Theravance Biopharma, Inc.

Ladies and gentlemen, good afternoon. I'd like to welcome everyone to the TheraVance Biopharma third quarter 2023 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 one, digit one on your phone. Again, that's star one one 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 would like to turn the call over to Rick Winningham, Chief Executive Officer. Please go ahead, sir.

Good afternoon, everyone, and thank you for joining the TheraVents Biopharma Third Quarter 2023 Earnings Results Conference Call. Turning to slide two, I'd 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. On slide three, I'm again joined today by Rick Graham, our head of research and development, Rhonda Farnham, Theravance's chief business officer, and Aziz Tawaf, our chief financial officer. Moving to slide four, throughout the year, we've communicated progress on several strategic objectives for the company, namely to grow upelry while completing and disclosing the results of the PIFR 2 study, initiating and advancing our phase three Cypress study, and achieving non-GAAP profitability during the second half of the year, subject to UPelry's continued growth. Based on our third quarter performance, we continue to make good progress against these objectives. Beginning with UPelry, our combined team achieved $58.3 million in total third quarter net sales, representing growth of 9% year-on-year and the highest quarterly net sales results since launch. Highlights include another outstanding performance by our hospital-based commercial organization, continued growth in the retail channel, and further market share gains. We completed our PIFR 2 study enrollment in the third quarter and continue to expect to share top-line data in January. In a new and exciting development, we've just learned that Beatrice's Phase 3 study of upelry in Chinese patients with moderate to very severe COPD was positive, and that that data were consistent with the previous findings of upelry's strong efficacy. Our partners at Vietris plan to move forward with a registration filing in China in mid-2024. As a reminder, COPD is a leading cause of morbidity and mortality in China, with over 100 million individuals affected. and Theravance stands to receive development and sales milestones, as well as low double-digit royalties on sales in China and adjacent territories under our expanded 2019 agreement with Beatrice. Moving to Amproloxatine in Cyprus. We continue to open sites globally during the quarter, and we presented two abstracts at the International Congress on Parkinson's Disease and Movement Disorders in August, and we will present additional data later this month at the American Autonomic Society in Puerto Rico. Next on the financials, we reported a non-GAAP loss of $700,000 approximately during the quarter, coming close to our objective of achieving non-GAAP profitability. This was driven by a combination of upelary growth and effective expense management. We returned another $31 million through our capital returns program bringing us to a total of $295 million since inception and putting us in a position to return the final $30 million in the fourth quarter. On slide five, I'd like to take a moment to level set how we see TheraVance today. TheraVance has become a streamlined organization focused on maximizing the value of two key assets. UPelri, a growing source of cash flows with a bright future, and Amproloxatine, a rare neurological asset roughly a year and a half from top-line data. Theravance is currently debt-free with no need to access the capital markets to realize the full potential of these assets. In short, we believe we embody a unique profile in biotech at a time when the capital markets have been challenging. As we complete the Substantial Return of Capital program, pay down of debt, Board enhancements and expense streamlining that the company undertook following the sale of our trilogy of royalty interests, management and the board continue to comprehensively review all elements of the business, the strategy, and opportunities to maximize shareholder value. Now, turning to slide six, Rick Graham and I will cover Amperlochstein's potential in MSA, beginning with the addressable patient population. We've discussed in the past MSA is a rare neurological disorder affecting 50,000 people in the United States, of which approximately 35 to 45,000 suffer from symptomatic NOH. While this represents a substantial opportunity on its own, we're also exploring ways in which we can make Amproloxetine available globally, since our hope is to improve the lives of as many MSA patients suffering from NOH as possible. given the profound impact this condition can have on the quality of life of patients and their caregivers, and there are limited treatment options currently available. If you turn to slide seven, you can see that the number of MSA patients estimated to have symptoms of NOH increases by roughly a factor of five, if one includes Europe, Japan, and China. Given the need that remains for patients worldwide, we are committed to exploring ways to reach patients outside the U.S. as well. On slide eight, I'd note that Theravance retains global rights to ampryloxetine, granted IP extending to 2037 in the U.S. In addition, we received orphan drug designation earlier this year. As many of you know, orphan drug designation confers seven years of market exclusivity to a product. as well as exemption from user fees. However, it's also particularly important when it comes to pricing. The Inflation Reduction Act mandates that Medicare negotiate price reductions for certain drugs with high spending after nine years of commercial availability for small molecules. Drugs with a single orphan designation, such as Amproloxatine, are excluded from this requirement, which protects their value and supports the investments made in their development. Before I turn the call over to Rick Graham, I'd like to address the transition in R&D leadership we announced today. Rick will be leaving the company with Anya Miller taking over as head of development. Although he'll be staying for several months to ensure a successful transition as we approach the completion of the PEPFAR II study and with the CYPRS study well underway, Now is an ideal time to begin this transition. Over his tenure at TheraVance, Rick built an exceptional development organization, established many of its key clinical capabilities. TheraVance relies on for its success, and we're thrilled to have Anya guide the organization through Cypress's conclusion, Amproloxstein's potential filing, and approval and beyond. With her proven track record of strategic and regulatory leadership, Anya's been ready to take on this role for some time, and she will be an exceptional head of development. With that, I'll turn the call over to Rick to make some additional comments on Amproloxatine. Rick?

