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AcelRx Pharmaceuticals Reports Third Quarter 2020 Financial Results

On November 5, 2020 AcelRx Pharmaceuticals, Inc. (Nasdaq: ACRX), (AcelRx), a specialty pharmaceutical company focused on the development and commercialization of innovative therapies for use in medically supervised settings, reported its third quarter 2020 financial results (Press release, AcelRx Pharmaceuticals, NOV 5, 2020, View Source [SID1234570222]).

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"The third quarter represented one of our most active and successful quarters since DSUVIA’s approval," said Vince Angotti, Chief Executive Officer of AcelRx. "We’ve made significant progress on our revenue growth strategy, highlighted by our oral and dental surgery collaboration with Zimmer Biomet, the addition of DSUVIA to the Department of Defense Joint Deployment Formulary and our new U.S. Army contract. With the recent publication of data supporting DSUVIA’s strong value proposition, we have gained momentum in DSUVIA’s use within existing hospital and ambulatory surgery center customers, and the rate of scheduled formulary reviews. Progress within the Department of Defense continues and we expect the initial ordering of DSUVIA for deployed troops in the fourth quarter."

Third Quarter Highlights

In July, AcelRx entered into a distribution agreement with Zimmer Biomet to market DSUVIA within the dental and oral surgery markets in the United States exclusively through Zimmer Biomet’s Dental division, expanding U.S. availability of DSUVIA. It is estimated that the applicable market in dental surgeries is over 7 million annual procedures.
In July, AcelRx completed a $10 million common stock offering priced at the market with two leading life science investors.
In August, AcelRx announced the publication of a study entitled "Reduced Opioid Use and Reduced Time in the Postanesthesia Care Unit Following Preoperative Administration of Sublingual Sufentanil in an Ambulatory Surgery Setting," by Christian Tvetenstrand, MD and Michael Wolff, MD, in the Journal of Clinical Anesthesia and Pain Management. Highlights of the publication included a greater than 50% overall reduction in opioids administered perioperatively and a 34% reduction in PACU time in the DSUVIA-treated patients compared to historical controls.
In August, AcelRx announced an investigator-initiated study with Cleveland Clinic that will assess the effects of DSUVIA on post-operative recovery from orthopedic surgery.
In September, AcelRx announced that the U.S. military’s access to DSUVIA had been expanded with the addition of DSUVIA to the Department of Defense Joint Deployment Formulary (JDF).
In September, the U.S. Army awarded AcelRx with an initial contract of up to $3.6 million over four years for the purchase of DSUVIA to support a DoD study to aid the development of clinical practice guidelines.
Financial Information

Cash, cash equivalents and short-term investments balance was $43.0 million as of September 30, 2020.
Net revenues for the third quarter 2020 were $1.4 million, of which approximately $1.3 million relates to product sales (compared to $0.3 million in product sales for the second quarter of 2020).
Combined R&D and SG&A expenses for the third quarter of 2020 totaled $8.6 million, a significant reduction compared to $12.0 million for the third quarter of 2019. Excluding stock-based compensation expense, these amounts were $7.5 million for the third quarter of 2020 compared to $10.7 million for the third quarter of 2019. The decrease in combined R&D and SG&A expenses in the third quarter of 2020 was primarily due to a reduction of $1.8 million in personnel costs and a $1.1 million reduction in DSUVIA-related commercialization expenses.
Net loss for the third quarter of 2020 was $8.9 million, or $0.10 per basic and diluted share, compared to $12.7 million, or $0.16 per basic and diluted share, for the third quarter of 2019.
Webcast and Conference Call Information
As previously announced, AcelRx will host a live webcast Thursday, November 5, 2020 at 4:30 p.m. Eastern Time (1:30 p.m. Pacific Time) to discuss these financial results and provide other corporate updates. The webcast is accessible by visiting the Investors page of AcelRx’s website at www.acelrx.com and clicking on the webcast link. The webcast will be accompanied by a slide presentation. Investors who wish to participate in the conference call may do so by dialing (866) 361-2335 for domestic callers, (855) 669-9657 for Canadian callers or (412) 902-4204 for international callers. A webcast replay will be available on the AcelRx website for 90 days following the call by visiting the Investor page of AcelRx’s website at www.acelrx.com.

About DSUVIA (sufentanil sublingual tablet), 30 mcg
DSUVIA, known as DZUVEO in Europe, approved by the FDA in November 2018, is indicated for use in adults in certified medically supervised healthcare settings, such as hospitals, surgical centers, and emergency departments, for the management of acute pain severe enough to require an opioid analgesic, and for which alternative treatments are inadequate. DSUVIA was designed to provide rapid analgesia via a non-invasive route and to eliminate dosing errors associated with intravenous (IV) administration. DSUVIA is a single-strength solid dosage form administered sublingually via a single-dose applicator (SDA) by healthcare professionals. Sufentanil is an opioid analgesic previously only marketed for IV and epidural anesthesia and analgesia. The sufentanil pharmacokinetic profile when delivered sublingually avoids the high peak plasma levels and short duration of action observed with IV administration. The European Commission approved DZUVEO for marketing in Europe in June 2018 and AcelRx is currently in discussions with potential European marketing partners.

