustments), which are considered necessary for a fair presentation of the financial position at such date and of the operating results and cash flows for those periods, and have been prepared in accordance with United States (“US”) generally accepted accounting principles (“GAAP”) for interim financial information. Accordingly, they do not include all of the information and notes required by GAAP for complete financial statements. The accompanying unaudited condensed consolidated financial statements should be read in conjunction with the audited consolidated December 31, 2022 financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2022, filed with the Securities and Exchange Commission (“SEC”) on March 1, 2023. The results for the three months ended March 31, 2023 are not necessarily indicative of the results to be expected for the year ending December 31, 2023, or for any other interim period or for any future period. These condensed consolidated financial statements include the accounts of the Company and its subsidiaries, and intercompany transactions and balances have been eliminated. 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 7. Discontinued Operations”). 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 condensed consolidated financial statements.
Use of Estimates	Use of Estimates The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses, and related disclosures in the condensed consolidated financial statements and accompanying notes. Management bases its estimates on historical experience and on assumptions believed to be reasonable under the circumstances. Actual results could differ materially from those estimates. The Company expects its cash, cash equivalents and marketable securities will be sufficient to fund its capital return program and its operations for at least the next twelve months from the issuance date of these condensed consolidated financial statements based on current operating plans and financial forecasts.
Significant Accounting Policies	Significant Accounting Policies There have been no material revisions in the Company’s significant accounting policies described in Note 1 to the consolidated financial statements included in its Annual Report on Form 10-K for the year ended December 31, 2022.
Recently Issued Accounting Pronouncements Not Yet Adopted	Recently Issued Accounting Pronouncements Not Yet Adopted The Company has evaluated recently issued accounting pronouncements and does not currently believe that any of these pronouncements will have a material impact on its condensed consolidated financial statements and related disclosures.

CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares shares in Thousands	Mar. 31, 2023	Dec. 31, 2022
CONDENSED CONSOLIDATED BALANCE SHEETS
Preferred shares, par value (in dollars per share)	$ 0.00001	$ 0.00001
Preferred shares, shares authorized	230	230
Preferred shares, shares issued	0	0
Preferred shares, outstanding shares	0	0
Ordinary shares, par value (in dollars per share)	$ 0.00001	$ 0.00001
Ordinary shares, authorized shares	200,000	200,000
Ordinary shares, shares issued	60,542	65,227
Ordinary shares, shares outstanding	60,542	65,227

Discontinued Operations

3 Months Ended

Mar. 31, 2023

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

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

7. Discontinued Operations

Background

In July 2022, the Company completed the sale of all of its equity interests in Theravance Respiratory Company, LLC (“TRC”) representing its 85% economic interest in the sales-based royalty rights on worldwide net sales of Assigned Collaboration Products, primarily comprised of GSK's TRELEGY ELLIPTA (“TRELEGY”) to Royalty Pharma Investments 2019 ICAV, an Irish collective asset-management vehicle (“Royalty Pharma”), pursuant to the Equity Purchase and Funding Agreement, dated as of July 13, 2022 (including the schedules and exhibits thereto, the “Purchase Agreement”), by and between the Company and Royalty Pharma (collectively with the other transactions contemplated by the Purchase Agreement, the “TRC Transaction”).

At the closing of the TRC Transaction, 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 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 (collectively with the Milestone Payments, the “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 March 31, 2023, 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 condensed 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 ASC 860, Transfers and Servicing of Financial Assets, the TRC Transaction was accounted for as a sale of a financial asset. For all periods presented, the balances and the results related to TRC have been classified as discontinued operations on the Company’s condensed consolidated financial statements.

The results of discontinued operations consisted of the following:


	Three Months Ended March 31,
(In thousands)	2023		2022
Income from investments in TRC, LLC	$	—	$	25,110
Transaction-related legal expenses (prior to July 20, 2022)		—		(1,279)
Interest expense on 9.5% Non-recourse notes due 2035		—		(9,518)
Provision for income tax expense		—		—
Net income from discontinued operations	$	—	$	14,313

TRC Summary 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 condensed consolidated financial statements. The Company’s maximum exposure to loss, as a result of its involvement with TRC, were the amounts recorded in the condensed consolidated balance sheets within “Equity in net assets of TRC, LLC”. TRC was recognized in the Company’s condensed consolidated financial statements under the equity method of accounting.

