Theravance Biopharma, Inc.

Ladies and gentlemen, thank you for standing by. Your conference call shall begin momentarily. Thank you. Thank you. Thank you. Thank you.

Ladies and gentlemen, good afternoon.

I'd like to welcome everyone to the TheraVance Biopharma fourth quarter and full year 2021 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. To ask a question, press the star key followed by the digit 1 on your phone. Again, that's star 1 to ask a question. If listening via webcast, please mute audio on the webcast device before asking a question over the phone. I will repeat these instructions after management completes their prepared remarks. Also, today's conference call is being recorded. And now I'd like to turn the call over to Gail Cohen, Vice President, Corporate Communications. Please go ahead.

Good afternoon, and thank you for joining the Theravance Biopharma fourth quarter and full year 2021 conference call to discuss our business. As always, 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. Now, I would direct your attention to slide three. Joining us are Rick Winningham, Chief Executive Officer, followed by Rhonda Farnham, Senior Vice President, Commercial and Medical Affairs, Rick Graham, Senior Vice President, Research and Development, and Andrew Heinemann, Chief Financial Officer. Now I will hand the call to Rick Winningham for opening remarks.

Thanks, Gail. In turning to slide four, last September we announced the restructuring of the company to optimize our business model. We immediately initiated a significant cost reduction program and have taken actions to reduce the company's headcount by approximately 75%. an estimated 270 positions. We completed most of these reductions by the end of November, with the remainder expected to be completed by the end of this month. Since then, we've rapidly transitioned to a streamlined focus there at Vance Biopharma. We plan to leverage our expertise in developing and commercializing respiratory therapeutics, and we'll continue to explore strategic partnerships for our pipeline assets to unlock additional value. All of these actions, drive towards our goal of maximizing shareholder value. There are three pillars of value creation highlighted on slide five. For the go-forward plan that build on our proven track record of respiratory innovation, supporting several approved medicines for COPD and asthma. These pillars include, number one, Upelri, which was discovered and developed by TheraVance Biopharma. It's commercialized currently in partnership with Vietris. Upelri's demonstrated market share growth quarter after quarter despite the respiratory pandemic. Bellside analysts covering Theravance Biopharma estimate Upelri has the potential to generate U.S. peak sales of approximately $400 million annually. We announced in early January the enrollment of the first patient in the Upelri Phase 4 PIFR2 study. If this study is successful, we could potentially increase the addressable U.S. market from 1 in 10 patients to 1 in 5 patients. This increase in the total addressable market obviously isn't included in current analyst peak sales estimates. Rhonda will speak to this in the UPelry's summary of quarterly successes. Number two, our core respiratory pipeline. Our second pillar of value creation includes our most advanced candidate, Nezalcetinib, and our dry powder inhaled JAK inhibitor program. that we indicated would move into the clinic after securing a partnership. Rick Graham will walk through our development update. And the third pillar is our economic interest in Trilogy, a respiratory medicine developed by GlaxoSmithKline, also known as GSK, in collaboration with the company's predecessor, Theravance Inc., now known as Inoviva. Trilogy is the first and only once-daily single inhaler triple combination therapy approved for the treatment of COPD and asthma. and is owned, controlled, and marketed globally by GSK. Given the strength of the clinical data underlying Trilogy and its indicated uses, coupled with GSK's commercial excellence, Trilogy continues to experience exceptional revenue growth trends, even in the face of a global respiratory pandemic. At present, GSK's sell-side analysts project Trilogy could generate global peak sales of $3.6 billion annually. Andrew will review Trilogy's fourth quarter performance and full year 2021 performance, as well as review Theravance Financials. We believe the strong and growing cash flows of UPelry and Trilogy and the expected future robust revenue for both, coupled with the several sources of upside potential in our development pipeline, can generate significant value creation opportunities for our shareholders. And now I'll turn the call over to Rhonda to review UPelry. Rhonda?

