On May 6, 2020 Theravance Biopharma, Inc. ("Theravance Biopharma" or the "Company") (NASDAQ: TBPH) reported financial results for the first quarter ended March 31, 2020 (Press release, Theravance, MAY 6, 2020, View Source [SID1234557171]). Revenue for the first quarter 2020 was $19.9 million. Operating loss was $72.5 million, or $57.2 million excluding share-based compensation expense. Cash, cash equivalents and marketable securities totaled $492.1 million as of March 31, 2020.
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"As we are each challenged by COVID-19 – personally and professionally, I want to thank our employees who have supported the communities we serve: the most vulnerable with respiratory illness and immune deficiencies, healthcare professionals across the globe and each other in extremely troublesome times. I could not be prouder," said Rick E Winningham, Chief Executive Officer. "Theravance Biopharma moved to remote working conditions in early March 2020 for the vast majority of our workforce. Our past investment in technology infrastructure is enabling us to rapidly shift and service our business. Our geographic diversification of clinical trial sites as well as supply chain is minimizing impact on our clinical trial programs. The commitment of our lab-based personnel to work in our laboratories during this time has been crucial to continued progress of our pipeline programs."
"Our commercial team remains focused on delivering YUPELRI to the COPD community – always a vulnerable community and especially during this pandemic – to both the people with COPD and the healthcare professionals that treat them; our team has been continuously available to support them with YUPELRI. As the only once-daily nebulized maintenance therapy for COPD, we believe YUPELRI has made a difference for the community during these challenging times."
"We are well-capitalized to continue our pipeline momentum. We have significantly accelerated internal research and development efforts on TD-0903, a lung-selective nebulized JAKi with the potential to treat hospitalized patients with Acute Lung Injury (ALI) caused by COVID-19 to prevent progression to Acute Respiratory Distress Syndrome (ARDS) and the need for assisted ventilation. The learnings from the early clinical experience of TD-0903 will not only benefit the program in its potential for the treatment of COVID-19 lung hyperinflammation but will inform the broader clinical program in other severe inflammatory conditions of the lung. We are working in close collaboration with our partner, Janssen, on TD-1473, a gut-selective oral JAKi in development for inflammatory intestinal disease and TD-5202, gut-selective irreversible JAK3 inhibitor in development for inflammatory intestinal diseases. TD-8236, our lung-selective dry powder inhaler pan-JAK inhibitor in development for inflammatory lung disease, continues to progress. Ampreloxetine, a norepinephrine reuptake inhibitor (NRI) is under evaluation for treatment of symptomatic neurogenic orthostatic hypotension (nOH), a rare disease, in a Phase 3 clinical program. We continue to move these programs forward despite the significant hurdles imposed by social distancing and government lockdowns around the world."
"As we look ahead, as a company with a legacy in developing respiratory medicines, we hope our inhaled JAK inhibitor program can help make a meaningful contribution to the COVID-19 story as we continue to progress our other high priority programs of TD-1473 and ampreloxetine."
Corporate Highlights
Partnered with Mylan:
YUPELRI (revefenacin) inhalation solution (lung-selective nebulized long-acting muscarinic antagonist (LAMA)):
First and only once-daily, nebulized bronchodilator approved in the U.S. for the maintenance treatment of patients with chronic obstructive pulmonary disease (COPD), reimbursed by Part B Medicare program
Data as of January 2020 show that YUPELRI achieved an 87% share of the nebulized LAMA market and a 13.7% share of the long-acting nebulized market (including Durable Medical Equipment)
YUPELRI is manufactured in the United States and supply chains are monitored regularly; no disruption of supply is currently anticipated
In-person field calls on YUPELRI ceased as of mid-March 2020; as with most pharmaceuticals, sales momentum has been affected by COVID-19; the team is leveraging established relationships, digital technology, and non-personal promotion to continue the dialogue with stakeholders to continue sales growth; an "Insight and Innovation Think Tank" has been established to evolve "next practices" during the peri- and post-COVID-19 period
Key Pipeline Progress
The COVID-19 pandemic is a significant threat to public health throughout the world and the Company has been diligently monitoring and adapting to the threat. Theravance Biopharma has been evaluating each of its clinical trial programs to determine necessary modifications and working closely with regulators, ethics committees, sites, CROs and data safety monitoring boards. The Company appreciates the pragmatism, collaboration and the ongoing prioritization of the clinical trial participants and all of those caring for them. Given the significant strains on the healthcare system across the globe, Theravance Biopharma took the decision in mid-March to temporarily suspend adding new patients to the screening phase for its TD-1473 and ampreloxetine trials for 4 weeks, in order to prioritize ongoing support for patients who were already in screening and those patients who were already randomized. As a result, the studies were able to continue randomizing existing screened patients into the studies and the randomized patients were able to continue to receive study medication per the protocol requirements. Screening of new patients is now resuming in some countries in a controlled and measured fashion as individual sites confirm their ability to support the study requirements and new patients are able to be assessed for their eligibility to participate in the studies. The global nature of the TD-1473 and ampreloxetine clinical programs will allow for flexibility as COVID-19 control measures evolve in different countries. The situation is expected to continue to change at different rates in different countries around the world in response to COVID-19 interventions, and as a result it is not possible to provide an accurate re-estimation of expected completion dates for these programs at this time outside of our guidance of shifting data delivery to 2021.