Rule 4-08(g) of Regulation S-X requires that a company include summary financial information for equity method investees when such investees are individually significant for a company. For the prior year comparable period, the income from the Company’s investment in TRC was determined to be significant. As a result, TRC’s summary financial information, including the portion of equity interest that the Company did not own, was as follows:


	Three Months Ended
	March 31,
(In thousands)	2022
Royalty revenue and gross profit	$	29,309
Income from continuing operations		29,112
Net income		29,541

Strategic Actions

3 Months Ended

Mar. 31, 2023

Strategic Actions

Strategic Actions

10. Strategic Actions

On February 27, 2023, the Company announced and has since initiated the following strategic actions (the “2023 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. For the three months ended March 31, 2023, the Company repurchased 5.2 million shares on the open market at a weighted average cost of $10.69 per share for an aggregate cost of $55.1 million, excluding fees and expenses. Since the initiation of the capital return program, the Company has repurchased $183.3 million of shares, as of March 31, 2023, and the Company has approximately $141.7 million remaining in the capital return program which is expected to be completed by the end of 2023.

Discontinued Investment in Research Activities

The Company discontinued its research activities, including the inhaled Janus kinase (JAK) inhibitor program, resulting in a 17% reduction in headcount at the end of March 2023. The Company plans to seek a partnership to continue progression of its inhaled JAK inhibitor program. In order to support the timely progression of the ampreloxetine Phase 3 study and the completion of the YUPELRI Peak Inspiratory Flow Rate (PIFR-2) Phase 4 study, the Company has prioritized its R&D resource allocation to these two programs.

As a result of the Company’s discontinued investment in research activities, for the three months ended March 31, 2023, the Company incurred restructuring and related expenses of $1.6 million primarily related to R&D expenses. Of the total $1.6 million, cash-related expenses were $1.2 million and non-cash expenses were $0.4 million which were

primarily related to the modification of equity-based awards for employees affected by the reduction in headcount. The Company does not expect to recognize any additional employee-related expenses, including share-based compensation, related to the 2023 Strategic Actions after March 31, 2023.

As a result of the broader 2021 Restructuring, for the three months ended March 31, 2022, the Company incurred restructuring and related expenses of $9.3 million of which $4.7 million was related to R&D expenses and $4.6 million was related to selling, general and administrative expenses. Of the total $9.3 million, cash-related expenses were $4.8 million and non-cash expenses were $4.5 million which were primarily related to the modification of equity-based awards for employees affected by the 2021 Restructuring and certain related awards for other employees.

Selected information relating to accrued cash-related restructuring expenses from the recently announced 2023 Strategic Actions was as follows:


(In thousands)
Balance at December 31, 2022	$	—
Net accruals		1,217
Cash paid		(599)
Balance at March 31, 2023	$	618

All of the restructuring expenses from the 2021 Restructuring were fully recognized and paid in 2022.

The Company also evaluated the impact of the 2023 Strategic Actions on the carrying value of its long-lived assets, such as property and equipment and operating lease assets. This process included evaluating the estimated remaining lives, significant changes in the use, and potential impairment charges related to its long-lived assets. Based on its evaluation, the Company determined that its long-lived assets were not impaired as of March 31, 2023.

