Theravance Biopharma, Inc. (TBPH) Q3 2022 Earnings Call Transcript

Theravance Biopharma, Inc. (TBPH)

Q3 2022 Earnings Conference Call

November 7, 2022 05:00 PM ET

Company Participants

Rick Winningham – Chairman and Chief Executive Officer

Rhonda Farnum – Senior Vice President, Chief Business Officer

Rick Graham – Senior Vice President, Research and Development

Andrew Hindman – Chief Financial Officer

Conference Call Participants

Eva Privitera – Cowen

Douglas Tsao – H.C. Wainwright

Joseph Stringer – Needham

Brian Skorney – Baird

David Risinger – SVB Securities



Ladies and gentlemen, good afternoon. I would like to welcome everyone to the Theravance Biopharma Third Quarter 2022 Conference Call. During the presentation all participants will be in a listen-only mode. A question-and-answer session will follow the Company's formal remarks. [Operator Instructions] Also today's conference call is being recorded.

And now, I would like to turn the call over to Rick Winningham, Chief Executive Officer. Please go ahead.

Rick Winningham

Good afternoon and thank you for joining the Theravance Biopharma third quarter 2022 conference call to discuss our business.

I remind you that this call will contain forward-looking statements that involve risks and uncertainties, including statements about our development pipeline, expected benefits of our products, anticipated timing of clinical trials, regulatory filings and expected financial results. Information concerning factors that could cause results to differ materially from our forward-looking statements is described further in our filings with the SEC.

I would direct your attention to Slide 4. Joining me today Rhonda Farnum, Chief Business Officer; Rick Graham, Head of Research and Development; and Andrew Hindman, Chief Financial Officer.

Now turning to Slide 5. Theravance Biopharma’s unwavering purpose is to create medicines that make a difference. The third quarter marked another major inflection point in the company's transformation. We recognized a record quarter of YUPELRI net sales and profitability and continue to build our intellectual property portfolio. Rhonda will review the details.

Three opinion leaders in the field presented ampreloxetine data demonstrating clinically meaningful and durable effectiveness in MSA patients with neurogenic orthostatic hypotension in our Phase 3 Study 0170 at the opening session of the 33rd International Symposium on Autonomic Nervous System. Rick will share where we are today on ampreloxetine and where we're headed.

We closed the sale of our royalty interest in TRELEGY ELLIPTA to Royalty Pharma for approximately $1.1 billion in upfront cash, $250 million in potential milestones and outer year royalties and Royalty Pharma invested in the ampreloxetine program. And as a result of the deal with Royalty Pharma, we were able to initiate a $250 million capital return program, which included purchasing GSK’s entire holdings at $9.75 cents a share and launching a Dutch auction tender offer for up to $95 million of the Theravance Biopharma ordinary shares, a tender offer that's currently open.

We ended the third quarter with $487 million in cash and zero debt. Andrew will review further financial details. All of these actions drive towards our goal of maximizing shareholder value.

I'll now turn the call over to Rhonda to review YUPELRI.

Rhonda Farnum

Thanks Rick. We are very pleased to share the latest performance update on YUPELRI, which is the first and only once-daily nebulized long-acting muscarinic antagonist or LAMA that provides a full 24 hours of control for patients as is indicated for the maintenance treatment of patients with COPD.

Turning to Slide 7, in Q3 net sales of YUPELRI reached another quarterly high launch to date. As a reminder, Theravance Biopharma and Viatris co-promote in the U.S. with our combined sales infrastructure targeting healthcare professionals who treat COPD patients suitable for YUPELRI. Theravance Biopharma’s commercial and medical teams cover the hospital segment and Viatris is responsible for outpatient-based community healthcare professionals. From a financial perspective, we share profits and certain expenses on YUPELRI in the U.S. with 65% going to Viatris and 35% to Theravance Biopharma. Slide 7 shows the Theravance Biopharma’s implied 35% share of net sales for YUPELRI during the third quarter of 2022 of $18.7 million.

I am also pleased to highlight that YUPELRI’s year-over-year net sales has increased by 35%. Overall, Q3 2022 demand increased 4% from Q2 of 2022 and increased by 22% year-over-year.

We are also very encouraged to see quarter-over-quarter growth in net sales given we saw a slight decline over the same time last year. We typically anticipate seasonality dips in the third quarter due to lower patient census, and fewer exacerbations, et cetera. And total prescriptions within the overall maintenance COPD market also decrease slightly in Q3 of 2022 versus Q2 of the prior year.

Looking specifically at the Theravance Hospital segment deployment efforts on the right side of Slide 7, in Q3 of 2022 dosage sold exclusively in the hospital setting, represented a year-over-year increase of 45% and an increase of 5.2% from the previous quarter, demonstrating [indiscernible] hospital volume launch to date. As we have previously stated, the respiratory pandemic impacted the launch phase for YUPELRI's growth in 2020, particularly in the hospital setting.

Since the second half of 2021 we have continued to see significant progress in YUPELRI’s hospital business growth each quarter throughout 2022. Contributing to that growth has been the team's ability to continue to achieve new key hospital system formulary placements with the total of 605 formulary placements launched to-date, which have led to now over 1200 purchasing accounts and the account number continues to increase weekly. We believe these wins and forthcoming additional system successes will yield continued growth through the remainder of 2022 and beyond, as YUPELRI will be the first LAMA of choice in many hospital systems due to the growing recognition and acceptance of YUPELRI’s once-daily value proposition and clinical benefits.

Turning to Slide 8, you can see that YUPELRI’s share of the hospital setting increased to 13.4% in Q3 of 2022 up from 11.7% in the previous quarter. YUPELRI's quarterly market share in the community setting also increased to 26.3% through August of 2022, which is our latest data point up from 25.6% in Q2. As we have noted previously, many patients with COPD experience an acute respiratory episode serious enough to require a trip to the hospital and therefore the hospital becomes a key point to assess patients and convert or switch them from their current medicine to YUPELRI.

Data shows that approximately 90% of patients who receive YUPELRI in the hospital setting are discharged with a prescription to continue their treatment in the community, allowing for continuity of YUPELRI maintenance therapy post-hospitalization.

The Theravance Biopharma and Viatris teams continue to work collaboratively and effectively to convert appropriate patients to YUPELRI during their hospital visit, provide support through discharge and enable them to be maintained on YUPELRI after their return home.

Understanding the YUPELRI opportunity in the community or outpatient setting we have also been encouraged by the growth trends seen in the retail script data where total prescriptions in Q3 have increased 21% year-over-year and new-to-brand prescriptions have increased 26.9% over Q3 of 2021, with both metrics once again reaching new quarterly highs launched to-date.

As a reminder, while these script data only include the retail channel, they do serve as a useful proxy for the total community use, which includes retail plus the DME or durable medical equipment fulfillment channel, which represents the majority of YUPELRI community sales volume.

We continue to see the impact of the pandemic on our business proceed, which we believe is leading to improved demand patterns and will continue growth acceleration throughout the remainder of the year as the team continues to execute against our strategy, which leverages a hybrid mix of in-person, virtual and digital education and promotional efforts that effectively communicate the core benefits of YUPELRI.

Turning to Slide 9, recognizing there is a sizable niche for YUPELRI within the addressable COPD patient population, which actually represent an opportunity well beyond those patients receiving YUPELRI today, we do believe there is significant upside for the brand beyond 2022. Looking to YUPELRI's longer term, commercial potential, we are pleased to share that it has been further enhanced by another recently issued U.S. patent that covers a method of use of revefenacin in treating COPD. This new patent expires in 2039 and is now listed in the Orange Book....

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