Theravance Biopharma at Jones Conference: Strategic Growth and Future Prospects

On Wednesday, 09 April 2025, Theravance Biopharma (NASDAQ: TBPH) presented at the Jones Healthcare and Technology Innovation Conference 2025, offering insights into its strategic direction. The company highlighted its robust portfolio, featuring YUPELRI, ampreloxetine, and Trelegy royalties. While YUPELRI shows promising growth, the anticipated milestones from Trelegy and the ongoing clinical trials for ampreloxetine present both opportunities and challenges for the company.

Key Takeaways

• YUPELRI achieved nearly 10% growth with $240 million in net sales last year.
• Ampreloxetine's phase 3 trial results are expected soon, with a potential NDA filing.
• Trelegy milestones could bring $150 million from GSK in 2025 and 2026.
• Theravance ended the year with $138 million in cash and no debt.
• The company anticipates minimal cash burn this year, similar to last year's $14 million.

Financial Results

• Cash Position and Debt:

- Closed last year with $88 million in cash, boosted to $138 million after a $50 million milestone payment in February.

- No debt on the books, allowing for financial flexibility.

• Cash Burn:

- Minimal cash burn expected this year, mirroring last year's $14 million, with expenses front-loaded in the first half.

• YUPELRI Sales:

- Reported $240 million in net sales last year, with a $67 million contribution in the most recent quarter.

- Aims for a $25 million milestone if net sales exceed $250 million in a year.

• Trelegy Milestones and Royalties:

- Anticipates $150 million from GSK-related milestones in 2025 and 2026.

- Royalties from Trelegy to revert in 2029 (ex-US) and 2031 (US), with a tiered rate between 5.5% and 8.5%.

Operational Updates

• Ampreloxetine (nOH/MSA):

- Completion of phase 3 trial enrollment expected mid-year, with results 26 weeks post last patient treatment.

- Prior studies showed significant benefits; current trials replicate earlier ones with slight modifications.

• YUPELRI (COPD):

- Collaboration with Viatris to enhance hospital-to-community care continuity.

- Achieved nearly 50% growth in hospital unit volume in the last quarter.

• Trelegy (COPD/Asthma):

- Generated approximately $3.5 billion in net sales last year, a 28% increase.

Future Outlook

• Ampreloxetine:

- Positive phase 3 results could lead to a priority NDA review.

- Aims for a meaningful one-point improvement in the OHSA composite score.

• YUPELRI:

- Expects sustained growth into 2025 and beyond.

- Targeting a $25 million milestone for surpassing $250 million in annual net sales.

• Trelegy:

- High probability of achieving sales milestones in 2025 and 2026.

- Royalties expected to significantly boost income starting in 2029.

Q&A Highlights

• MSA Patient Treatment:

- MSA patients often initially misdiagnosed with Parkinson's, typically managed by neurologists.

• Ampreloxetine Efficacy and Safety:

- Monitoring of supine hypertension as a potential adverse event.

- Previous data showed no increase in treatment-emergent supine hypertension.

• YUPELRI Market Position:

- No immediate competition in the nebulized LAMA market, benefiting from increased nebulization awareness.

Theravance Biopharma's comprehensive strategy underscores its commitment to leveraging its diverse portfolio for sustained growth. Readers are encouraged to refer to the full transcript for more detailed insights.

Full transcript - Jones Healthcare and Technology Innovation Conference 2025:

Unidentified speaker, Interviewer: Hi. So welcome back. I'm joined by Rick and Aziz from Theravance. So welcome both of you, and, why don't you, introduce yourself and also give us a high level overview of the portfolio of assets at Theravance?

Rick, Executive, Theravance: Sure. And and thank you for inviting us, and thanks to Jones for inviting us to present and talk about the company today. So Theravance, small company, South San Francisco. We have three primary operating, operating assets that we'll talk through today. The the first that I'll cover is a drug YUPELRI, was discovered at Theravance.

