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UNITED STATES

Table of Contents

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 10-Q

(Mark One)

☒

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2024

☐

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission file number: 001-36033

THERAVANCE BIOPHARMA, INC.

(Exact Name of Registrant as Specified in its Charter)


Cayman Islands		98-1226628
(State or Other Jurisdiction of		(I.R.S. Employer
Incorporation or Organization)		Identification No.)

C/O Theravance Biopharma US, Inc.
901 Gateway Boulevard
South San Francisco, CA		94080
(Address of Principal Executive Offices)		(Zip Code)

(650) 808-6000

(Registrant’s Telephone Number, Including Area Code)

Securities registered pursuant to Section 12(b) of the Act:


Title of each class	Trading Symbol	Name of each exchange on which registered
Ordinary Share $0.00001 Par Value	TBPH	The Nasdaq Global Market

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large, accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.


Large Accelerated Filer ☐				Smaller Reporting Company ☒
Accelerated Filer ☐				Emerging Growth Company ☐
Non-accelerated Filer ☒

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

As of August 2, 2024, the number of the registrant’s outstanding ordinary shares was 48,922,083.

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THERAVANCE BIOPHARMA, INC.

TABLE OF CONTENTS


	Page No.
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements (unaudited)	3
Condensed Consolidated Balance Sheets as of June 30, 2024 and December 31, 2023	3
Condensed Consolidated Statements of Operations and Comprehensive Loss for the three and six months ended June 30, 2024 and 2023	4
Condensed Consolidated Statements of Shareholders’ Equity for the three and six months ended June 30, 2024 and 2023	5
Condensed Consolidated Statements of Cash Flows for the six months ended June 30, 2024 and 2023	6
Notes to Condensed Consolidated Financial Statements	7
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations	16
Item 3. Quantitative and Qualitative Disclosures About Market Risk	26
Item 4. Controls and Procedures	26

PART II. OTHER INFORMATION
Item 1. Legal Proceedings	27
Item 1A. Risk Factors	28
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds	60
Item 5. Other Information	60
Item 6. Exhibits	61
Signatures	62

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PART I. FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

THERAVANCE BIOPHARMA, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited)

(In thousands, except per share data)


	June 30,		December 31,
	2024		2023
Assets
Current assets:
Cash and cash equivalents	$	46,345	$	39,545
Short-term marketable securities		49,733		62,881
Receivables from collaborative arrangements		14,299		17,474
Prepaid clinical and development services		2,646		2,038
Other prepaid and current assets		6,284		11,603
Total current assets		119,307		133,541
Property and equipment, net		8,142		9,068
Operating lease assets		31,815		36,287
Future contingent milestone and royalty assets		194,200		194,200
Restricted cash		836		836
Other assets		7,729		8,067
Total assets	$	362,029	$	381,999

Liabilities and Shareholders' Equity
Current liabilities:
Accounts payable	$	1,674	$	1,524
Accrued personnel-related expenses		5,774		6,443
Accrued clinical and development expenses		1,966		2,246
Accrued general and administrative expenses		1,959		2,900
Operating lease liabilities		4,219		3,923
Tenant improvement payable to sublessee		6,490		6,490
Other accrued liabilities		864		1,241
Total current liabilities		22,946		24,767
Long-term operating lease liabilities		42,441		45,236
Future royalty payment contingency		29,061		27,788
Unrecognized tax benefits		69,007		65,294
Other long-term liabilities		4,885		5,919
Commitments and contingencies (Note 10)

Shareholders’ Equity
Preferred shares, $0.00001 par value per share: 230 shares authorized, no shares issued or outstanding		—		—
Ordinary shares, $0.00001 par value per share: 200,000 shares authorized; 48,922 and 48,091 shares issued and outstanding at June 30, 2024 and December 31, 2023, respectively		—		—
Additional paid-in capital		1,131,008		1,122,164
Accumulated other comprehensive loss		(22)		(65)
Accumulated deficit		(937,297)		(909,104)
Total shareholders’ equity		193,689		212,995
Total liabilities and shareholders’ equity	$	362,029	$	381,999

See accompanying notes to condensed consolidated financial statements.