Natera Reports Third Quarter 2020 Financial Results

On November 5, 2020 Natera, Inc. (NASDAQ: NTRA), a pioneer and global leader in cell-free DNA testing, reported financial results for the third quarter ended September 30, 2020 and provided an update on recent business progress (Press release, Natera, NOV 5, 2020, View Source [SID1234570221]).

Recent Accomplishments & Highlights

Processed approximately 262,000 tests in the third quarter of 2020 compared to approximately 200,200 tests processed in the third quarter of 2019, an increase of 31%.
Generated total revenues of $98.1 million in the third quarter of 2020 compared to $77.9 million in the third quarter of 2019, an increase of 26%. Generated product revenues of $93.3 million in the third quarter of 2020 compared to $66.9 million in the third quarter of 2019, an increase of 39.5%.
Practice Bulletin published by American College of Obstetrics and Gynecology (ACOG) and Society of Maternal Fetal Medicine (SMFM) supporting use of Non-Invasive Prenatal Testing (NIPT) for all pregnancies.
Received positive final coverage decision from Medicare for Signatera in colorectal cancer and commenced full commercial launch.
Received draft local coverage determination from Medicare for Signatera in immunotherapy monitoring.
Presented new Signatera data at the 2020 European Society for Medical Oncology.
Announced two prospective phase 2 trials to evaluate early stage breast cancer patients with leading pharmaceutical companies.
Successfully completed $287.5 million follow-on equity offering.
"Q3 was an exceptional quarter," said Steve Chapman, Natera’s Chief Executive Officer. "We delivered a significant increase in volumes over an already strong second quarter. We are pleased with the initial positive reaction to the ACOG/SMFM Practice Bulletin, and continue to execute nicely on our oncology and organ health commercialization plans. After years of hard work, we’re now seeing the new businesses contribute to our strong revenue growth. We are very excited about our current trajectory and are significantly raising our 2020 revenue guidance."

Third Quarter Ended September 30, 2020 Financial Results

Total revenues were $98.1 million in the third quarter of 2020 compared to $77.9 million for the third quarter of 2019. The increase in total revenues was driven primarily by a 39.5% increase in product revenues compared to the third quarter of 2019. Natera processed 262,000 tests in the third quarter of 2020, including approximately 249,300 tests accessioned in its laboratory, compared to 200,200 tests processed in the third quarter of 2019 including approximately 187,200 tests accessioned in its laboratory.

In the three months ended September 30, 2020, Natera recognized revenue on approximately 238,600 tests for which results were reported to customers in the period (tests reported), including approximately 226,700 tests accessioned in its laboratory, compared to approximately 189,600 tests reported, including approximately 178,000 tests accessioned in its laboratory, in the third quarter of 2019.

Gross profit* for the three months ended September 30, 2020 and 2019 was $46.3 million and $34.0 million, respectively, representing approximately 47% and 44% gross margin*, respectively. The company was able to achieve higher margins in the third quarter of 2020 primarily due to improved cost of goods sold per test and increased revenues.

Total operating expenses, representing research and development expenses and selling, general and administrative expenses, for the third quarter of 2020 were $102.1 million, compared to $69.5 million in the same period of the prior year. The increases were primarily driven by headcount growth to support new product offerings.

Loss from operations for the third quarter of 2020 was $55.8 million compared to $21.1 million for the same period of the prior year, which included a gain from the sale of the Evercord cord blood banking business of approximately $14.4 million.

Net loss for the third quarter of 2020 was $58.3 million, or ($0.72) per diluted share, compared to net loss of $23.1 million, or ($0.33) per diluted share, for the same period in 2019. Weighted average shares outstanding were approximately 80.9 million in the third quarter of 2020.

At September 30, 2020, Natera held $809.7 million in cash, cash equivalents, short-term investments and restricted cash, compared to $441.0 million as of December 31, 2019. As of September 30, 2020, Natera had a total outstanding debt balance of $250.0 million, comprised of $50.1 million with accrued interest under its $50.0 million line of credit with UBS at a variable interest rate of 30-day LIBOR plus 110 bps and a net carrying amount of $200.0 million under its seven-year convertible senior notes. The convertible senior notes were issued in April 2020 for net proceeds of $278.9 million, of which a portion was used to repay the $79.2 million obligations under the company’s 2017 term loan with OrbiMed Advisors. The gross principal balance outstanding for the convertible senior notes was $287.5 million as of September 30, 2020.

Financial Outlook

Natera anticipates 2020 total revenue of $380 million to $390 million; 2020 cost of revenues to be approximately 51% to 54% of revenues; selling, general and administrative costs to be approximately $270 million to $280 million; research and development costs to be $90 million to $95 million, and net cash burn to be $140 million to $150 million**.