In light of the COVID-19 pandemic, the Company is implementing mitigation plans to ensure patients in the clinical trials have continued access to drug supply and regular visits with their physicians for study visits per trial protocols. The Company continues to develop strategies to reduce patient needs to travel to sites in hopes of avoiding unnecessary exposure while balancing safety monitoring of investigational products. The Company is working closely with regulators and Ethics Committees and taking steps to ensure protection of patients, site personnel and clinical trial integrity.
Partnered with Janssen Biotech, Inc.:
TD-1473 (gut-selective oral pan-Janus kinase (JAK) inhibitor for inflammatory intestinal diseases):
Phase 2b/3 induction and maintenance study in ulcerative colitis (RHEA) and Phase 2 induction study in Crohn’s disease (DIONE) progressing
Data from the Phase 2b portion of the ulcerative colitis and Phase 2 Crohn’s disease studies originally planned for late-2020 and now expected in 2021
TD-5202 (gut-selective irreversible JAK3 inhibitor for inflammatory intestinal diseases):
TD-5202 was generally well tolerated as a single oral dose up to 2000 milligrams and as a twice-daily oral dose up to 2000 milligrams total per day given for 10 consecutive days in healthy subjects
Ampreloxetine (TD-9855, norepinephrine reuptake inhibitor (NRI) for symptomatic nOH):
Ongoing registrational program in symptomatic neurogenic orthostatic hypertension (nOH) comprised of two studies:
Phase 3 four-week treatment study (SEQUOIA) to demonstrate efficacy, with data originally planned for late-2020 and now expected in 2021
Phase 3 four-month open label study followed by a six-week randomized withdrawal phase (REDWOOD) to demonstrate durability of response
TD-8236 (lung-selective inhaled pan-JAK inhibitor for inflammatory lung diseases):
Part C extension portion of the Phase 1 trial assessing additional biomarkers in more severe asthmatics underway with results expected in 2H 2020
Phase 2 lung allergen challenge initiated in 4Q 2019; data expected 2H 2020
TD-0903 (lung-selective nebulized pan-JAK inhibitor for treatment of Acute Lung Injury caused by COVID-19)
Initiated Phase 1 study to assess the safety, tolerability and pharmacokinetics of single- and multiple-ascending doses (SAD/MAD) in healthy volunteers
The program will then initially move to a nested Phase 2 study in hospitalized patients with COVID-19 with the first part (an ascending dose study) being conducted in the same clinical setting in the UK as the Phase 1 study; the Medicines and Healthcare products Regulatory Agency (MHRA), United Kingdom approved the Phase 2 study today
The second part of the Phase 2 study will be a larger, multi-center study conducted at hospital-based clinical sites in the UK, and potentially other clinical sites in the European Union and United States; both of the latter territories would join the Phase 2 study program subject to review and approval of the relevant regulatory approvals required by the relevant EU National Competent Authorities and Food and Drug Administration (FDA)
Economic Interest
TRELEGY ELLIPTA (first once-daily single inhaler triple therapy for COPD)1:
1Q 2020 net sales of $249 million; Theravance Biopharma entitled to approximately 5.5% to 8.5% (tiered) of worldwide net sales of the product
GSK sNDA for asthma expected 2H 2020; The European Medicines Agency accepted the regulatory submission for the treatment of asthma in adults supported by the Phase III CAPTAIN study; FDA postponed Advisory Committee Meeting originally scheduled for April 21, 2020 regarding mortality sNDA and no additional public information available at this time
Notes:
1 As reported by Glaxo Group Limited or one of its affiliates (GSK); reported sales converted to USD; economic interest related to TRELEGY ELLIPTA (the combination of fluticasone furoate, aclidinium, and vilanterol, (FF/UMEC/VI), jointly developed by GSK and Innoviva, Inc.) entitles Company to upward tiering payments equal to approximately 5.5% to 8.5% on worldwide net sales of the product (net of Theravance Respiratory Company, LLC ("TRC LLC") expenses paid and the amount of cash, if any, expected to be used in TRC over the next four fiscal quarters). 75% of the income from Company’s investment in TRC is pledged to service outstanding notes, 25% of income from Company’s investment in TRC is retained by Company.