Thanks, Rick. I am pleased to have the opportunity to share our latest performance update on upelry, which is the first and only once daily nebulized long-acting muscarinic antagonist that provides a full 24 hours of control for patients and is indicated for the maintenance treatment of patients with COPD. Despite the continued headwinds created because of the global pandemic, we are encouraged by the growth of upelry performance in 2021. As a reminder, TheraVance Biopharma and Vietris co-promote in the U.S. with our combined sales infrastructure targeting healthcare professionals who treat COPD patients suitable for upelry. TheraVance Biopharma's commercial and medical teams cover the hospital segment, and Vietris covers outpatient-based community healthcare professionals. From a financial perspective, we share profits on upelry in the U.S., 65% going to Vietris and 35% to Theravance Biopharma. Slide 8 shows Theravance Biopharma's implied 35% share of net sales for upelry during the fourth quarter 2021 of $15.3 million, which is the brand's strongest quarter to date. UPelry's year-over-year net sales are up 13% Q4 2021 versus Q4 2020. The implied 35% share of UPelry net sales for the full year 2021 was $56.7 million, which represents a 13% increase from 2020. Demand doses for UPelry increased 8% in the fourth quarter over third quarter 2021. and 17% year-over-year. Total product demand for the full year 2021 was up 25% versus 2020. That was the case last quarter, while institutions in some parts of the country are allowing more in-person access, in-person engagements remained below pre-pandemic levels for our teams. It is also important to note that although total prescription volumes continue to demonstrate growth across most therapeutic specialties with volumes heading toward parity with 2020, prescription volumes within the pulmonology specialty remain below pre-pandemic levels. This lag in growth is associated with the challenges the pulmonary community has experienced throughout the respiratory pandemic when treating COPD patients. which include competing time demands of COVID patients, a decrease in inpatient COPD patient visit volume, and a limited ability for HCPs to diagnose and reassess their patients without pulmonary function tests or spirometry, which cannot be performed via telemedicine. These factors contributing to a reduction in prescriber confidence and ultimately fewer prescriptions. Despite these challenges, we have been encouraged with growth in total scripts for UPelry, which were up Q4 versus the prior quarter, Q3, by 7%, and increased by 32% year over year. New-to-brand prescriptions also increased 11% in Q4 of 2021 versus Q3, and 31% year-over-year Q4 2021 versus Q4 2020. As a reminder, these script data represent the retail setting, and they serve as a proxy for overall growth but are not inclusive of the DME or Durable Medical Equipment Fulfillment Channel, which represents a majority of the volume of upelry sales. Turning to slide nine, you can see that upelry share continues to grow in both the hospital, and the community settings. Upelry's share of the long-acting nebulized COPD market increased to 23.2% through October of 2021, which is our latest data point, and up from 18.2% in October of 2020. 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 a person with COPD and convert or switch them from their current medicine to upelary. Data shows that many patients who receive upelary in the hospital are discharged with a prescription to continue treatment, allowing for continuity of upelary therapy post-discharge. The Vietris and TheraVans Biopharma teams continue to work effectively and collaboratively using multiple tools and tactics in coordination to convert appropriate patients to upelry during their hospital visit, supporting them through their discharge, and enabling them to be maintained on upelry after their return home. Looking specifically at the TheraVans field sales deployment efforts in Q4 of 2021, doses sold exclusively in the hospital setting represented an 18 and a half percent increase from the previous quarter, demonstrating the highest quarter volume launched to date. Slide 10 visually illustrates UPelry's growth trajectory in the hospital segment since launch. You can see how the unprecedented demands on pulmonologists in 2020 due to the pandemic changed the growth trajectory. Today, the UPelry hospital volume has returned to growth. And during the fourth quarter of 2021, we achieved new key hospital account formulary placements and new purchasing accounts are being added regularly. We believe these wins will yield significant growth in 2022 as UPelry will be the first slum of choice in many hospital systems. Moving to slide 11, the outlook for 2022 and beyond for UPelry is favorable. Our medical liaisons have surveyed healthcare professionals who have shared their observations on the role and use of nebulization. And even with the COVID surges we saw in the fourth quarter, nebulization was reinstated. UPelry's one daily dosing is proving critically important to alleviate systems overwhelmed by COVID-19 cases. and healthcare provider shortages. It is important to understand that according to the evidence-based gold guidelines for COPD management, a LAMA or a long-acting muscarinic antagonist is foundational to COPD maintenance care. The execution of our tactical plan will continue to leverage these guidelines in the important role a once-a-day nebulized therapy like upelry can offer in appropriate patient types. Looking beyond 2022, as we announced in early January, TheraVans Biopharma enrolled the first patient in the PIPFAR-2 study, a phase four trial evaluating the performance of upelre compared to Spiriva in patients with low peak inspiratory flow. If successful, the PIPFAR-2 study will allow us to capture more of upelre's addressable market and further strengthen its competitive advantage. Lastly, Viatris continues to develop upelri for registration in China, and if upelri is marketed in China, TheraVans Biopharma will receive double-digit royalties and milestones from sales in the China market. I will now turn the call over to Rick Graham.