* Gross profit is calculated as GAAP total revenues less GAAP cost of revenues. Gross margin is calculated as gross profit divided by GAAP total revenues.

** Cash burn is calculated as the sum of GAAP net cash used by operating activities (estimated for 2020 to be between $132 million and $142 million) and GAAP net purchases of property and equipment (estimated for 2020 to be approximately $8 million).

ViewRay Reports Third Quarter 2020 Results

On November 5, 2020 ViewRay, Inc. (Nasdaq: VRAY) (the "Company") reported financial results for the third quarter ended September 30, 2020 (Press release, ViewRay, NOV 5, 2020, View Source [SID1234570220]).

Third Quarter 2020 Highlights:

Total revenue of $10.1 million, primarily from one revenue unit, compared to $20.9 million, primarily from three revenue units, in the third quarter of 2019.
Received four new orders for MRIdian systems totaling $23.4 million, compared to eight new orders totaling $34.9 million in the third quarter of 2019.
Total backlog was $238.9 million as of September 30, 2020, compared to $230.7 million as of September 30, 2019.
Cash and cash equivalents were $163.9 million as of September 30, 2020.
Effective October 30, 2020, the Company amended its term loan with Silicon Valley Bank, deferring amortization until November 2022. Included in the amendment was an expansion of the facility from $56 million to $58 million, the extension of maturity from December 2023 to November 2025, and other improvements to the interest rate and select covenants.
"We are pleased with our third quarter results in light of the economic backdrop," said Scott Drake, President and CEO. "MRIdian’s clinical, strategic, and economic value propositions are resonating with customers. We received four orders in Q3, including an order from the Veterans Administration, which was a first for ViewRay. We look forward to partnering with the VA to provide the benefits of MRIdian to our nation’s heroes. In addition, we continue to demonstrate fiscal discipline on operating expenses and working capital, and reported the amendment of our term loan which extends maturity and defers amortization payments until late 2022."

Three Months Ended September 30, 2020 Financial Results:

Total revenue for the three months ended September 30, 2020 was $10.1 million compared to $20.9 million for the same period last year.

Total cost of revenue for the three months ended September 30, 2020 was $11.2 million compared to $20.3 million for the same period last year.

Total gross profit (loss) for the three months ended September 30, 2020 was $(1.1) million, compared to $0.6 million for the same period last year.

Total operating expenses for the three months ended September 30, 2020 were $23.9 million, compared to $32.3 million for the same period last year.

Net loss for the three months ended September 30, 2020 was $28.1 million, or $0.19 per share, compared to $20.8 million, or $0.21 per share, for the same period last year.

ViewRay had total cash and cash equivalents of $163.9 million at September 30, 2020.

Nine Months Ended September 30, 2020 Financial Results:

Total revenue for the nine months ended September 30, 2020 was $38.6 million compared to $71.3 million for the same period last year.

Total cost of revenue for the nine months ended September 30, 2020 was $42.8 million compared to $72.9 million for the same period last year.

Total gross profit (loss) for the nine months ended September 30, 2020 was $(4.2) million compared to $(1.5) million for the same period last year.

Total operating expenses for the nine months ended September 30, 2020 were $76.4 million, compared to $86.9 million for the same period last year.

Net loss for the nine months ended September 30, 2020 was $81.8 million, or $0.55 per share, compared to $85.0 million, or $0.87 per share, for the same period last year.

Conference Call and Webcast

The dial-in numbers are (844) 277-1426 for domestic callers and (336) 525-7129 for international callers. The conference ID number is 9819479. A live webcast of the conference call will be available on the investor relations page of ViewRay’s corporate website at View Source

After the live webcast, a replay will remain available online on the investor relations page of ViewRay’s website, under "Financial Events and Webinars", for 14 days following the call. In addition, a telephonic replay of the call will be available until November 12, 2020. The replay dial-in numbers are (855) 859-2056 for domestic callers and (404) 537-3406 for international callers. Please use the conference ID number 9819479.

Cryoport Reports 2020 Third-Quarter Results

On November 5, 2020 Cryoport, Inc. (NASDAQ: CYRX) ("Cryoport", "our" or "we"), a global leader in temperature-controlled supply chain solutions for the life sciences industry, reported financial results for the Third Quarter and nine-month period ended September 30, 2020 (Press release, Cryoport, NOV 5, 2020, View Source [SID1234570219]).

"Our Third Quarter results reflect solid performance and positive trends for Cryoport, powered by continued strength in Biopharma, with regenerative medicine clinical trials supported by Cryoport increasing to 517, and Reproductive Medicine, which benefited from increased activity as fertility clinics resumed operations as well as the expansion of our services to additional fertility clinic networks. I am proud of our team’s relentless passion and commitment to patients and clients around the world as we boldly fight the COVID-19 pandemic and continue to serve our clients by delivering lifesaving therapies without interruption. Our team’s resilient mindset, combined with our strategic capabilities and execution excellence, increases our optimism for a continued ramp in 2020 and strong momentum entering into 2021," said Jerrell Shelton, Chairman and CEO.