First Quarter Financial Results
Revenue: Revenue for the first quarter of 2020 was $19.9 million, comprised of collaboration revenue of $6.6 million primarily attributed to the Janssen collaboration agreement for TD-1473 and $11.7 million in Mylan collaboration revenue related to YUPELRI. Revenue for the first quarter represents a $14.5 million increase over the same period in 2019. The increase was primarily due to an increase in Mylan collaboration revenue related to YUPELRI and a larger portion of recognized revenue related to the $100.0 million upfront payment from the Janssen collaboration agreement that was entered into in February 2018.
Research and Development Expenses: Research and Development (R&D) expenses for the first quarter of 2020 were $66.0 million, compared to $53.8 million in the same period in 2019. The $12.2 million increase was primarily due to a $12.4 million increase in external-related expenses related to the advancement of our priority programs, notable TD-1473, ampreloxetine, and TD-8236, a $1.7 million increase in share-based compensation expense, and a $2.2 million decrease in employee-related expenses. First quarter R&D expenses included non-cash share-based compensation of $7.9 million.
Selling, General and Administrative (SG&A) Expenses: SG&A expenses for the first quarter of 2020 were $26.3 million, compared to $25.2 million in the same period in 2019. The $1.1 million increase was primarily attributed to a $1.4 million increase in share-based compensation expense, a $0.8 million increase in employee-related expenses, and a $0.6 million increase in external-related expenses. These increases were partially offset by a $1.4 million decrease related to collaboration expenses payable to Mylan in connection with the commercialization of YUPELRI which was formally launched in the first quarter of 2019. First quarter SG&A expenses included non-cash share-based compensation of $7.4 million.
Cash, Cash Equivalents and Marketable Securities Cash, cash equivalents and marketable securities totaled $492.1 million as of March 31, 2020.
2020 Financial Guidance
Operating Loss (excluding share-based compensation): The Company is not changing financial guidance and expects full-year 2020 operating loss, excluding share-based compensation, of $205 million to $225 million. Operating loss guidance does not include:
Royalty income for TRELEGY ELLIPTA which the Company recognizes in its statement of operations as "income from investment in TRC, LLC;" or
Potential future business development collaborations
Additionally, as previously announced, the Company closed its public offering of 5,500,000 ordinary shares at a price to the public of $27.00 per share on February 14, 2020. The gross proceeds to Theravance Biopharma from the offering are approximately $148.5 million, before deducting underwriting discounts and commissions and estimated offering expenses.
On March 2, 2020 Theravance Biopharma announced the closing of a private placement of $400 million in aggregate principal amount of non-recourse 9.5% fixed rate term notes. The notes are secured by a portion of the future payments the Company expects to receive related to royalties due on net sales of TRELEGY ELLIPTA, with 75% of such payments to be used to satisfy the debt obligations until the notes are repaid and the remaining 25% of such payments being directed to benefit the Company on an ongoing basis. The Company used a portion of the net proceeds from this transaction to repay in full the remaining outstanding balance of the $250 million Triple PhaRMASM 9.0% fixed rate term notes due 2033 and intends to use the remainder of the net proceeds to support continued execution of its key development programs.
Conference Call and Live Webcast Today at 5 pm ET
Theravance Biopharma will hold a conference call and live webcast accompanied by slides today at 2 pm PT / 9 pm GMT). To participate in the live call by telephone, please dial (855) 296-9648 from the US, or (920) 663-6266 for international callers, and use the confirmation code 8371418. Those interested in listening to the conference call live via the internet may do so by visiting Theravance Biopharma’s website at www.theravance.com, under the Investor Relations section, Presentations and Events.
A replay of the conference call will be available on Theravance Biopharma’s website for 30 days through June 5, 2020. An audio replay will also be available through 8:00 pm ET on May 13, 2020 by dialing (855) 859-2056 from the U.S., or (404) 537-3406 for international callers, and then entering confirmation code 8371418.