Share-Based Compensation (Details) - USD ($) $ in Thousands	3 Months Ended
Share-Based Compensation (Details) - USD ($) $ in Thousands	Mar. 31, 2023	Mar. 31, 2022
Share-Based Compensation
Stock-based compensation expense	$ 7,021	$ 14,545
Restructuring and related expenses
Share-Based Compensation
Stock-based compensation expense	$ 357	$ 4,517
Performance-Contingent Awards - RSUs
Share-Based Compensation
RSUs outstanding (in shares)	367,000
Granted (in shares)	367,000
Fair value	$ 3,700
Share-based compensation expense	$ 0
RSUs
Share-Based Compensation
RSUs outstanding (in shares)	165,000
Granted (in shares)	165,000
Fair value	$ 1,400
Share-based compensation expense	$ 100

Organization and Summary of Significant Accounting Policies

3 Months Ended

Mar. 31, 2023

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 development, and commercialization of medicines. The Company’s focus is to deliver medicines that make a difference^® in people's lives.

Basis of Presentation

The Company’s condensed consolidated financial information as of March 31, 2023 and for the three months ended March 31, 2023 and 2022 is unaudited but includes all adjustments (consisting only of normal recurring adjustments), which are considered necessary for a fair presentation of the financial position at such date and of the operating results and cash flows for those periods, and have been prepared in accordance with United States (“US”) generally accepted accounting principles (“GAAP”) for interim financial information. Accordingly, they do not include all of the information and notes required by GAAP for complete financial statements. The accompanying unaudited condensed consolidated financial statements should be read in conjunction with the audited consolidated December 31, 2022 financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2022, filed with the Securities and Exchange Commission (“SEC”) on March 1, 2023.

The results for the three months ended March 31, 2023 are not necessarily indicative of the results to be expected for the year ending December 31, 2023, or for any other interim period or for any future period. These condensed consolidated financial statements include the accounts of the Company and its subsidiaries, and intercompany transactions and balances have been eliminated.

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 7. Discontinued Operations”). 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 condensed consolidated financial statements.

Use of Estimates

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

The Company expects its cash, cash equivalents and marketable securities will be sufficient to fund its capital return program and its operations for at least the next twelve months from the issuance date of these condensed consolidated financial statements based on current operating plans and financial forecasts.

Significant Accounting Policies

There have been no material revisions in the Company’s significant accounting policies described in Note 1 to the consolidated financial statements included in its Annual Report on Form 10-K for the year ended December 31, 2022.

Recently Issued Accounting Pronouncements Not Yet Adopted

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

Income Taxes

3 Months Ended

Mar. 31, 2023

Income Taxes

Income Taxes

9. Income Taxes

For the three months ended March 31, 2023, the Company recognized an income tax benefit of $0.4 million. The income tax benefit for the three months ended March 31, 2023 was primarily due to the generation of R&D tax credits and losses in the US that the Company anticipates will be realizable.

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.

The Company follows the accounting guidance related to accounting for income taxes which requires that a company reduce its deferred tax assets by a valuation allowance if, based on the weight of available evidence, it is more likely than not that some portion or all of its deferred tax assets will not be realized. In 2022, the Company released its valuation allowance for federal purposes stemming from the effects of the TRC Transaction. As of March 31, 2023, the Company does not believe a valuation allowance should be re-established to offset it deferred tax assets for federal purposes. As of March 31, 2023, the Company continues to maintain a full valuation allowance on its US state, California, and foreign deferred tax assets.

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

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

- Definition

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

+ References

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

Reference 2: http://www.xbrl.org/2003/role/disclosureRef
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Reference 3: http://www.xbrl.org/2003/role/disclosureRef
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-Section 50
-Paragraph 17
-Subparagraph (b)
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Reference 4: http://www.xbrl.org/2003/role/disclosureRef
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-Name Accounting Standards Codification
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-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
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-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
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Reference 8: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
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-SubTopic 30
-Section 50
-Paragraph 2
-Subparagraph (a)
-URI https://asc.fasb.org/extlink&oid=6424122&loc=d3e41874-109331

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-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

Revenue - Other Collaborative Arrangement Revenues (Details) - Collaboration revenue - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022
Collaboration revenue recognized in the period from:
Revenue from collaborative arrangements	$ 6	$ 9
Viatris
Collaboration revenue recognized in the period from:
Revenue from collaborative arrangements	$ 6	6
Other
Collaboration revenue recognized in the period from:
Revenue from collaborative arrangements		$ 3