"This was a seminal quarter for the advancement of Cryoport’s vision, mission and strategy. We successfully signed definitive agreements for our milestone acquisitions of MVE Biological Solutions and CRYOPDP during the Third Quarter and closed both on October 1, 2020. With these important acquisitions, we instantly expanded to 30 locations across the globe, as well as broadened our capabilities into the full range of temperature-controlled supply chain solutions, covering controlled room temperature (CRT) down to cryogenic temperatures (-196°C). We also broadened our capabilities by adding deep proficiencies in storage and transport devices that extend our abilities to provide more complete solutions without dependence on outside resources. As a result, we are now in a strengthened competitive position in all our markets, Animal Health, Reproductive Medicine and especially the Biopharma market, which is propelled by Regenerative Medicine. Most important, we are positioned better than ever to support the anticipated dozens of commercial therapies around the globe, which we believe will be the driving force behind our revenue growth over the next five years.

"To partially fund the purchase of MVE, we partnered with Blackstone, a world leading global investment business with special interests in the life sciences industry. Cryoport now operates as an operating holding company, with a family of companies that provide complementary and world-beating temperature-controlled supply chain solutions for the life sciences industry and focused on the Biopharma, Reproductive Medicine and Animal Health markets. This is especially important in our continuing development of capabilities for supporting the regenerative medicine ecosystem, which has a growing number of therapies entering development and many approaching global commercialization. As the undisputed market leader for temperature-controlled supply chain solutions for the life sciences industry, we have created a new, enhanced platform for continued long-term growth. We are proud to have the size, global scale and opportunity to continue to expand our support of the rapidly growing Regenerative Medicine ecosystem as the market continues to demonstrate rapid development and our pipeline of potential commercial customers is the largest in our history.

"With our newly developed platform for serving the life sciences industry with advanced temperature-controlled supply chain solutions and a rapidly growing market to which we are committed, our future has never been brighter," concluded Mr. Shelton.

Biopharma
In the Third Quarter, Novartis renewed its agreement with Cryoport for temperature-controlled supply chain support of KYMRIAH; this follows Gilead’s Kite renewal of its agreement with Cryoport in support of its commercial and clinical therapies in the prior quarter. Cryoport temperature-controlled supply chain solutions are integral to these companies’ ability to provide their respective life-saving therapies to patients.

The Third Quarter also marked the first revenue generated from the recently approved commercial therapy TECARTUS from Gilead. While the revenue generated from TECARTUS was small in the Third Quarter, we expect it and bluebird bio’s ZYNTEGLO to ramp in the fourth quarter and throughout 2021.

Subsequent to quarter end, Bristol Myers Squibb selected Cryoport to support the potential global launch of Lisocabtagene Maraleucel (Liso-Cel), which was recently validated by the European Medicines Agency (EMA), marking Cryoport’s fifth long-term agreement supporting the global commercial launch of a cell and gene therapy.

We continue to grow our leading position in the Biopharma market and are pleased to also report continued strong clinical trial growth for the Third Quarter. As a note, of the 56 clinical trials suspended at the end of the First Quarter due to the COVID-19 pandemic, none remain suspended as of the end of the Third Quarter. Moreover, clinical trial activity has largely rebounded to pre-COVID levels and continues to accelerate due to successful execution by Cryoport.

Global clinical trial activity continues to increase and Cryoport now supports a net total of 517 clinical trials as of September 30, 2020 compared to 425 as of September 30, 2019. The number of those trials in Phase III is 66, compared to 54 as of September 30, 2019. Of the 517 total trials Cryoport supports, 411 are in the Americas, 83 in EMEA (Europe, the Middle East and Africa) and 23 in APAC (Asia Pacific). This compares to 360 in the Americas, 55 in EMEA and 10 in APAC as of September 30, 2019. Additionally, due to the increase in demand for support in the APAC region, Cryoport Systems and CRYOPDP anticipate establishing their first two jointly operated logistics centers in Singapore and Osaka, Japan in the Fourth Quarter of 2020.

A total of seven (7) Cryoport supported Marketing Authorization Applications (MAA’s) or Biologic License Applications (BLA’s) have been filed in 2020, and a further two (2) are expected to be filed in the Fourth Quarter, based on internal information and forecasts from the Alliance for Regenerative Medicine (ARM). We also anticipate up to 21 MAA or BLA submissions for Cryoport-supported products in 2021.

Reproductive Medicine
Global adjustments to COVID-19 restrictions allowed most fertility clinics to reopen, which led to a significant ramp in Reproductive Medicine revenue in the Third Quarter which equated to a 62% increase compared to the same period in the prior year, led by our partnership with Inception Fertility. Additionally, we signed partnerships with Cord Blood Registry and Generate Life in the Third Quarter, which are expected to continue to spur our growth as we continue to expand in this important global market.

Animal Health
Animal Health revenue remained steady for the three months ended September 30, 2020. Our pipeline of potential new clients continues to grow and is expected to generate additional revenue in the Fourth Quarter and in 2021.