It's been developed by Theravance. It's a once daily nebulized long acting muscarinic antagonist. Now that's a mouthful to treat COPD patients. Now, effectively, it's a bronchodilator. It increases the airway, size and capacity of patients when they take it in.

It's once a day, and it's the only once a day long acting muscarinic antagonist, for COPD delivered through a nebulizer. We work with Viatris, in the marketing, and we have a 35% profit split, and that product right now throws off about $40,000,000 worth of profit, a year or two. So it's it's growing, and it's growing nicely, and we're really still tapping into the market. The second product is ampreloxetine. This is a a neurological product that's in phase three clinical trials.

We expect to finish enrollment into the open label period of the phase three study in the middle of this year, and then, into data. Gonna close the trial about, twenty weeks later, and about twenty six weeks later or so have the data. So, this is a medicine that seeks to treat patients, that have multiple system atrophy, and neurogenic orthostatic hypotension. It's a MSA is a condition like Parkinson's, but different, and we can get into that a little bit. It's a rare condition, forty thousand, patients, and we there's really nothing to treat these patients today in their neurogenic orthostatic hypotension, which really restricts these patients to a couch or a La Z Boy, relatively early in the course of their disease.

So I think we can make a significant difference. That's why we're working on it. We'll talk more about it, and we'll turn it over to Zs for the other.

Aziz, Executive, Theravance: Yeah. The the last value driver of the company is Trelegy. Trelegy is a product that GSK sells right now for the treatment of COPD and asthma, generated about 3 and a half billion of net sales last year, grew about 28%. Trelegy was originally developed by Theravance. We sold the royalty.

We we outlicensed the GSK many years ago for a royalty. We sold that royalty a couple years back, but we retained certain economics on the brand in form of milestones. We have about a hundred and 50,000,000 of milestones for hitting certain sales targets this year and next year. We actually hit the one from last year, got $50,000,000 in the bank in Feb, and the royalties actually also come back to us in about five years in 2029, and we think we'll have those royalties well into the twenty thirties. So two substantial major value drivers for Trelegy above and beyond YUPELRI and ampreloxetine.

We'll get into, I know, the financials in a little bit, but we have an excellent balance sheet, minimal cash burn, and no debt. I think that differentiates ourselves in this capital in the in the market today. We don't need to raise any money. It's a really clean financial profile. Sure.

Unidentified speaker, Interviewer: So, we are probably less than a year away from the phase three data, for the n o h opportunity. So let's start there and ampreloxetine. So you already mentioned the number of patients that are out there. So if there's no drugs, how are they being managed currently?

Rick, Executive, Theravance: Yeah. Great question there. They manage non pharmacologic, you know, efforts like, binders and things around the abdomen to keep pressure into the upper, extremities. There are medicines that raise blood pressure that they take, but the problem with the medicines that raise blood pressure, either by increasing fluid volume or, by adding effectively norepinephrine into the system, those are those are uncontrolled once they go into the body. And so it results in not only extremely variable blood pressure, but it also results in supine hypertension.

If these patients lay down, those those medicines continue to work, and in fact drive up patients', patients' blood pressure to very high levels, which is not good, obviously, for a patient who's already suffering from multiple system atrophy. The difference with ampreloxetine is it's a norepinephrine reuptake inhibitor at ten milligrams once daily, a very long half life, so no real peak to trough once you get at steady state. And the product generates additional norepinephrine in the peripheral nerves. And that's really the difference between MSA and Parkinson's disease. In MSA, the patient's nerves in the periphery are largely intact.