Thanks, Rhonda. As highlighted on slide 12, we're focused on the highest value core respiratory opportunities. As Rhonda mentioned, the PIPR-2 study is a upel re-phase IV study in partnership with Beatrice, which is being conducted by TheraVans Biopharma. The study will compare improvements in lung function in adults with severe to very severe COPD and suboptimal inspiratory flow rates following once-daily treatment with either Revifenicin delivered via standard jet nebulizer or Teatroprium delivered via dry powder inhaler. TheraVans will be responsible for 35% of the cost of this study which is currently enrolling and with top-line results expected in the first quarter of 2023. Nezalcitinib is our nebulized lung-selective JAK inhibitor in development for the treatment of acute and chronic lung diseases and is our most advanced respiratory clinical candidate. The UK COVID-19 Therapeutics Advisory Panel, or UK CTAP, has recommended evaluation of nezalcitinib in the REMAP-CAP trial. citing the unique inhaled formulation to block lung inflammation and tissue damage directly in Malung, while reducing potential side effects caused by systemic administration. Externally funded platform studies are an efficient way for us to generate additional clinical data with Nezalcitinib in patients with COVID-19 that may be applicable to its continued development in related indications. We're finalizing details of the planned platform study with REMAP-CAP, and intend to share more information when enrollment begins. Our pipeline slide, slide 13, has been updated to reflect our respiratory focus on upauri, nezalcitinib, and our inhaled JAK inhibitor program for asthma. We have economic interest in Trilogy and a skin-selective JAK inhibitor that is licensed to Pfizer for the treatment of dermatologic diseases. Our other pipeline assets are now considered non-core, and we're on track to complete study closeout for isanfitinib and ampryloxetine trials by the end of the first quarter, and we aim to leverage partnerships to unlock value of the non-core assets. I'll now turn the call over to Andrew for the financials.

Thanks, Rick. Turning to slide 14, we look at the performance of Trilogy, the third pillar of our respiratory-focused value creation plan. As a reminder, Trilogy is owned and marketed globally by GSK. Through our 85% ownership interest in Theravance Respiratory Company LLC, or TRC LLC, we are entitled to receive upward-tiering royalties on global net sales of Trilogy. At present, 75% of income received from our economic interest is pledged to service principal and interest payments on our outstanding 2035 non-recourse notes, and the remaining 25% of income is retained by us. On slide 15, we've captured the most recent information GSK shared during their earnings call on February 9th. GSK noted that Trilogy continued to lead the market as a single inhaler triple therapy with year-over-year global sales growth of 52%, generating global net sales of 479 million during the fourth quarter of 2021 and $1.7 billion for the full year. This growth is primarily driven by the continued adoption of Trilogy in the asthma indication and strong global commercial performance by GSK's team. Moving to our consolidated financials on slide 16, here we summarize our fourth quarter and full year financial highlights for 2021 compared to 2020. R&D expenses for the fourth quarter of 2021 were $28 million compared to $58 million in the fourth quarter of 2020. And for the full year 2021, they were $168 million compared to $230 million in 2020. SG&A expenses for the fourth quarter of 2021 were $16 million compared to $22 million for the fourth quarter of 2020. And the full year of 2021, they were $71 million compared to $77 million in 2020. These quarterly and annual figures exclude share-based compensation and the one-time restructuring expenses. We ended 2021 with $173.5 million in cash and cash equivalents. Turning to slide 17 with respect to 2022 financial guidance, for R&D expenses, we expect to invest between $45 and $55 million relative to actuals of $168 million in 2021. Of this expense range, approximately $10 million is non-recurring spending that will be incurred in Q1 2022 to support the completion of isensitinib and amproloxetine programs that Rick just mentioned. R&D spending in Q2 and beyond will then normalize and reflect recurring investment in the respiratory focus portfolio. For SG&A expenses, we expect to invest between $35 to $45 million relative to actuals of $71 million in 2021. Again, these operating expense guidance figures exclude share based compensation and the one time restructuring expenses. As a result of our reduced spending and improved cash flow generation from UPELRI and Trilogy, we reiterate our expectation to become sustainably cash flow positive on a corporate basis in the second half of 2022. With that, I'll turn the call back to Rick Winningham for closing remarks.