Covid-19 Activity
Mr. Shelton commented, "As the development and distribution landscape for potential COVID-19 vaccines and treatments is still developing, we do not yet know the roles we may play. However, in the fight against the COVID-19 pandemic, we are highly confident that we will be a part of the global solution as we are now supporting 26 separate clinical trials, including a leading vaccine candidate, across our business units:

Cryoport Systems – 15 trials
CRYOPDP – 5 trials
CRYOGENE – 6 trials
Additionally, recently MVE received several orders from government tenders and through our distribution network for storage systems that are destined for use in storing pandemic related materials.

"We are committed to our mission of supporting life and health by delivering reliable and comprehensive temperature-controlled supply chain solutions for the life sciences through our innovation, advanced technologies, and global supply chain network, and are proud to be supporting these important and timely clinical stage vaccines and therapies."

Financial Highlights

Revenue increased 17% to $11.2 million for the three-month period ended September 30, 2020, compared with the same period in the prior year and 23% to $30.3 million for the nine-month period ended September 30, 2020, compared with the same period in the prior year.
Biopharma revenue increased $1.0 million or 12.8%, to $8.4 million in the three months ended September 30, 2020, compared to $7.5 million for the same period in 2019 and $3.2 million or 15.7%, to $23.2 million for the nine-month period ended September 30, 2020, compared with the same period in the prior year.
Commercial Biopharma revenue decreased $0.2 million or 7.7%, to $2.4 million for the three months ended September 30, 2020, compared to $2.6 million for the same period in 2019 and $2.0 million or 34.9%, to $7.9 million for the nine-month period ended September 30, 2020, compared with the same period in the prior year.
Reproductive Medicine revenue increased $0.5 million or 61.6%, to $1.2 million for the three months ended September 30, 2020, compared to $0.7 million for the same period in 2019 and $0.4 million or 16.5% to $2.6 million for the nine-month period ended September 30, 2020, compared with the same period in the prior year.
Animal Health revenue held steady at $0.2 million and $0.7 million in revenue for the three and nine months ended September 30, 2020, respectively, compared with the same period in the prior year.
Gross margin was 54% for the three and nine months ended September 30, 2020, compared to 48% and 50% for the same periods in the prior year.
Operating costs and expenses decreased by $0.2 million for the three-month period ended September 30, 2020, compared to the same period in the prior year. The Third Quarter includes $5.8 million in consulting and professional services related to the acquisitions of MVE Biological Solutions and CRYOPDP, as well as reflecting an increase in employee related costs by $2.2 million as a result of building out our global infrastructure and capabilities. Further, consulting fees focused on software, technology and engineering projects to further enhance our current solutions and develop new technologies for the markets we serve increased by $1.2 million. These investments in infrastructure, competencies and technology development are critical to support the continuing scaling of our business and demand for Cryoport’s solutions. In comparing the two periods, the increases in operating costs and expenses during the Third Quarter were more than offset by the $10.4 million in one-time accelerated stock-based compensation expenses recorded during the Third Quarter of 2019.
Net loss for the three-month period ended September 30, 2020 was $11.4 million, or $0.29 per share, compared to a net loss of $12.5 million, or $0.35 per share in the same period in 2019.
Net loss for the nine-month period ended September 30, 2020 was $21.2 million, or $0.55 per share, compared with $17.4 million, or $0.54 per share, in the same nine-month period in 2019.
Adjusted EBITDA for the three-month period ended September 30, 2020 was ($1.5 million), compared with $1.3 million in the same period in the prior year. Adjusted EBITDA for the nine-month period ended September 30, 2020, was ($4.0 million), compared with $1.3 million in the same nine-month period in the prior year.
Cryoport reported $202.9 million in cash, cash equivalents and short-term investments as of September 30, 2020, compared with $94.3 million as of December 31, 2019. This increase includes net proceeds of approximately $111.3 million received from a convertible debt offering during the nine-month period ended September 30, 2020.
Further information on Cryoport’s financial results is included on the attached condensed consolidated balance sheets and statements of operations, and additional explanations of Cryoport’s financial performance are provided in Cryoport’s quarterly report on Form 10-Q for the three months ended September 30, 2020, which will be filed with the Securities and Exchange Commission ("SEC") on November 6, 2020. The full report will be available on the SEC Filings section of the Investor Relations section of Cryoport’s website at www.cryoport.com.

Earnings Conference Call Information

IMPORTANT INFORMATION: A document titled "Cryoport Third Quarter 2020 in Review", providing a review of Cryoport’s recent financial and operational performance and a general business update, will be issued at 4:05 pm ET on Thursday, November 5, 2020. The document is designed to be read by investors before the questions and answers conference call and can be accessed at http://ir.cryoport.com/events-and-presentations.

Cryoport management will host a conference call at 5:00 pm ET on November 5, 2020. The conference call will be in the format of a questions and answers session and will address any queries investors have regarding the Company’s reported results.