The problem with MSA is the central nerves in the brain, the putamen and the pons, are affected. But we can take those those intact peripheral nerves with a norepinephrine reuptake inhibitor, raise the level of norepinephrine when there's noradrenergic drive, when the patient is sitting up or when the patient is standing, increase levels of norepinephrine such that we get blood constriction of the blood vessels driving perfusion into a variety of different organ systems. And the benefit is when the patient sits down or lays down and that noradrenergic drive is absent, that those norepinephrine levels can fall, and in fact, that's one of the advantage we think that ampreloxetine will have is a lack of supine hypertension, a lack of this high blood pressure when patients are resting. And that would be a big deal. So not only on the efficacy side do we have a chance to have really unparalleled efficacy through measurement of a composite score, we also on the other side, on risk side, a chance to deliver a medicine that does not carry a risk of supine hypertension.

So very, very exciting. For me, it's, you know, sort of beyond a, you know, I've worked on drug development for a long time. This program is special because my father died of multiple system atrophy, and he had terrible neurogenic orthostatic hypotension. And the interesting aspect about nOH is it's really a key diagnostic criteria for MSA because this is what shows up first in these patients. And, I think we have a chance to make a significant difference in these patients with nOH and help them, help them to really maintain their living and their lifestyle relatively relatively unimpeded for a much longer period of time.

Unidentified speaker, Interviewer: Sure. So you have really felt it personally, the patient journey in MSA and people who have, orthostatic hypertension. So how are these people diagnosed, and, you know, what proportion of the population actually seek treatment, and are they treated by PCPs or, like, they're specialists?

Rick, Executive, Theravance: Yeah. They're they're usually treated by by neurologists, and some patients are treated by cardiologists, because obviously they they begin to complain of dizziness, and the first thought is, oh, well, there's an arrhythmia here, and so they go to the cardiologist, and they're they're seen there. Now to be diagnosed with MSA, it's a bit of a journey for any patient. There's four those forty thousand that I mentioned, those are forty thousand patients that are diagnosed today with MSA. Are there patients that are misdiagnosed and have MSA, but are diagnosed with Parkinson's disease?

Absolutely, absolutely they are. Because it does take a fairly sophisticated neurologist to do the diagnostic work, one who's familiar with dysautonomia, as well as neurological and motor symptoms. But once they're diagnosed, then they can be treated by a neurologist, a community neurologist. And of course, the simpler we can make the treatment, the easier it is for the patient to comply with the treatment, and the easier it is for the caregiver to help the patient with the treatment.

Unidentified speaker, Interviewer: What has been the clinical experience with ampreloxetine thus far in terms of safety and efficacy?

Rick, Executive, Theravance: So we ran an earlier study, an earlier phase three study, and in that phase three study, really at the behest of the FDA, we included Parkinson's patients, we included MSA patients, and we included patients with primary autonomic failure. We believed that MSA patients would show the most robust response to this agent, because of intact peripheral nerves. The status of the peripheral nerves in Parkinson's patients is much more variable. So we went back and forth several years ago with the FDA, and finally they were fairly insistent in studying this broad set of patients. So we said, we're going to over enroll, the study for MSA patients, and we're going to design the analysis plan pre specified by subgroup, so that we would we would be able to see what the effect was in each of these diseases.

Now, overall, the trial was not successful. But in the MSA population, we saw nominally and clinically significant benefit to these patients. And so what we've tried to do today, we took the data into the FDA, they agreed with our interpretation, they said it was a supportive study for an NDA, and they wanted us to do one more study that focused on MSA patients. That study that we're currently conducting and about to finish, that study is nearly a replica of the earlier study because we wanted to keep it as close to as close as we could to the earlier design. There's a couple of changes.

We've increased the randomized withdrawal, and we can come back to that randomized withdrawal period, from six weeks to eight weeks because of the earlier study, it looked like patients were still improving at six weeks. And we shortened a bit the open label portion. So it's an open label study, and patients stay on drug for a period of time, and then they go into a randomized withdrawal versus placebo for eight weeks, and are measured using the OHSA composite score. Sure.

Unidentified speaker, Interviewer: Could you give us any more color on the timeline for the phase three completion and the, like, top line readout?