Strategic Actions - Accrued restructuring, severance costs and one-time termination costs (Details) $ in Thousands	3 Months Ended
	Mar. 31, 2023 USD ($)
Restructuring Reserve [Roll Forward]
Net accruals	$ 1,217
Cash paid	(599)
Balance at March 31, 2023	$ 618

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS - USD ($)
shares in Thousands, $ in Thousands

3 Months Ended

Mar. 31, 2023

Mar. 31, 2022

Revenue:

Total revenue

$ 10,417

$ 13,196

Expenses:

Research and development (1)

^[1]

14,572

23,253

Selling, general and administrative (1)

^[1]

19,183

17,842

Restructuring and related expenses (1)

^[1]

1,574

9,324

Total expenses

35,329

50,419

Loss from operations

(24,912)

(37,223)

Interest expense

(550)

(2,137)

Interest income and other income (expense), net

2,979

(375)

Loss from continuing operations before income taxes

(22,483)

(39,735)

Provision for income tax benefit (expense)

395

(524)

Net loss from continuing operations

(22,088)

(40,259)

Income from discontinued operations before income taxes

14,313

Provision for income tax expense

(400)

Net income from discontinued operations

14,313

Net loss

(22,088)

(25,946)

Net unrealized gain (loss) on marketable securities

(28)

Total comprehensive loss

$ (22,022)

$ (25,974)

Net income (loss) per share:

Continuing operations - basic

$ (0.35)

$ (0.53)

Continuing operations - diluted

(0.35)

(0.53)

Discontinued operations - basic

0.19

Discontinued operations - diluted

0.19

Net income (loss) - basis

(0.35)

(0.34)

Net income (loss) - diluted

$ (0.35)

$ (0.34)

Shares used to compute basis and diluted net income (loss) per share

62,934

75,247

Shares used to compute basis and diluted net income (loss) per share

62,934

75,247

Total share-based compensation expense

$ 7,021

$ 14,545

Research and development

Expenses:

Restructuring and related expenses (1)

4,700

Net income (loss) per share:

Total share-based compensation expense

2,441

4,530

Selling, general and administrative

Expenses:

Restructuring and related expenses (1)

4,600

Net income (loss) per share:

Total share-based compensation expense

4,223

5,498

Restructuring and related expenses

Net income (loss) per share:

Total share-based compensation expense

357

4,517

Viatris collaboration agreement

Revenue:

Total revenue

10,411

10,687

Collaboration revenue

Revenue:

Total revenue

$ 6

Licensing revenue

Revenue:

Total revenue

$ 2,500

[1]	Amounts include share-based compensation expense as follows:

-Net Income (Loss) per Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022
Numerator:
Net loss from continuing operations	$ (22,088)	$ (40,259)
Net income from discontinued operations		14,313
Net loss	$ (22,088)	$ (25,946)
Denominator:
Weighted-average ordinary shares outstanding - basic	62,934	75,247
Weighted-average ordinary shares outstanding - diluted	62,934	75,247
Continuing operations - basic	$ (0.35)	$ (0.53)
Continuing operations - diluted	(0.35)	(0.53)
Discontinued operations - basic		0.19
Discontinued operations - diluted		0.19
Net income (loss) - basis	(0.35)	(0.34)
Net income (loss) - diluted	$ (0.35)	$ (0.34)

Subleases

3 Months Ended

Mar. 31, 2023

Subleases

Subleases

6. Subleases

In July 2021 and June 2022, the Company entered into two non-cancelable agreements under which it subleased a total of approximately 99,000 square feet of its South San Francisco office and laboratory space to two unaffiliated companies. 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 condensed consolidated statements of operations. Sublease income related to the sublease agreements was $2.1 million and $0.5 million for the three months ended March 31, 2023 and 2022, respectively. In the three months ended March 31, 2023,

the Company also recognized increases to other assets and other long-term liabilities of approximately $6.5 million for lessor tenant improvement allowances that have been assigned to its sublessees and will be recognized over the term of the related sublease agreements.