Live webcast:

‘Investor Relations’ section at www.cryoport.com or at this link. Please allow 10
minutes prior to the call to visit this site to download and install any necessary audio
software.

Questions and answers will be recorded and available approximately three hours after completion of the live event on the Investor Relations section of the Company’s website at www.cryoport.com for a limited time. To access the replay of the questions and answers, please follow this link. A dial-in replay of the call will also be available, to those interested, until November 12, 2020. To access the replay, dial +1 (844) 512-2921 (United States) or +1 (412) 317-6671 (International) and enter replay pin number: 4671157.

Theravance Biopharma, Inc. Reports Third Quarter 2020 Financial Results and Provides Business Update

On November 5, 2020 Theravance Biopharma, Inc. ("Theravance Biopharma" or the "Company") (NASDAQ: TBPH) reported financial results for the third quarter ending September 30, 2020 (Press release, Theravance, NOV 5, 2020, View Source [SID1234570218]). Theravance Biopharma’s Total Revenue for the third quarter 2020 was $18.3 million. Operating loss was $76.6 million, or $61.1 million excluding share-based compensation expense. Cash, cash equivalents and marketable securities totaled $358.3 million as of September 30, 2020.

In connection with the commercialization of YUPELRI, the Company is entitled to a share of U.S. profits and losses (65% to Mylan; 35% to the Company) pursuant to its agreement with Mylan. While Mylan records the total Net Sales of YUPELRI within its financial statements, Theravance Biopharma’s implied 35% share of net sales for YUPELRI during Q3 2020 was $13.0 million (up from $5.8 million in Q3 2019). Going forward, Theravance Biopharma will report its implied 35% of Net Sales for YUPELRI in public communications and in the Company’s quarterly SEC filings on Form 10-Q and Form 10-K.

"YUPELRI gained market share, delivered sales growth versus the second quarter and achieved brand profitability for Theravance Biopharma thanks to the efforts of the Mylan and Theravance Biopharma commercial teams. Based on the constraints posed by the pandemic, the team implemented a hybrid model of virtual selling, utilizing digital resources and in-person meetings when and where permitted," said Rick E Winningham, Chief Executive Officer.

"Despite ongoing challenges and the uncertain environment created by the global pandemic, we have seen a significant uptick in clinical trial enrollment. We therefore have more confidence in guiding to Phase 3 results for ampreloxetine for symptomatic neurogenic orthostatic hypotension (nOH) and for TD-1473 Phase 2b results in ulcerative colitis and Phase 2 results in Crohn’s disease in Q3 2021."

"We completed the TD-8236 Phase 1 Part C and Phase 2a Lung Allergen Challenge (LAC) study. The LAC study represented the first time an inhaled JAK inhibitor was studied in such a model. We met our primary objectives with the Phase 1 Part C study in moderate-to-severe asthmatics dosing TD-8236 with an inhaled corticosteroid. Decreases in key inflammatory biomarkers were seen in the TD-8236 plus steroid arm versus the steroid alone arm. Gene expression and cytokine data from the Phase 1 Part C is still under analysis. While we are still reviewing the full data set, TD-8236 as a single agent did not meet the primary objective of the Phase 2a LAC study."

"In regard to TD-0903, we have had a chance to review the Phase 1 data. Results showed favorable safety and tolerability profile across the full range of nebulized doses and low systemic levels of TD-0903 in the systemic circulation, consistent with the lung-selective design. This has given us confidence as we continue to dose patients in the Phase 2 COVID-19 trial, which is being conducted in multiple locations around the world with results expected in Q2 2021."

Corporate Highlights

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
Overall market challenges remain due to COVID-19, yet YUPELRI increased market share and achieved quarter-over-quarter net sales growth of 22%; achieved stand-alone brand profitability in Q3 2020
Data as of July 2020 show that YUPELRI achieved 17.4% share (up from 16% in April 2020) of the long-acting nebulized bronchodilator market and 93% share (up from 91.8% in Q2 2020) of the nebulized LAMA market; market data reflects IQVIA Retail Data and the Durable Medical Equipment (DME) market segment
Key Pipeline Progress

The COVID-19 pandemic has made it difficult to operate a business in many ways and none more so than in clinical trials. Despite the challenges, Theravance Biopharma has been encouraged by the response to our ongoing clinical trial recruitment efforts. By design, both ampreloxetine and TD-1473 clinical programs employ geographical diversity, which has allowed the Company to continue to work closely with sites to continue enrollment where possible.