Thanks, Andrew. 2022, on slide 18, has effectively launched the new focus there of Anspile Pharma. As we've reviewed, we've got three pillars of our value creation plan, returning UPelry's commercial performance to pre-pandemic launch mode growth trajectory, realizing the potential of our highest value R&D clinical programs led by the PIFR2 program, on upelry, and the third key pillar is our economic interest in Trilogy, which is experiencing strong revenue growth based on GSK's commercial performance. The new focus, Theravance Biopharma, is moving toward our goal to become sustainably cash flow positive beginning in the second half of 22 and to maximize shareholder value. In closing, I'd like to thank our internal team for their perseverance during this period. of time at the company. I'm grateful for their commitment to our mission of continuing to develop medicines that make a difference in the respiratory area, the progress of our clinical pipeline in Eupelri, as well as the communities we serve. And I'll now hand the call back to the operator for questions.

Thank you, sir. Once again, if you would like to ask a question, you may do so by pressing the star key followed by the digit one on your touchtone telephone. If listening via webcast, please mute audio on the webcast device before asking a question over the phone. If you're using a speakerphone for today's call, please make sure your mute function is turned off to allow your signal to reach our equipment. Again, that's star one if you'd like to ask a question. And we will pause for a moment to assemble our roster. We will have our first question from Mark Fram of Cowling. Your line is open.

Hey, thanks for taking my question, and congrats on the growth with UPelry. Maybe looking to that PIVR2 trial that's starting up now, what do you view as the clinically meaningful difference that you need to show there, and then assuming the trial is successful and you're able to show at least that benefit? how quickly would you expect that to translate into kind of an inflection in youth health resales? Is the data release the inflection point, or should we be looking more towards maybe a label update that might come nine months, a year later?

Rick, do you want to take that?

Yeah, sure. So now, Mark, we have now put some of the details of the trial on clinicaltrials.gov. And remember, it is a few hundred patients, and it's head-to-head upelri with Spiriva. So we would be looking for a statistically significant difference in the trough FEV1 at day 85. So that's what we'd be looking for. In terms of the second question, Rick, I'll hand it back to you.

Yeah, I think the publication of the results is obviously one step forward. It's worth noting that in the registrational program, you know, we had low peak inspiratory flow patients in the phase three program. And that data, you know, is within the clinical trials section, you know, mixed in with high PEPFAR patients. So low PEPFAR patients exist as part of our, you know, part of our label. I would see the data rolling out to, you know, a fairly rapid publication and then followed by, that interaction with the agency on the effects on the label. So I think without a doubt, given that we are targeting upelry versus the market leader, increases, as Rick said, and FEV1 at trough is important, as is overall response rates and response differences in patients. So I think I think we're pretty encouraged by what we saw overall with the low PIFR patients in the Phase III and then the pilot study that we did. And we think that, you know, we can make significant headway with positive data in the PIFR II study because, as I've mentioned in other, you know, forum, we're just scratching the surface with you, Valerie. The opportunity out there for the nebulized patients once-daily product with 24 hours of control is quite significant, given approximately 1 in 10 patients use a nebulizer for maintenance. Many of them are using short-acting nebulized therapy that's not indicated for maintenance. So, you know, I'm pretty excited about what we might be able to deliver with PEPFAR-2.