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THERAVANCE BIOPHARMA, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS

(Unaudited)

(In thousands, except per share data)


	Three Months Ended June 30,				Six Months Ended June 30,
	2024		2023		2024		2023

Revenue:
Viatris collaboration agreement	$	14,256	$	13,743	$	28,759	$	24,154
Collaboration revenue		—		6		—		12
Total revenue		14,256		13,749		28,759		24,166

Expenses:
Research and development (1)		9,954		9,425		18,922		23,997
Selling, general and administrative (1)		17,056		19,278		33,798		38,461
Impairment of long-lived assets (non-cash)		2,951		—		2,951		—
Restructuring and related expenses (1)		—		1,169		—		2,743
Total expenses		29,961		29,872		55,671		65,201

Loss from operations		(15,705)		(16,123)		(26,912)		(41,035)
Interest expense (non-cash)		(644)		(568)		(1,273)		(1,118)
Interest income and other income (expense), net		1,128		2,504		2,562		5,483
Loss before income taxes		(15,221)		(14,187)		(25,623)		(36,670)
Provision for income tax expense		(1,308)		(1,458)		(2,570)		(1,063)
Net loss		(16,529)		(15,645)	$	(28,193)	$	(37,733)

Net unrealized gain (loss) on available-for-sale investments		19		(337)		43		(271)
Total comprehensive loss	$	(16,510)	$	(15,982)	$	(28,150)	$	(38,004)

Net loss per share:
Basic and diluted net loss per share	$	(0.34)	$	(0.28)	$	(0.58)	$	(0.63)

Shares used to compute basic and diluted net loss per share	$	48,747	$	56,682		48,515		59,791

(1)	Amounts include share-based compensation expense as follows:


	Three Months Ended June 30,				Six Months Ended June 30,
(In thousands)	2024		2023		2024		2023
Research and development	$	1,151	$	1,855	$	2,616	$	4,296
Selling, general and administrative		4,225		4,409		7,988		8,632
Restructuring and related expenses		—		—		—		357
Total share-based compensation expense	$	5,376	$	6,264	$	10,604	$	13,285

See accompanying notes to condensed consolidated financial statements.

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THERAVANCE BIOPHARMA, INC.

CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY

(Unaudited)

(In thousands)


						Accumulated
				Additional		Other				Total
	Ordinary Shares			Paid-In		Comprehensive		Accumulated		Shareholders'
	Shares	Amount		Capital		Gain (Loss)		Deficit		Equity
Balances at March 31, 2024	48,566	$	—	$	1,125,677	$	(41)	$	(920,768)	$	204,868
Proceeds from the sale of ordinary shares	5		—		44		—		—		44
Proceeds from ESPP purchases	45		—		375		—		—		375
Employee share-based compensation expense	—		—		5,376		—		—		5,376
Issuance of restricted shares	354		—		—		—		—		—
Repurchase of shares to satisfy tax withholding	(48)		—		(464)		—		—		(464)
Net unrealized gain on marketable securities	—		—		—		19		—		19
Net loss	—		—		—		—		(16,529)		(16,529)
Balances at June 30, 2024	48,922	$	—	$	1,131,008	$	(22)	$	(937,297)	$	193,689

						Accumulated
				Additional		Other				Total
	Ordinary Shares			Paid-In		Comprehensive		Accumulated		Shareholders'
	Shares	Amount		Capital		Loss		Deficit		Equity
Balances at December 31, 2023	48,091	$	—	$	1,122,164	$	(65)	$	(909,104)	$	212,995
Repurchase of ordinary shares, net of transaction costs	(38)		—		(445)		—		—		(445)
Proceeds from the sale of ordinary shares	5		—		44		—		—		44
Proceeds from ESPP purchases	45		—		375		—		—		375
Employee share-based compensation expense	—		—		10,604		—		—		10,604
Issuance of restricted shares	1,013		—		—		—		—		—
Repurchase of shares to satisfy tax withholding	(194)		—		(1,734)		—		—		(1,734)
Net unrealized gain on marketable securities	—		—		—		43		—		43
Net loss	—		—		—		—		(28,193)		(28,193)
Balances at June 30, 2024	48,922	$	—	$	1,131,008	$	(22)	$	(937,297)	$	193,689