Rick, Executive, Theravance: Sure. We're you know, mid year is our guidance for completing the open label portion of the study. After the open label portion, that last patient gets about twenty weeks' worth of treatment. And after twenty weeks' worth of treatment, they will have finished the randomized withdrawal period, and that randomized withdrawal period, that's when we measure the endpoint. So a few weeks after the last patient, last visit, and we have all the data, we should have, we should have data available, top line certainly, for the results of the study.

So we're not that, far away from phase three data. Given that there's really nothing that treats these patients today, we fully expect if the study is positive, a priority review, and we're already working on the NDA because everything for us to create the NDA is done except this clinical study. So we'll just yeah. This is a little bit of being free with a little words here by regulator a regulatory group would say, but we drop in the clinical data and do our NDA, and then we move forward with the filing.

Unidentified speaker, Interviewer: And, again, what are your expectations in terms of efficacy in, this particular study in terms of FX size?

Rick, Executive, Theravance: Sure. So, you know, we saw over a one point change, in, the earlier study in MSA patients. That's what we would expect to see this time. A one point change in the OHSA composite index has been shown, and we've presented this data at the American Autonomic Society, has been shown to be clinically meaningful. So our target really is one point or better in the, in the OHSA composite score, and that would would be the first drug of its kind, to show this this sort of benefit to these patients.

And the, you know, the improvement, it's not only an improvement in lightheadedness and dizziness, but it's an improvement in, vision, in coat hanger pain, in fatigue and weakness, etcetera. So there's really an overall improvement in well-being in these patients.

Unidentified speaker, Interviewer: Sure. And in terms of, safety profile, are there any signals that you would be looking out for?

Rick, Executive, Theravance: Yeah, it's a great question. And of course, since, supine hypertension is an adverse event of special interest, we're always on the lookout for that. We just presented this week at the American Academy of Neurology the analysis of supine hypertension from the earlier phase three study, which really showed that there was not an increase in treatment emergent supine hypertension with the administration of ampreloxetine. That's important because almost all of these patients struggle with supine hypertension at baseline, because their autonomic nervous system is failing. And so what we want to make sure to do is to not significantly worsen the problem of supine hypertension, and thus far, we haven't seen it.

And the reason that we haven't seen it is biology. Once that noradnergic drive is gone, I. E. Laying down for a period of time, that norepinephrine is no longer going into the being produced and going into the nerves and then the vasculature. And without that norepinephrine being there, the reuptake inhibitor really doesn't increase those levels.

So I think the story overall is pretty, is a pretty strong story because we can, we've measured norepinephrine levels, we get clinically significant increases in norepinephrine levels. Those increase, those in fact, go to an improvement in blood pressure, three minute standing blood pressure. It shows an improvement in the composite index, and we don't see an increase in supine hypertension, all consistent with the biology. And now we just have to show it in the phase three program.

Unidentified speaker, Interviewer: Sure. So assuming positive data and that you get priority review and, you know, the drug is out there in the market, help us understand your commercial, like, you know, strategy a little bit better. I was also curious, is there any way, you know, you could kind of get these, patients that are being misdiagnosed at the moment somehow, like, you know, raise awareness there to get these people on ampreloxetine as well?

Rick, Executive, Theravance: Yeah. I think there's a there's a dramatic change in in MSA patients and caregivers in their overall level of education over the past three to five years about the disease, about clinical trials, about treatment, etcetera. And it's that that is happening because for the first time, there are clinical trials like ampreloxetine to treat the primary negative symptom of MSA, and there are disease modifying trials underway, so patients are becoming more educated. That more educated patient population for us is going to be a huge benefit, because we're going to be able to communicate with advocacy organizations about the benefits and risks of ampreloxetine and help them inform the patient community. That should overall not only help inform those those patients that have the disease and have been diagnosed, but those patients that are on the periphery, that in fact have a problem, they don't think it's Parkinson's disease, and they can go into more advanced, settings to get to be diagnosed.