Cash, Cash Equivalents, and Restricted Cash (Tables)

3 Months Ended

Mar. 31, 2023

Cash, Cash Equivalents, and Restricted Cash

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


	March 31,
(In thousands)	2023		2022
Cash and cash equivalents	$	187,665	$	94,367
Restricted cash		836		836
Total cash, cash equivalents, and restricted cash shown on the condensed consolidated statements of cash flows	$	188,501	$	95,203

Share-Based Compensation

3 Months Ended

Mar. 31, 2023

Share-Based Compensation

Share-Based Compensation

8. Share-Based Compensation

Market and Performance-Contingent Awards

The Company periodically grants performance-contingent share-based awards to employees. For the three months ended March 31, 2023, the Company granted 165,000 restricted share units (“RSUs”) with a fair value of $1.4 million that vest upon the Company’s common stock meeting certain market-based price targets followed by a service period. The fair value of these market-based RSUs is being recognized through February 2027. For the three months ended March 31, 2023, the Company recognized $0.1 million of share-based compensation expense related to the awards.

For the three months ended March 31, 2023, the Company also granted 367,000 performance-contingent RSUs with a fair value of $3.7 million with performance vesting dates through February 2026. For the quarter ended March 31, 2023, the Company concluded that the achievement of these performance vesting criteria was not probable and no expense has been recognized related to these awards. However, if it were determined in a future period that achievement of these performance criteria is probable, the Company would recognize a cumulative catch-up of expense.

Subleases (Details) $ in Thousands	3 Months Ended
Subleases (Details) $ in Thousands	Mar. 31, 2023 USD ($) ft²
Lessee, Lease, Description [Line Items]
Area of subleased property \| ft²	99,000
Tenant improvement allowance	$ 6,490
Sublease One [Member]
Lessee, Lease, Description [Line Items]
Operating sublease income	2,100
Sublease Two [Member]
Lessee, Lease, Description [Line Items]
Operating sublease income	$ 500

Net Income (Loss) per Share

3 Months Ended

Mar. 31, 2023

Net Income (Loss) per Share

Net Income (Loss) per Share

2. Net Loss per Share

Basic net loss per share is computed by dividing the net loss attributable to ordinary shareholders by the weighted-average number of ordinary shares outstanding for the period, excluding shares subject to repurchase and without consideration of potentially dilutive securities. Diluted net loss per share is computed by giving effect to all potentially dilutive ordinary shares outstanding for the period, which primarily consist of instruments issued and outstanding under the Company’s equity incentive and employee share purchase plans and shares issuable upon note conversion. Ordinary share equivalents are excluded from the computation in periods in which they have an anti-dilutive effect unless the consideration of any one of them gives a dilutive effect.


	Three Months Ended March 31,
(In thousands, except per share data)	2023		2022
Numerator:
Net loss from continuing operations	$	(22,088)	$	(40,259)
Net income from discontinued operations		—		14,313
Net loss	$	(22,088)	$	(25,946)

Denominator:
Weighted-average ordinary shares outstanding - basic and diluted		62,934		75,247

Net loss per share:
Continuing operations - basic and diluted	$	(0.35)	$	(0.53)
Discontinued operations - basic and diluted	$	—	$	0.19
Net loss per share - basic and diluted	$	(0.35)	$	(0.34)

Anti-dilutive Securities

In accordance with Accounting Standards Codification (“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 three months ended March 31, 2023 and 2022, 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:


	Three Months Ended March 31,
(In thousands)	2023	2022
Share issuances under equity incentive plans and employee share purchase plans	4,289	6,831
Share issuances upon the conversion of convertible senior notes	—	6,676
Total	4,289	13,507

Investments and Fair Value Measurements - Convertible senior notes (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022
Maturity period for marketable securities
Maximum contractual maturity period	15 months
Weighted average contractual maturity period	3 months
Unrealized losses
Net unrealized losses	$ 0
Available-for-sale securities sold	62,900	$ 0
Realized gain	$ 200

