Theravance Biopharma, Inc.

Ladies and gentlemen, good afternoon. I'd like to welcome everyone to the Theravance Biopharma second quarter 2024 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 star followed by the digit 11 on your telephone. Again, that's star 11 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 is being recorded. And now I'd like to turn the call over to Rick Winningham, Chief Executive Officer. Please go ahead, sir.

Good afternoon, and welcome to TheraVance BioPharm's second quarter 2024 earnings results conference call. Slide two is our forward-looking statement slide, which I would encourage you to read. Our call today will include forward-looking statements involving risks and uncertainties, information concerning factors that could cause results to differ materially from these forward-looking statements as described further in our filings with the SEC. As you can see on slide three, members of the TheraVans leadership team joining me on today's call include Rhonda Farnham, Theravance's Chief Business Officer, Anya Miller, Theravance's Head of Development, and Aziz Swaf, our Chief Financial Officer. Turning to slide four, we have a number of updates to cover, which either impacted our quarterly results or tie to future financial and operational guidance. Beginning on the left-hand side of the slide, we reported 54.5 million in net sales for UPelri. This reflects another strong quarter of volume growth and demand generation with hospital doses up 43% and overall customer demand up 13% versus the prior year, offset by a reduction in net realized price, resulting in net sales decreasing 1% year over year. Given the current mix and resulting ASP coupled with the nature of Medicare Part B, where reimbursement limits are set with a two-quarter lag, we are only expecting the lower net price in Q2 to improve slightly during the second half of the year. For 2025 and beyond, we anticipate a more stable pricing environment with continued upelry demand growth across all patient fulfillment channels. In line with our prior guidance, Beatrice filed an NDA for upelry in China in June. which puts us on the path to achieve meaningful economics in that territory. And finally, in July, we were granted a new upelry method of use patent with a 2039 expiration date, and this new patent has been listed in the FDA Orange Book. Moving to ampryloxetine, we're today updating when we expect to achieve key milestones in the pivotal Cypress study. Anya will provide more details in her portion of today's presentation, but we now expect to enroll the last patient into the open-label portion of the study sometime in mid-2025, where we had previously been guiding the second half of 2024. One of the main reasons for this is longer lead times between initial site engagement and activation, particularly at large U.S. Centers of Excellence, which are core to our strategy of delivering a high quality result. We have recently brought on a number of larger sites and our enrollment rate per active site are now at or above our internal projections, which give us confidence in our updated timeline. We expect to report top line results from Cypress approximately six months after we enroll the final patient in the open label portion of the study. Turning to the right-hand side of the slide, we were able to limit cash use in the quarter, finishing the period with $96 million in cash and no debt. While our second half financial performance will depend partly on UPelry's performance, we no longer expect to approach non-GAAP breakeven and instead expect to report losses in the second half of 2024 similar to what we experienced during the first half of the year. We expect cash utilization in the second half of the year to be similar to or slightly above first half levels. Finally, moving to Trilogy, GSK reported another outstanding performance this quarter, with a reported sales of up 40%. This achievement brings year-to-date sales to $1.8 billion, up 37%, and increases our confidence in achieving the higher $50 million sales milestone for 2024, as well as additional potential milestones in 2025 and 2026. With that, I'll turn it over to Rhonda to cover upelry's performance in the quarter and our strategy to deliver future growth. Rhonda?

