Theravance Biopharma, Inc.

I'd 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. To ask a question, please press the star key followed by the digit 1-1 on your telephone. Again, that's star 1-1 to ask a question. If listening via webcast, please mute audio on your 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 Rick Winningham, Chief Executive Officer. Please go ahead.

Good afternoon, and thank you for joining the TheraVents 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. would direct your attention to slide four. Joining me today are Rhonda Farnham, Chief Business Officer, Rick Graham, Head of Research and Development, and Andrew Heinemann, the Chief Financial Officer. Now turning to slide five. 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 upelry net sales and profitability and continue to build our intellectual property portfolio. Rhonda will review the details. Three opinion leaders in the field presented Amprolox team data demonstrating clinically meaningful and durable effectiveness in MSA patients with neurogenic orthostatic hypotension in our phase three study 170 at the opening session of the 33rd International Symposium on the autonomic nervous system. Rick will share where we are today on ampryloxetine and where we're headed. We closed the sale of our royalty interest in Trilogy Elliptid, a 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 ampryloxetine 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 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 UPelry.

Thanks, Rick. We are very pleased to share the latest performance update on UPelry, 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 it is indicated for the maintenance treatment of patients. with COPD. Turning to slide 7, in Q3, net sales of upelre reached another quarterly high launched to date. As a reminder, TheraVans Biopharma and Vietris co-promote in the U.S. with our combined sales infrastructure, targeting healthcare professionals who treat COPD patients suitable for upelre. TheraVans Biopharma's commercial and medical teams cover the hospital segment, and Vietris is responsible for outpatient based community healthcare professionals. From a financial perspective, we share profits and certain expenses on upelry in the U.S. with 65% going to Beatrice and 35% to TheraVance Biopharma. Slide seven shows TheraVance Biopharma's implied 35% share of net sales for upelry during the third quarter of 2022 of 18.7 million. I am also pleased to highlight that UPelry's year-over-year net sales have 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 decreased slightly in Q3 of 2022 versus Q2 of the prior year. Looking specifically at the TheraVans hospital segment deployment efforts on the right side of slide seven, in Q3 of 2022, Doses 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 the highest hospital volume launched to date. As we have previously stated, the respiratory pandemic impacted the launch phase for UPelry's growth in 2020, particularly in the hospital setting. Since the second half of 2021, we have continued to see significant progress in UCellary'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 a total of 605 formulary placements launched to date, which have led to now over 1,200 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 upelary will be the first llama of choice in many hospital systems due to the growing recognition and acceptance of upelary's once daily value proposition and clinical benefits. Turning to slide eight. you can see that UPelry's share of the hospital setting increased to 13.4% in Q3 of 2022, up from 11.7% in the previous quarter. UPelry'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 upelry. Data shows that approximately 90% of patients who receive upelry in the hospital setting are discharged with a prescription to continue their treatment in the community allowing for continuity of upelry maintenance therapy post-hospitalization. The TheraVance Biopharma and Viatris teams continue to work collaboratively and effectively to convert appropriate patients to upelry during their hospital visit, provide support through discharge, and enable them to be maintained on upelry after their return home. Understanding the upillary 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 UPOL REIT community sales volume. We continue to see the impact of the pandemic on our business for SEED, 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 UPelRI. Turning to slide nine, recognizing there is a sizable niche for UPelRI within the addressable COPD patient population, which actually represent an opportunity well beyond those patients receiving upelri today. We do believe there is significant upside for the brand beyond 2022. Looking to upelri'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 revifinicin in treating COPD. This new patent expires in 2039 and is now listed in the orange book. Lastly, turning to slide 10, the phase 4 PIFR2 study comparing improvements in lung function in adults with severe to very severe COPD and suboptimal inspiratory flow rates following once-daily treatment with either revifinicin delivered via a standard jet nebulizer or teatropium delivered via a dry powder inhaler continues to actively enroll patients. Their advance is responsible for 35% of the cost of this study and are guiding to top-line results the second half of 2023. I'll now turn the call over to Rick Graham.