So I think that it's very it's very exciting because for the first time, this this set of patients with multiple system atrophy, has a degree of hope, and for better therapy.

Unidentified speaker, Interviewer: Fingers, looking forward to the data. So let's move on to your commercial assets, YUPELRI and Trelegy. So YUPELRI, you co promote with Viatris. It has been on the market for about five years, and it's still growing. So what's driving this growth, and how do you see the trajectory evolving in the next couple of years?

Rick, Executive, Theravance: Aziz, you wanna cover it?

Aziz, Executive, Theravance: Yeah. Sure. So as you mentioned, Trelegy excuse me. YUPELRI generated a little under 240,000,000 of net sales last year, $2.39. That represented just under 10% growth.

So the brand continues to grow. Last quarter was 67,000,000. We do see sometime, a little bit of a dip in q one due to seasonality and kind of inventory dynamics. We expect that to happen again, but we do continue to see growth into 2025 and well and beyond. We don't provide financial guidance given we have kind of restrictions on what we can say due to the relationship with Viatris, but, we do expect to see continued growth for YUPELRI.

One thing that's, specific to potentially 2025 and beyond is that we do have a $25,000,000 milestone if we achieve greater than 250,000,000 of net sales in any given year. So that would only mean 4% growth versus 2024. So that's definitely kind of in the viewpoint above and beyond the Trelegy milestones, which I'll speak to in a little bit. So that's and and from a profitability perspective, as Rick had mentioned earlier, we generated about 40,000,000 of cash profit last year, then that that is essentially funding the ampreloxetine cypress study that Rick had mentioned earlier and the g and a cost. So at a bottom line, at the corporate perspective, we're burning minimal cash.

So it's a really beautiful product from a from a sales perspective, but from a bottom line perspective, even more so. So those that's the big picture. Anything else on the kind of the drivers? Yeah. The market Then I'll talk about Trelegy.

Rick, Executive, Theravance: Yeah. I'll I'll bring it back on Trelegy, but the because Trelegy and you probably really represent two distinct segments of of the asthma and COPD market. One of them is the handheld segment, and Trelegy is the premier product in that handheld segment. And then there's the 1010% of the COPD market where patients use nebulizers. And this has not changed in, three decades because there is a set of COPD patients because of age, motor, dexterity, cognition, that simply don't operate a handheld device.

Even as simple as the TRELEGY Ellipta is, they can't operate it consistently well. And those patients are candidates for nebulization. And we even though we are five plus years on the market, we're still just scratching the surface of getting these patients on nebulization for maintenance therapy. And our responsibility is the hospital, and we we grew the hospital nearly 50% in the fourth quarter last year, unit volume. And we're we're doing that because patients can patients, physicians, respiratory therapists can count on the efficacy of YUPELRI in the institution.

And when a patient has a good experience with YUPELRI in the institution, they leave with a prescription, and many of those prescriptions are filled. So now Trelegy.

Aziz, Executive, Theravance: Yeah. Trelegy, a bit more detail on the milestones and royalties. As as I mentioned earlier, we have a hundred and 50,000,000 more milestones for achieving certain sales targets in 2025 and 2026. We hit the milestone of 50,000,000 yet, last year. We got that in Feb.

So as I mentioned earlier, we, the product generated about 3,500,000,000.0 of net sales last year. We only need to hit 3,400,000,000.0 this year to hit the first fifty million of the one fifty. So this brand has already grew 28% last year. So we think that's highly probable we achieve that one. And then the year after in 2026, we we get a hundred million dollar milestone if we hit another 3,500,000,000.0 of net sales, which we kinda just hit last year.

So, basically, if the product continues at its current rate, we're gonna hit both of those. So we think those are highly probable. And then the royalties, as as I mentioned before, five and a half percent to eight and a half percent tiered royalties come back to us ex US on Trelegy starting in mid twenty twenty nine and in The US starting in 2031. And we think the duration of those royalties will will last well into the twenty thirties. And if you just look at consensus, we're it's still talking about a multibillion dollar product, five and a half to to eight and a half percent royalties is a massive amount of incremental income.