						Accumulated
				Additional		Other				Total
	Ordinary Shares			Paid-In		Comprehensive		Accumulated		Shareholders'
	Shares	Amount		Capital		Gain (Loss)		Deficit		Equity
Balances at March 31, 2023	60,542	$	1	$	1,246,506	$	51	$	(875,999)	$	370,559
Repurchase of ordinary shares, net of transaction costs	(7,283)		—		(80,543)		—		—		(80,543)
Proceeds from ESPP purchases	63		—		446		—		—		446
Employee share-based compensation expense	—		—		6,264		—		—		6,264
Issuance of restricted shares	424		—		—		—		—		—
Repurchase of shares to satisfy tax withholding	(52)		—		(583)		—		—		(583)
Net unrealized loss on marketable securities	—		—		—		(337)		—		(337)
Net loss	—		—		—		—		(15,645)		(15,645)
Balances at June 30, 2023	53,694	$	1	$	1,172,090	$	(286)	$	(891,644)	$	280,161

						Accumulated
				Additional		Other				Total
	Ordinary Shares			Paid-In		Comprehensive		Accumulated		Shareholders'
	Shares	Amount		Capital		Loss		Deficit		Equity
Balances at December 31, 2022	65,227	$	1	$	1,295,725	$	(15)	$	(853,911)	$	441,800
Repurchase of ordinary shares, net of transaction costs	(12,441)		—		(135,896)		—		—		(135,896)
Proceeds from ESPP purchases	63		—		446		—		—		446
Employee share-based compensation expense	—		—		13,285		—		—		13,285
Issuance of restricted shares	981		—		—		—		—		—
Repurchase of shares to satisfy tax withholding	(136)		—		(1,470)		—		—		(1,470)
Net unrealized loss on marketable securities	—		—		—		(271)		—		(271)
Net loss	—		—		—		—		(37,733)		(37,733)
Balances at June 30, 2023	53,694	$	1	$	1,172,090	$	(286)	$	(891,644)	$	280,161

See accompanying notes to condensed consolidated financial statements.

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THERAVANCE BIOPHARMA, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

(In thousands)


	Six Months Ended June 30,
	2024		2023
Operating activities
Net loss	$	(28,193)	$	(37,733)
Adjustments to reconcile net loss to net cash provided by (used in) operating activities:
Depreciation and amortization		859		1,177
Amortization and accretion on investment securities, net		(933)		(1,092)
Future royalty payment contingency interest accretion		1,273		1,118
Share-based compensation		10,604		13,285
Loss on disposal of property and equipment		34		1,352
Loss on impairment of long-lived assets		2,951		—
Amortization of right-of-use assets		2,232		1,817
Deferred income taxes		(1,074)		—
Changes in operating assets and liabilities:
Receivables from collaborative and licensing arrangements		3,175		989
Prepaid clinical and development services		(608)		533
Other prepaid and current assets		5,318		(95)
Right-of-use lease assets		(548)		(144)
Other assets		292		1,751
Accounts payable		182		83
Accrued personnel-related expenses, accrued clinical and development expenses, and other accrued liabilities		(2,256)		(6,534)
Deferred revenue		—		(11)
Operating lease liabilities		(2,498)		(479)
Unrecognized tax benefits		3,714		—
Other long-term liabilities		39		326
Net cash used in operating activities		(5,437)		(23,657)

Investing activities
Purchases of property and equipment		(127)		(1,790)
Purchases of marketable securities		(58,140)		(134,534)
Maturities of marketable securities		72,264		31,435
Sale of short-term investments and marketable securities		—		71,377
Proceeds from the sale of property and equipment		—		1,513
Net cash provided by (used in) investing activities		13,997		(31,999)

Financing activities
Ordinary share repurchases		(445)		(135,896)
Proceeds from the sale of ordinary shares		44		—
Proceeds from ESPP purchases		375		446
Repurchase of shares to satisfy tax withholding		(1,734)		(1,470)
Net cash used in financing activities		(1,760)		(136,920)

Net increase (decrease) in cash, cash equivalents, and restricted cash		6,800		(192,576)
Cash, cash equivalents, and restricted cash at beginning of period		40,381		299,008
Cash, cash equivalents, and restricted cash at end of period	$	47,181	$	106,432

Supplemental disclosure of cash flow information
Cash paid for income taxes, net	$	12	$	14

Supplemental disclosure of non-cash activities
Recognition of tenant improvement allowance assigned to sublease	$	—	$	6,490

See accompanying notes to condensed consolidated financial statements.

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THERAVANCE BIOPHARMA, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

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 statements as of June 30, 2024 and for the three and six months ended June 30, 2024 and 2023 are unaudited but include 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, 2023 financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2023, filed with the Securities and Exchange Commission (“SEC”) on March 1, 2024.

The results for the three and six months ended June 30, 2024 are not necessarily indicative of the results to be expected for the year ending December 31, 2024, or for any other interim period or for any future period. These condensed consolidated financial statements include the accounts of the Company and its subsidiaries, and intercompany transactions and balances have been eliminated.