Investments and Fair Value Measurements (Tables)

3 Months Ended

Mar. 31, 2023

Investments and Fair Value Measurements

Schedule of available-for-sale securities


		March 31, 2023
				Gross		Gross
		Amortized		Unrealized		Unrealized		Estimated
(In thousands)		Cost		Gains		Losses		Fair Value
US government securities	Level 1	$	29,119	$	6	$	(6)	$	29,119
US government agency securities	Level 2		9,259		10		—		9,269
Corporate notes	Level 2		38,906		63		(20)		38,949
Commercial paper	Level 2		14,927		—		(2)		14,925
Marketable securities			92,211		79		(28)		92,262
Money market funds	Level 1		149,116		—		—		149,116
Total		$	241,327	$	79	$	(28)	$	241,378


		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
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

Schedule of Available for sale debt securities with unrealized losses


	March 31, 2023
	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	$	14,525	$	(6)	$	—	$	—	$	14,525	$	(6)
Corporate notes		16,434		(20)		—		—		16,434		(20)
Commercial paper		14,926		(2)		—		—		14,926		(2)
Total	$	45,885	$	(28)	$	—	$	—	$	45,885	$	(28)


	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)

Cash, Cash Equivalents, and Restricted Cash

3 Months Ended

Mar. 31, 2023

Cash, Cash Equivalents, and Restricted Cash

Cash, Cash Equivalents, and Restricted Cash

4. Cash, Cash Equivalents, and Restricted Cash

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


	March 31,
(In thousands)	2023		2022
Cash and cash equivalents	$	187,665	$	94,367
Restricted cash		836		836
Total cash, cash equivalents, and restricted cash shown on the condensed consolidated statements of cash flows	$	188,501	$	95,203

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, if any, that are reported separately on the condensed consolidated balance sheets.

The Company periodically engages in foreign exchange transactions as a part of its operations. For the three months ended March 31, 2023 and 2022, the Company recognized net realized and unrealized foreign currency gains (losses) of $0.1 million and ($0.4) million, respectively. These amounts are included in the Company’s condensed consolidated statements of operations within “Interest income and other income (expense), net”.

Net Income (Loss) per Share (Tables)

3 Months Ended

Mar. 31, 2023

Net Income (Loss) per Share

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


	Three Months Ended March 31,
(In thousands, except per share data)	2023		2022
Numerator:
Net loss from continuing operations	$	(22,088)	$	(40,259)
Net income from discontinued operations		—		14,313
Net loss	$	(22,088)	$	(25,946)

Denominator:
Weighted-average ordinary shares outstanding - basic and diluted		62,934		75,247

Net loss per share:
Continuing operations - basic and diluted	$	(0.35)	$	(0.53)
Discontinued operations - basic and diluted	$	—	$	0.19
Net loss per share - basic and diluted	$	(0.35)	$	(0.34)

Schedule of anti-dilutive securities


	Three Months Ended March 31,
(In thousands)	2023	2022
Share issuances under equity incentive plans and employee share purchase plans	4,289	6,831
Share issuances upon the conversion of convertible senior notes	—	6,676
Total	4,289	13,507

Discontinued Operations - Summary of financial information (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022
Summary financial information
Revenues.	$ 10,417	$ 13,196
Income from continuing operations	(22,088)	(40,259)
Net loss	$ (22,088)	(25,946)
TRC
Summary financial information
Income from continuing operations		29,112
Net loss		29,541
TRC \| Royalties
Summary financial information
Revenues.		$ 29,309

- Definition

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

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

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Net Income (Loss) per Share - Anti-dilutive Securities (Details) - shares shares in Thousands	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022
Anti-Dilutive Securities
Anti-dilutive securities (in shares)	4,289	13,507
Share issuances under equity incentive plans and employee share purchase plans
Anti-Dilutive Securities
Anti-dilutive securities (in shares)	4,289	6,831
Share issuances upon the conversion of convertible senior notes
Anti-Dilutive Securities
Anti-dilutive securities (in shares)		6,676