Ampreloxetine (TD-9855, norepinephrine reuptake inhibitor (NRI) for symptomatic nOH):

Ongoing registrational program in symptomatic nOH comprised of:
Phase 3 four-week treatment study (SEQUOIA) to demonstrate efficacy expected to read out in Q3 2021
Phase 3 four-month open-label study followed by a six-week randomized withdrawal phase (REDWOOD) to demonstrate durability of response
Phase 3 26-week open-label study (OAK), which is a long-term extension study that will be ongoing at the time of registration, to allow subjects completing REDWOOD to have continued access to ampreloxetine for up to 3.5 years and to collect safety and tolerability data over the course of treatment
Given the ongoing pandemic and the fragility of the patient population, the Company worked with the U.S. Food and Drug Administration (FDA) and other regulatory agencies to update the protocol for these clinical trials to accommodate a decentralized approach in which patients can participate in the majority of the study from home without needing to attend clinic visits; this infrastructure, leveraging a telemedicine platform and in-home healthcare assessments, is now being rolled out globally.
TD-1473 (gut-selective oral pan-Janus kinase (JAK) inhibitor for inflammatory intestinal diseases):

RHEA (this program consists of 3 separate studies in Ulcerative Colitis):
Phase 2b eight-week placebo-controlled dose-finding induction study expected to read out in Q3 2021
Phase 3 eight-week placebo-controlled dose-confirming induction study to start after dose selection based on Phase 2b Induction Study results (to be initiated post-Janssen opt-in)
Phase 3 44-week placebo-controlled maintenance study in which subjects roll over from either the Phase 2b or Phase 3 Induction Study
DIONE:
Phase 2 placebo-controlled induction study in Crohn’s disease expected to read out in Q3 2021 with patients given the potential to continue to receive ongoing access to TD-1473 as part of a long-term extension study
TD-5202 (gut-selective irreversible JAK3 inhibitor for inflammatory intestinal diseases):

TD-5202 was generally well-tolerated as a single oral dose up to 2,000 milligrams and as a twice-daily oral dose up to 2,000 milligrams total per day given for 10 consecutive days in healthy subjects
TD-8236 (lung-selective inhaled pan-JAK inhibitor for inflammatory lung diseases):

The Part C extension portion of the Phase 1 trial assessing additional biomarkers in moderate-to-severe asthmatics demonstrated biomarkers of JAK target engagement (pSTAT1 and pSTAT6) were reduced in cellular fractions of bronchoalveolar lavage fluid after 7 days of once-daily dosing at a dose level of 1500 µg
TD-8236 is the first JAK inhibitor to be studied in a Phase 2a Lung Allergen Challenge (LAC) study; TD-8236 had no impact on decrease in lung function (FEV1) following the LAC study after 14 days of once-daily dosing at dose levels of 150 µg and 1500 µg
FeNO was reduced at 1500 µg consistent with previous studies; lack of FeNO response at 150 µg and lack of effect on late asthmatic response (LAR) at 150 µg was expected based on previous studies
TD-8236 engages the JAK mechanism at a dose of 1500 µg as evidenced by the reductions in FeNO consistent with Phase 1; lack of effect on the LAR at 1500 µg in the LAC study was inconsistent with expectations
The collective data set (pre-clinical, Phase 1, Phase 2a) demonstrates TD-8236 engages the JAK mechanism at a dose of 1500 µg as evidenced by the reduction in FeNO and reductions in pSTAT. The Company will continue to analyze the data set including the forthcoming gene expression and cytokine data from the Phase 1 Part C study.

TD-0903 (nebulized lung-selective pan-JAK inhibitor for acute hyperinflammation of the lung in COVID-19 and chronic inflammation for the prevention of lung transplant rejection):

For treatment of Acute Lung Injury caused by COVID-19

Completed Phase 1 study to assess the safety, tolerability and pharmacokinetics (PK) of single- and multiple-ascending doses (SAD/MAD) in healthy volunteers; data provided confidence to continue dosing patients in a Phase 2 study
Favorable safety and tolerability profile across the full range of nebulized doses from 1 to 10 mg after once-daily dosing for 7 days
Low systemic levels of TD-0903 in the blood, consistent with lung-selective design
PK profile supports long duration of exposure in the lung, consistent with pre-clinical models and supporting once-daily dosing
Initiated Phase 2 study in June 2020; Part 1 was a multiple dose-ascending study (from 1 to 10 mg doses) conducted in 24 hospitalized COVID-19 patients that has now completed dosing. Part 2 is a randomized, double-blind, parallel-group study evaluating efficacy and safety of one dose of TD-0903 compared with placebo in approximately 200 hospitalized COVID-19 patients; the Company expects to report results of the Phase 2 study in Q2 2021
The ongoing effects of the COVID-19 pandemic present a substantial public health and economic challenge, affecting our employees, patients, communities, clinical trial sites, suppliers, business partners and business operations. The full extent to which the COVID-19 pandemic will continue to directly or indirectly impact our business will depend on future developments that are highly uncertain, including the ongoing spread of the virus globally, and the actions taken to contain or treat it.