Use of Estimates

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

Liquidity and Capital Resources

The Company expects its cash, cash equivalents, and marketable securities will be sufficient to fund 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, 2023.

Recently Issued Accounting Pronouncements Not Yet Adopted

In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures (“ASU 2023-09”). ASU 2023-09 requires entities to provide additional information in their tax rate reconciliation and additional disclosures about income taxes paid by jurisdiction. ASU 2023-09 is effective on a prospective basis for annual periods beginning after December 15, 2024. Early adoption is also permitted for annual financial statements that have not yet been issued or made available for issuance. The Company is evaluating the impact of adopting ASU 2023-09 on its consolidated financial statements income tax disclosures.

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.

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2. Net Loss per Share and Anti-dilutive Securities

Basic net loss per share is computed by dividing net loss by the weighted-average number of shares outstanding during the period. Diluted net loss per share is computed by increasing the weighted-average number of shares outstanding for the dilutive effect of potential ordinary shares determined using the treasury stock method. Potential ordinary shares include outstanding options to purchase ordinary shares, ordinary shares expected to be issued under the Company’s employee share purchase plan (“ESPP”), restricted share units (“RSUs”), and performance-contingent RSUs (“PSUs”) for which the performance vesting conditions have been deemed probable. PSUs with performance or market vesting conditions that have been deemed not probable as of the end of the period are not included in the diluted net loss per share computation.


	Three Months Ended June 30,				Six Months Ended June 30,
(In thousands, except per share data)	2024		2023		2024		2023
Numerator:
Net loss	$	(16,529)	$	(15,645)	$	(28,193)	$	(37,733)

Denominator:
Weighted-average ordinary shares outstanding - basic and diluted		48,747		56,682		48,515		59,791

Net loss per share - basic and diluted	$	(0.34)	$	(0.28)	$	(0.58)	$	(0.63)

In accordance with Accounting Standards Codification (“ASC”) 260, Earnings Per Share, if a company incurred a net loss, then potential ordinary shares are considered anti-dilutive for the periods in which the net loss was recognized. As a result, the following potential ordinary shares were not included in the computation of diluted net loss per share above because including them would have had an anti-dilutive effect:


	Three Months Ended June 30,		Six Months Ended June 30,
(In thousands)	2024	2023	2024	2023
Options	2,336	2,148	2,320	2,401
Restricted share units and performance-contingent RSUs deemed probable	1,444	1,510	829	1,677
Employee share purchase plan	85	35	113	36
Total	3,865	3,693	3,262	4,114

3. Revenue

Revenue from Collaborative Arrangements

Viatris

In January 2015, the Company and Viatris Inc. (“Viatris”) established a strategic collaboration (the “Viatris Agreement”) for the development and commercialization of revefenacin, including YUPELRI^® (revefenacin) inhalation solution. The Company entered into the collaboration to expand the breadth of its revefenacin development program and extend its commercial reach. 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 also holds exclusive development and commercialization rights to nebulized revefenacin in China and adjacent territories, which include the Hong Kong SAR, the Macau SAR, and Taiwan, and the Company is eligible to receive low double-digit tiered royalties on net sales of nebulized revefenacin in this region, if approved. Viatris is responsible for all aspects of development and commercialization in the China and adjacent territories, including pre- and post-launch activities and

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product registration and all associated costs. Viatris is the principal in the YUPELRI sales transactions, and as a result, the Company does not reflect the product sales in its condensed consolidated financial statements.

As of June 30, 2024, the Company is eligible to receive from Viatris potential global development, regulatory and sales milestone payments (excluding China and adjacent territories) 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 US net sales and $10.0 million relates to regulatory actions in the European Union (“EU”). The Company is also eligible to receive additional potential development and sales milestones up to $52.5 million related to Viatris’ development and commercialization of nebulized revefenacin in China and adjacent territories with $45.0 million associated with YUPELRI monotherapy and $7.5 million associated with future potential combination products. Of the $45.0 million associated with monotherapy, $37.5 million relates to sales milestones based on achieving certain levels of net sales and $7.5 million relates to regulatory approval in China.

The Viatris Agreement is considered to be within the scope of ASC 808, Collaborative Arrangements, 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 by both parties according to the profit and loss sharing percentages noted above. 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, Revenue Recognition, and, as such, the reimbursable program costs are excluded from the original transaction price.