Okay, great. That's very helpful. And then maybe just on the cash flow positivity guidance, can you just remind us what kind of major kind of variables that are going into that? Maybe what do you assume on the Innoviva side? Are you assuming there's more investment activities from them? Are you assuming the royalty flow is cash or maybe that you're able to start monetizing some of the investments that have been made?

Mark, the main driver of cash flow positivity is the performance of UPelry and our 35% profit splits of those increasingly positive cash flows based on the U.S. performance. So it's been profitable since October 2020, and we are happy that it's continued to maintain that profitability. And it's the key driver in addition to focused cost management, both on R&D and SG&A expenses. As I mentioned in my prepared remarks, 75% of the cash flows coming out of TRC LLC are pledged against the principal interest of the notes that we have outstanding for the $400 million facility. So the remaining 25% of any cash dispersed from TRC LLC does come to our balance sheet and income saving and cash flow statement, but it's a small driver relative to UPEL risk performance and cash flow management.

Okay.

Thank you.

Thank you. Our next question comes from Anupam Rama of J.P. Morgan. Your line is open.

Hey, guys. Thanks so much for taking the question. On upolary, are there any seasonal 1Q dynamics we should be considering just when we think about sort of quarter-over-quarter growth that you would point to? Are there any second question, you know, maybe some timelines to better understanding the NISL set and development program more broadly? Thanks so much.

Rhonda, you want to touch on the seasonality of UPelri under the umbrella that, you know, as far as we're concerned, really UPelri is still in the launch mode. But go ahead, Rhonda.

Yeah, I was going to lead off from that. You know, 2019 being our launch year is our best baseline for looking at trying to establish any seasonality that could be associated with the product beyond what you would expect with COPD in general. Obviously 2020 having the disruption with COVID kind of put a stall on that ability. Looking at 2021, I think can start to mimic what we would anticipate with the seasonality with COPD. However, looking at our trajectory of return to growth, it's still hard to demonstrate that there is explicit different seasonality associated with the product.

Then Rick.

Yeah, sure. So, antepalmon, mesocytinib, you know, with regard to what we've discussed previously, our focus is on acute lung injury, chronic lung injury, and fibrotic diseases along with mesocytinib. So, at the current time, the team is really, and this is a very focused team given our restructuring, is really focused on the preclinical work. So trying to understand of the acute and the chronic indications, which makes the most sense scientifically from a priority standpoint. And so there's a lot of preclinical work that's going on. So more to come in the future, but right now our focus is on following the science for Nezalcitinib preclinically.

Thanks so much for taking our questions.

Thank you. Our next question comes from Douglas Doe of HC Wainwright. Your line is open.

Hi, good afternoon. Thanks for taking the questions. Just turning to the pipeline, you know, you talk about the JAK programs that are in-house, and additional to midelcitinib. Obviously, you know, there was the allergen study with 8236, which I know isn't a perfect proxy, and there have been drugs that have been approved that have not succeeded in that. And we had seen some very promising data earlier. Just where are you with that program, or is that really on pause, pending, finding a potential partner? And, you know, how far along are other sort of assets and potential developments, and how far along are you willing to take those without a partner or before finding a partner?

Yeah, so Nezalcetinib, which is the nebulized JAK inhibitor, which, you know, showed proof of concept in the acute lung injury due to COVID. It is lined up to go, as Rick mentioned, you know, into the REMAP-CAP program. That's where a significant amount of focus is for us in pushing NAS forward. Obviously, as Rick said, the preclinical work going on really to understand the effect, dose, and duration of desalcetinib in chronic and fibrotic patients chronic and other diseases like fibrosis is underway. And the dry powder program, I think what, you know, we've learned quite a bit from where we were with 8236 on the necessary characteristics, we think, to bring forward a stronger dry powder inhaled JAK inhibitor. And we've said before that that program will proceed into the clinic with a partner. Rick, anything to add?

No, nothing to add.

Okay, great. Thank you.

Thank you. Our next question comes from Lisa Baco of Evercore. Your line is open.