Economic Interest

TRELEGY (first once-daily single inhaler triple therapy for COPD)1:

3Q 2020 net sales of $251.9 million (up from $172.8 million in Q3 2019); Theravance Biopharma is entitled to approximately 5.5% to 8.5% (tiered) of worldwide net sales of the product
GSK received FDA approval to expand the label to include asthma on September 9, 2020; the European Medicines Agency accepted the regulatory submission for the treatment of asthma in adults supported by the Phase III CAPTAIN study
GSK received a Complete Response Letter for the addition of the mortality indication
Notes:1 As reported by Glaxo Group Limited or one of its affiliates (GSK); reported sales converted to USD; economic interest related to TRELEGY (the combination of fluticasone furoate, umeclidinium, and vilanterol, (FF/UMEC/VI), jointly developed by GSK and Innoviva, Inc.) entitles the 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) 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 the Company’s investment in TRC is pledged to service outstanding notes, 25% of income from the Company’s investment in TRC is retained by the Company.

Innoviva and Theravance Respiratory Company

On June 10, 2020, the Company disclosed in a Form 8-K that it had formally objected to Theravance Respiratory Company, LLC ("TRC") and Innoviva, as the manager of TRC, regarding their proposed plan to use TRELEGY royalties to invest in certain privately-held companies, funds that would otherwise be available for distribution to the Company under the terms of the TRC LLC Agreement. The Company intends to continue to seek to protect its interests in this matter consistent with the dispute resolution procedures of the TRC LLC Agreement. In this regard, the Company initiated an arbitration proceeding against Innoviva and TRC in October 2020 challenging the authority of Innoviva and TRC to pursue such a business plan rather than distribute such funds to the Company in a manner consistent with the LLC Agreement and the Company’s 85% economic interest in TRC. An arbitration hearing is scheduled for the first quarter of 2021.

Third Quarter Financial Results

Revenue: Total revenue for the third quarter of 2020 was $18.3 million, comprised of non-cash collaboration revenue of $7.3 million primarily attributed to the Janssen collaboration agreement for TD-1473 and $11.0 million in Mylan collaboration revenue related to net sales of YUPELRI. Total revenue for the third quarter represents a $5.8 million increase over the same period in 2019. The increase was primarily due to a $7.4 million increase in Mylan collaboration revenue which was partially offset by a $1.6 million decrease in Janssen collaboration revenue. The decrease in Janssen collaboration revenue was due to a smaller portion of revenue recognized in the third quarter 2020 related to the $100.0 million upfront payment from the Janssen collaboration agreement that was entered into in February 2018.

YUPELRI: The Mylan collaboration revenue of $11.0 million represents amounts receivable from Mylan and is comprised of the Company’s implied 35% share of net sales of YUPELRI as well as its proportionate amount of the total shared costs incurred by the two companies. The non-shared YUPELRI costs incurred by us are recorded within operating expenses. While Mylan records the total net sales of YUPELRI within its financial statements, our implied 35% share of net sales of YUPELRI for the third quarter of 2020 was approximately $13.0 million. Going forward, we will report our implied 35% share of net sales for YUPELRI in future communications.

Research and Development (R&D) Expenses: R&D expenses for the third quarter of 2020 were $67.4 million, compared to $52.0 million in the same period in 2019. The $15.4 million increase was primarily due to (i) a $10.2 million increase in external-related expenses related to the advancement of our priority programs, notably the continued progression of TD-1473, ampreloxetine, TD-8236, and the initiation of TD-0903 in COVID-19; (ii) a $3.5 million increase in employee-related expenses primarily due to increases in compensation-related expenses; and (iii) a $1.3 million increase in share-based compensation expense primarily due to an increase in annual grants of share-based awards to employees. Third quarter R&D expenses included total non-cash share-based compensation of $7.8 million.

Selling, General and Administrative (SG&A) Expenses: SG&A expenses for the third quarter of 2020 were $27.5 million, compared to $25.6 million in the same period in 2019. The $1.9 million increase was primarily attributed to (i) a $1.2 million increase in employee-related expenses primarily due to increases in compensation-related expenses; (ii) a $1.2 million increase in share-based compensation expense primarily due to an increase in annual grants of share-based awards to employees; and (iii) a $0.6 million increase in facilities and other expenses. These increases were partially offset by a $1.2 million decrease in external-related expenses primarily related to legal and consulting services. Third quarter SG&A expenses included total non-cash share-based compensation of $7.8 million.

Cash, Cash Equivalents and Marketable Securities: Cash, cash equivalents and marketable securities totaled $358.3 million as of September 30, 2020.
2020 Financial Guidance

Operating Loss (excluding share-based compensation): The Company is changing financial guidance and expects full-year 2020 operating loss, excluding share-based compensation, of $225 million to $235 million. Operating loss guidance does not include:
Royalty income for TRELEGY which the Company recognizes in its statement of operations as "income from investment in TRC, LLC;" or
Potential future business development collaborations
Annual Meeting

The Company will hold its 2021 Annual General Meeting on April 27, 2021.

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 5 pm ET / 2 pm PT / 10 pm GMT. To participate in the live call by telephone, please dial (855) 296-9648 from the U.S. or (920) 663-6266 for international callers, using the confirmation code 1269525. 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 December 5, 2020. An audio replay will also be available through 8:00 pm ET on November 12, 2020 by dialing (855) 859-2056 from the U.S., or (404) 537-3406 for international callers, and then entering confirmation code 1269525.