Thanks, Rick. Let's begin the upelry overview on slide six with a snapshot of the product's net sales performance. As Rick highlighted in his opening comments, we reported total upelry net sales of 54.5 million in the quarter, which represents a 1% decline quarter on quarter and year on year. This result was driven by a lower than anticipated realized net price in the quarter reflective of the brand's evolved channel mix. As you know, our strategy with upelry has been to present patients and healthcare providers with flexibility of choice in fulfillment options that best meet their individual needs. Although we are limited in terms of the detail we can provide today, Beatrice has taken proactive steps during the quarter to reposition upelry for improved performance across a range of distribution channels over the longer term. While we do not expect to realize the full effect of these improvements on net price for a couple of quarters, given that upelry is reimbursed under Medicare Part B, where ASP is updated with a two-quarter lag, We may see modest sequential improvements in price during the remainder of the year. While the second quarter net sales performance is disappointing, we believe that the effect of one factor should not overshadow our continuous success in demand generation and our ability to position UPelry for sustained long-term growth. This quarter, our combined team was able to drive a 13% year-on-year increase in customer demand volume, and we remain confident in UPelry's bright future based on its highly differentiated profile and the strategies we are implementing to drive increased awareness and adoption. On slide seven, you can see our strong hospital performance in the quarter. We are quite pleased with not only the growth we delivered, but also with the KPIs that tie this performance to potential future growth in our ability to drive outpatient community utilization. Doses shipped during the quarter increased 43% year-on-year and again reached a new all-time high. We made continued progress in terms of new formulary approval with our year-to-date performance essentially already on par with the entirety of 2023. In addition, the team continues to focus on the implementation of therapeutic interchanges. As you know, therapeutic interchange adoption is core to our commercial strategy and is fundamental not only to increase adoption and volume growth of upelry in the hospital setting, but also contributing to establishing discharge processes that best support patients for continuing use on upelry as they return to the community care setting. Shifting to our market share trends on slide 8, I'm pleased to report that our share of the long-acting NED market once again increased during the quarter in both the hospital and community segments. with our hospital share surpassing 18% and our community share reaching 32%, both new launch-to-date highs. This performance is consistent with our expectations given the strong momentum we've generated in terms of formulary wins, therapeutic interchange in the hospital setting, coupled with the success of our concomitant therapy messaging strategy in both the hospital and community settings. We are temporarily pausing the provision of our retail script and new to product view given that the prescriptions for a large specialty pharmacy and the mail order channel of the broader retail data have been underreported for the last two quarters, subsequent to the February change healthcare cyber incident. In fact, we have simply removed, if we simply remove the underreported mail order volume from the retail view, We did see another launch-to-date high in Q2. We do have access to the individual pharmacy stream that was impacted, which confirms the strong demand trends and the volume growth we are experiencing with upelry. On slide nine, I think it's important to revisit the roadmap from 2023 and the substantial long-term growth opportunity that remains for upelry. As we've previously discussed, We estimate that there are approximately 200,000 patients receiving LABAs as maintenance therapy and that this population is central to our concomitant therapy messaging strategy. Our internal metrics demonstrate that we are improving the ratio of LABA use to UPEL reuse in the hospital setting. Since initiating this strategy, we have seen the ratio of LABA to LAMA use improve from five to one now to three to one. as of Q2 2024, with the goal of getting as close to 2 to 1 or 50% of NEB lava volume as possible. This metric, in addition to our growing long-acting NEB market share in both the hospital and community, suggests that our strategy is working to continue increasing the UPelry patient population. Beyond this, we continue to design and implement tactics that can tap into the next 200,000 patients inappropriately using short-acting nebulized bronchodilators as maintenance treatment. These are patients who are accustomed to nebulized delivery, but nevertheless choose to administer a short-acting nebulized agent four to six times daily in the absence of clinical evidence supporting their use as maintenance. As a once daily nebulized LAMA with strong bronchodilation effects over a full 24-hour dosing interval, we expect to be able to make significant inroads into this additional patient segment opportunity. As we've highlighted before, there remains a large opportunity among patients who struggle with handheld devices. Over time, and with education particularly associated with the ease and benefits of a nebulized therapy administration, We expect to be able to continue to grow upelry within this population as well. Moving to slide 10, I'll share some information relevant to the significant commercial opportunity that exists for upelry in China, which is an important market for respiratory medications and pharmaceuticals overall. According to Acuvia data, China is the second largest market globally with spending approaching one quarter that of the U.S. COPD represents a significant health problem in the territory, affecting nearly 100 million individuals, with nearly half of those experiencing moderate to severe disease. China has been modernizing its regulatory framework. From the end of 2022 through May 2024, the review time for NDAs and BLAs in China ranged from six months to over 24 months, with a median of approximately 15 months. We are fortunate to have a strong partner in Vietris in China, which ranks as the country's eighth largest multinational pharmaceutical company with strong government and regulatory affairs capabilities, as well as a field force of over 4,000 sales representatives. We are very excited for UPelry's potential introduction and note that the economics to TheraVance are substantial with up to 45 million in regulatory and sales milestones plus Upwardly tiered royalties ranging from 14% to 20% of net sales. Finally, I'll wrap my comments on slide 11. First, Upelri is a unique medicine offering a substantial and highly differentiated value proposition. It is the only nebulized LAMA for COPD maintenance treatment in the U.S., and we believe it is underutilized within the patient population to which it is best suited. We see long-term growth potential for the product. driving considerable value for Theravance shareholders. Second, in addition to our co-promotion economics in the U.S., we potentially stand to achieve milestones and royalties as outlined here, which include those I referenced in the previous slides associated with the potential new opportunity in China. With that, I will hand it over to Anya to address further details on the progress of the Amphiloxetine program. Anya?