Hi there. I know you had indicated that you thought maybe the outlook for trilogy should be higher than current estimates, and you kind of indicated $4 billion versus $3 billion, which is more along the lines of consensus. Can you maybe just walk us through your assumptions there, and how do you think about the timing of that? I know a lot of it was driven by Asthma may be being underappreciated, but perhaps you could give us a little more detail just mathematically how we get there.

Andrew, you want to talk about the move over time with consensus?

Yeah, I mean, Lisa, we're not going to go through a revenue build here on this call. Happy to do it offline with you. But the comments we've made are a general observation about the fact that the street initially at the time of launch in 2017 valued peak sales in the COPD indication alone at $2 billion. And as of the quarterly print that GSK just put out for February 9th of this month, The street has moved to 3.6 billion over the passage, obviously, of the last five years with a lot of strong commercial performance and the label indication globally in most regions for the asthma indication. So it's really based on the back of the cell site analyst community that covered GSK that we're making those comments. We, of course, have our own internal estimates that range around the street sales estimates and could exceed $4 billion. But, you know, we're really making reference in our prepared remarks today to the Southside analysts covering GSK, which, of course, those models are generally public. And, you know, at the end of the day, as we remarked, GSK's team globally has been doing a great job and the data set supporting its use both in COPD and in asthma as the only once-daily triple combination therapy model. in a dry powder inhaler is really a unique offering for patients relative to the other therapies available. So we see it continuing to capture share across the board.

I think if you, Lisa, as you look at what's happening in the United States with the waning of the pandemic, you are seeing more COPD prescribing. Rhonda referenced this in her comments. This is likely to affect Trilogy and COPD as pulmonologists are seeing more patients. And then I think a true growth driver, and this is, you know, from third-party market research for Trilogy is obviously, as Andrew said, is the asthma indication. In fact, getting, you know, getting use and prescribing from primary care in the asthma patient population with Trilogy is, you know, has been the real driver you know, through the pandemic. And, you know, given the effectiveness of the drug overall in moderate to severe asthma patients, I don't think that there's, you know, at least from an efficacy and safety perspective, there doesn't seem to be, you know, any sort of cap that we should continue to see growth out of both primary care and asthma and probably pulmonology and asthma, and then obviously pulmonology and COPD. Those are the kind of three legs of the stool, at least as we see them, for trilogy in the U.S.

Okay, great. And then I guess for last year, where are we with payments, royalty payments from Innoviva for you guys? Like how much is outstanding and how much are you in receipt of on a, I guess, on a percentage basis or something?

Okay. Yeah, I think we'll provide an update when we file the 10-K here shortly. It's statutorily required at the end of this month, so there will be exhaustive footnotes that will answer those questions. We did get $60 million in cash out of TRC LLC through October of last year, as we've previously noted. Okay.

And then I think, Lisa, we'd expect the cash payments to be somewhat – characterized as lumpy coming out of the LLC. But, you know, we do continue to expect to get all the cash due to us out of the LLC over time. Yeah. Okay.

And then just final question for me. Can you talk about the trial design for Nezalcitinib and COVID and maybe timing?

Rick, you want to take that?

Yeah, we haven't disclosed the design yet. We're still working through the details with the REMAP organization. But with regard to timing, we do expect in the very near future to be able to announce enrollment. So still more to come. I can't comment very much on that today, Lisa.

Okay, great. Thanks for answering my question.

Thank you. Our next question comes from Joseph Stringer of Needham & Company. Your line is open.

Hi, everyone. Thanks for taking our questions. Question on upelry. You mentioned HCP and in-person interactions remain below pre-COVID pandemic levels. Just wondering if you could sort of quantify this a little bit more in terms of a relative percentage to pre-pandemic levels. How has that increased or progressed over the last couple of quarters? And do you expect it to reach, say, 100% of pre-pandemic levels by the end of this year. Thank you.

Rhonda, you want to take that?