Thanks, Rick. Let me begin on slide 9 by providing some additional detail on the unmet need in MSA for patients with NOH, as well as why we believe we can quickly and successfully move Amproloxatine toward NDA filing and approval. First, it's important to recognize that NOH symptoms are persistent upon sitting or standing, and without effective treatment, lead to deconditioning that can have lasting effects. Moreover, the combined effects of symptomatic NOH and MSA disease progression have a significant impact on quality of life over time. As we highlight here, studies evaluating the effects of NOH symptoms on patients' quality of life consistently highlight a substantial negative impact despite the availability and use of therapeutic intervention. Currently approved therapies to treat orthostatic hypertension carry safety warnings for supine hypertension, which is an important side effect impacting use, especially amongst the many MSA patients that have pre-existing supine hypertension resulting from their disease. Amproloxetine works differently than available therapies using a patient's own norepinephrine, which we believe is why there was no impact on supine blood pressure in the phase 3 study 170, and no signal for supine hypertension in over 800 patients and healthy volunteers studied to date. In the 170 study, ampryloxetine demonstrated a durable and clinically relevant treatment effect compared to placebo in MSA patients, as well as a broad and consistent effect on the six cardinal symptoms of NOH evaluated by the OHSA composite score. If this efficacy and safety profile is replicated in the ongoing Phase III Cypress study, we believe Amproloxetine will bring compelling value to patients and caregivers. So let's talk more about Cypress on slide 10. In the past, we've described Amproloxetine's mechanism of action and why it's particularly well-suited to address the symptoms of NOH in MSA patients. Amproloxetine works on intact peripheral nerves in MSA patients to raise endogenous norepinephrine levels. with an approximate one-and-a-half-fold increase after four weeks of administration, as shown in our prior clinical trials. What's of particular importance is the impact that amproloxetine treatment showed on standing systolic blood pressure in study 170. Patients with neurogenic OH experience persistent decreases in blood pressure upon sitting or standing, which often leads to debilitating symptoms, which impact their sense of independence and their quality of life. As a norepinephrine reuptake inhibitor, ampryloxetine restores vascular tone and has increased blood pressure by increasing the endogenous norepinephrine, thereby impacting symptoms with a reduced potential to impact blood pressure during the resting state. After 22 weeks of treatment in study 170, ampryloxetine was able to prevent blood pressure decrease in patients remaining on therapy where those entering the randomized withdrawal period on placebo saw a marked decrease in blood pressure after three minutes of standing. Finally, in the same study, patients receiving amproloxetine experienced an improvement of 1.6 points relative to placebo on the OHSA symptom composite score, which was nominally statistically significant as well as clinically significant. Taken together, we believe Cypress' potential for technical success lands at the upper end of the range of studies conducted in rare and neurological diseases in recent years. Moving to the bottom of the slide, I'll briefly recap Amproloxatine's regulatory outlook. As a reminder, the Phase III Study 170 included patients with MSA, Parkinson's disease, and pure autonomic failure. Upon completion of Study 170, the company held a Type C meeting with the FDA to discuss the pre-specified analysis of MSA patients. The FDA agreed with both our interpretation of the 170 study results and the proposal to use OHSA composite score as a primary endpoint for Cypress. In addition, given the results of 170 and the seriousness of NOH and MSA, the FDA agreed that we could meet the substantial evidence standard required for full approval with one additional successful well-controlled trial. This is Cypress. Finally, we believe it's important to understand that we have already completed the substantial body of work necessary to file an NDA for AmpliLock's team should Cypress be successful. Thus, we believe that the time from top line disclosure to filing and potential approval could be expedited. Before I turn it over to Rhonda, I'd like to say a few words about my upcoming departure from the company. I'm committed to ensuring a seamless transition to the new head of development, Anya Miller, and I'm genuinely thrilled for Anya and fully support her appointment. I'll continue with the company through early 2024 with several deliverables, including the readout of the PIFR 2 top line results and capitalizing on the current momentum we have with Cypress, while then transitioning the accountability to Anya. Thank you to Rick Winningham for his trust and mentorship, to the colleagues and friends I've worked with over the past eight years, and to our external stakeholders for your support and confidence in the company. I'm optimistic about the path ahead and the future success of TheraVance Biopharma. So now I'll turn the call over to Rhonda to discuss Upelri.