Right? So when you think about the portfolio of the company, you have two kind of cash flowing assets, YUPELRI and Trelegy with long duration, and you have a big bet on ampreloxetine plus the our financial profile. It's a unique portfolio, especially in this time in the market.

Unidentified speaker, Interviewer: Sure. And you mentioned the hospital segment of the business. So I I would say that's probably a stickier business segment for you. You know, maybe you could elaborate a little bit more on that. And, also, how do you actually plan to follow these patients once they leave the hospital?

Rick, Executive, Theravance: Yeah, it's a great question. And particularly as patients leave the hospital, this is where the partnership with Viatris really comes into focus, because over time we're improving sort of, it's probably wrong to call it a handoff, but really the continuity of care from the hospital to the community. Our hospital, we have a relatively small sales force, you know, about 14, 14 account managers, a few national account directors, an outstanding medical group that focuses messaging on the hospital, that we can save the hospital money, save their respiratory therapy time by implementing YUPELRI as their preferred LAMA, long acting muscarinic antagonist. And we've been successful in not only getting a therapy, formulary, but also achieving therapeutic substitution. So that when a LAMA is written, any drug of this class is written in the hospital, YUPELRI is substituted.

And it's a very easily, you know, five to eight minute nebulization for the patient. You can be confident that the patient is getting the medicine, which is why respiratory therapists and pulmonologists like it. And it's been a very effective strategy in the hospital, and we're using that hospital growth to really drive the community use of YUPELRI.

Unidentified speaker, Interviewer: Do you see any, threat to YUPELRI's market presence from any other COPD therapies that has been approved or anything else that's in development?

Rick, Executive, Theravance: Well, the previous presenter talked about Ottuvre, and obviously, you know, Verona has done an outstanding job with that. And we're glad to see them in the market because it increases the noise level about nebulization. Ottuvre is added on to therapy, so it's not really competing with YUPELRI, it's being added to YUPELRI in some instances and being added to Trelegy in other instances. So but that additional noise about nebulization is very helpful for YUPELRI. YUPELRI, the chemical, rebofenacin, is a unique llama in that we could have developed an MDI or a DPI or a nebulizer.

We developed it as a nebulizer because that was the one space in the market with the greatest need, and there wasn't going to be another LAMA, long acting muscarinic antagonist developed for, you know, in a nebulizer for the market because of the physical chemistry constraints that are present in these structures. So, you know, I don't think there's going to be a competitor in the near term for YUPELRI, and I just hope the continued noise level of, nebulization, gets louder and louder because it helps us out.

Unidentified speaker, Interviewer: Sure. So we have about a minute left in our session. Is there anything else you would like to highlight to investors that we haven't discussed today?

Rick, Executive, Theravance: Aziz, anything?

Aziz, Executive, Theravance: No. I think that we just to cover the financials, we ended last year with 88,000,000 of cash. We got the milestone of 50,000,000 earlier. So pro form a, a hundred and 38,000,000. We've guided to minimal cash burn this year similar to last year where we burned 14,000,000, for the year.

Most of that will be kind of front loaded in the first half. So, and then we have no debt. So kind of supporting my earlier statements around no needs to raise capital. But I think we have a nice portfolio of of kind of cash generating assets and a huge big bet on a rare neurology disease, which could really transform the company. So we're immensely excited about the next twelve months.

Rick, Executive, Theravance: Yeah. I don't think we could be work cited. I mean, the ability to make a difference to these patients and their caregivers at MSA is just a great opportunity.

Unidentified speaker, Interviewer: Thank you so much for that, and thanks to you all for being here. We are concluding the morning session for the health care track, but don't forget to join us for the next exciting lineup of, chats and panels that we have for the afternoon session, and enjoy your lunch.

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