Sure. Well, looking at the back half of last year, they certainly increased over the immediate kind of paring phase, thinking about Q2 of last year, and I say Q2 of 2020. We're still below the pre-pandemic levels. However, seeing the continued kind of variability across various regions continue to open up access both with in-person as well as the allowance of continued virtual engagement for promotional activities that continuing to grow over time. I would like to say by the end of the year, it could be closer. All of that is dependent upon, you know, what next phase we are of the pandemic or truly entering the endemic phase.

Yeah, I mean, so it's, you know, it's bounced around from, you know, this is just general, you know, general numbers to, you know, 30, 40% pandemic to, you know, 80, 90% given where, you know, where you are regionally in the United States. And, you know, I think on average, you know, our expectation is, as Rhonda said, as it goes into the endemic stage is, you know, the bottom to move up and obviously get back hopefully, to close to pre-pandemic levels by the end of the year. Now, fortunately, we've been able to expand the number of sort of tactical considerations that we use to get in front of customers. And I think those expanded tactics are likely to continue to represent, you know, part of the calls in addition to face-to-face interactions with healthcare professionals.

Great. Thank you for taking our question.

Thank you. Again, if you'd like to ask a question, please press star then 1 on your touch-tone telephone. Again, to ask a question, please press star then 1. Our next question comes from Vikram Freud of Morgan Stanley. Your line is open.

Great. Thanks for taking my question. The two from my side both focused on pipeline. So first on upelry, could you clarify what level of regulatory interaction that you and Vietris may have had with the FDA regarding this program, and then based on these interactions, what amount of data do you think you would need to be able to file, and what would be in the fileable package for a label update? And then second question, your pipeline page notes the skin-selective JAK inhibitor for dermatology that's partnered with Pfizer, so I just wanted to see if you could provide us with an update on where this program stands and what the next steps here could be.

Yeah, sure. On the Pfizer the Pfizer program that's listed on clintrials.gov as preparing to go into phase one. So I think you can pick it up off of there and follow the progress, you know, both with our updates as well as progress on ClinTrials. I think the, you know, we've had a level of interaction with the FDA on PIFR2 and where it would go, you know, where it would go in the label. And obviously, you know, it depends as, you know, any regulatory interaction does, it depends on the data. But I think clearly, you know, we see a path forward for, you know, inclusion of the PIFR2 data in the label, you know, depending on the strength of evidence that we demonstrate. So we wouldn't have gone forward without it, so.

Thank you. Our next question comes from Douglas O of HC Wainwright.

Your line is open.

Hi, thanks for taking the follow-ups. Just maybe, Rhonda, just in terms of you, Pellery, just curious if you could provide some color on some of the competitive dynamics. You've continued to gain some share. I think, you know, earlier in the year, mid-year, Bravana went, you know, had some generics. So just maybe where you're gaining traction and how you might see that playing out in the coming months. Thanks.

Well, certainly seeing traction related to increased awareness and the appreciation of the role UPelry can offer as a one-stay llama. So backing back to the comment that Rick made earlier, we're still in launch mode. So the ability to get the message out there and see that experience take place, that's certainly driving the utilization. There is utilization in combination with with other long-acting NEB products like Bravana and Performance, although we do not promote that. And also seeing, you know, or watching very closely how the market is playing out with the generic entries for both Bravana and Performance. We're still watching that over time to better understand those dynamics.

Yeah, I think, you know, Doug, the benefit here with upelri and Rhonda hit on it in her comments is that, you know, LAMA is really considered foundational therapy for COPD. And for patients that, for patients that, you know, that have COPD and need a nebulizer, they haven't been able to access that foundational therapy product before really at scale before upelri. And so, you know, we talk about being in launch mode. That's really true. I think we're, continuing to get out there, drive awareness of upelry, and then the genericization of the two twice-a-day LABAs, we really haven't seen kind of anything but probably a net positive effect on upelry from that.

Thank you.

Great, thank you.

Thank you. It appears you have no further questions on the phone. I'll turn the conference back over to Mr. Winningham. Please go ahead, sir.

Yeah, just thank you for your attendance and your interest in the company. We look forward to a great 2022, and we'll be updating you on our progress throughout the year. Have a great day.

Thank you. Ladies and gentlemen, this does conclude today's conference. Thank you all for participating. You may now disconnect. Have a great day.