The future potential milestone amounts for the Viatris Agreement were not included in the original 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 condensed consolidated statements of operations as revenue from “Viatris collaboration agreement” irrespective of whether the overall collaboration is profitable. Amounts payable to Viatris, if any, in connection with the commercialization of YUPELRI are recorded within the condensed consolidated statements of operations as a collaboration loss within selling, general and administrative expenses.

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


	Three Months Ended June 30,				Six Months Ended June 30,
(In thousands)	2024		2023		2024		2023
Viatris collaboration agreement – Amounts receivable from Viatris	$	14,256	$	13,743	$	28,759	$	24,154

While Viatris records total YUPELRI net sales within its own consolidated financial statements, Viatris collaboration agreement revenue on the Company’s condensed consolidated statements of operations included the

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Company’s implied 35% share of total YUPELRI net sales, before deducting shared commercial expenses, as presented below:


	Three Months Ended June 30,				Six Months Ended June 30,
(In thousands)	2024		2023		2024		2023
YUPELRI net sales (Theravance Biopharma implied 35%)	$	19,085	$	19,263	$	38,415	$	35,697

Reimbursement of R&D Expenses

The R&D cost share with Viatris for which the Company contributes 35% is netted within the Company’s R&D expenses. The Company does not consider performing research and development services for reimbursement to be a part of its ordinary activities, therefore, the Company does not analogize to ASC 606 or recognize revenue. The Company recorded reimbursements received from Viatris as a reduction to R&D expenses. The Company also owes Viatris its cost share of the R&D activities carried out by Viatris that is also recorded within R&D expenses.

The following table summarizes the reduction to R&D expenses for reimbursements associated with R&D expenses directly incurred by the Company:


	Three Months Ended June 30,				Six Months Ended June 30,
(In thousands)	2024		2023		2024		2023
Viatris	$	296	$	1,947	$	485	$	3,700

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.


	June 30,
(In thousands)	2024		2023
Cash and cash equivalents	$	46,345	$	105,596
Restricted cash		836		836
Total cash, cash equivalents, and restricted cash	$	47,181	$	106,432

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 condensed consolidated balance sheets.

The decrease in cash, and cash equivalents, and restricted cash compared to the prior year period, was primarily due to the Company’s open market share repurchase program that commenced in December 2022 and was completed in January 2024 (see “Note 7. Completion of Capital Return Program” for more information).

The Company periodically engages in foreign exchange transactions as a part of its operations. These amounts are included in the Company’s condensed consolidated statements of operations within “Interest income and other income (expense), net”. For the three and six months ended June 30, 2024 and 2023, the Company’s net realized and unrealized foreign currency gains (losses) were not material.

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

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classified within Level 2 is based on quoted prices for similar instruments in active markets; quoted prices for identical or similar instruments in markets that are not active; or model-driven valuations whose inputs are observable or whose significant value drivers are observable. Observable inputs may include benchmark yields, reported trades, broker/dealer quotes, issuer spreads, two-sided markets, benchmark securities, bids, offers, and reference data including market research publications.

Available-for-sale securities are summarized below:


		June 30, 2024
				Gross		Gross
		Amortized		Unrealized		Unrealized		Estimated
(In thousands)		Cost		Gains		Losses		Fair Value
US government securities	Level 1	$	22,260	$	—	$	(2)	$	22,258
Commercial paper	Level 2		39,432		—		(20)		39,412
Marketable securities			61,692		—		(22)		61,670
Money market funds	Level 1		24,842		—		—		24,842
Total		$	86,534	$	—	$	(22)	$	86,512


		December 31, 2023
				Gross		Gross
		Amortized		Unrealized		Unrealized		Estimated
(In thousands)		Cost		Gains		Losses		Fair Value
US government securities	Level 1	$	29,848	$	—	$	(29)	$	29,819
US government agency securities	Level 2		4,428		—		(8)		4,420
Corporate notes	Level 2		28,670		4		(32)		28,642
Marketable securities			62,946		4		(69)		62,881
Money market funds	Level 1		26,179		—		—		26,179
Total		$	89,125	$	4	$	(69)	$	89,060

As of June 30, 2024, all of the Company’s available-for-sale securities had contractual maturities within six months, and the weighted-average maturity of marketable securities was approximately two months. There were no transfers between Level 1 and Level 2 during the periods presented, and there have been no material changes to the Company’s valuation techniques during the three and six months ended June 30, 2024.

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