Theravance Biopharma, Inc. Q4 FY2024 earnings call

Management Statement and Operational Highlights

• YUPELRI: Focus on growing revenue and brand profitability. Hospital performance was excellent with 49% YOY dose growth. Broadened formulary wins and therapeutic interchange protocols, increasing long-acting Neb market share.
• TRELEGY: Potential $150 million in milestones over the next 24 months, with significant royalty potential starting in 2029.
• ampreloxetine: Progress in CYPRESS study enrollment, abstracts accepted for AAN meeting, positive FDA interaction reaffirming filing expectations if CYPRESS positive. Market research supports addressing unmet needs in MSA and nOH.
• Financials: Fourth quarter collaboration revenue up 8% to ~$19 million. YUPELRI brand cash profitability was the highest to date. Operating expenses increased due to commercial/medical affairs spend on ampreloxetine and R&D for CYPRESS. Full year results fell within guidance ranges.

Segment Performance

• YUPELRI: Fourth quarter net sales increased 10% to $66.7 million, an all-time high, with hospital doses up 49% year-over-year. Full year 2024 sales were $239 million, driven by 11% full-year demand growth. There's potential for a near-term $25 million sales milestone in the U.S. and milestones/royalties in China. Hospital volume is 10% of total YUPELRI volume, but non-hospital (community setting) is growing.
• TRELEGY: In 2024, GSK reported $3.5 billion in TRELEGY sales, triggering a $50 million milestone payment. There's a high probability of achieving an additional $150 million in milestones over the next 24 months. Royalty interest starts in 2029 from ex-U.S. sales and 2031 from U.S. sales, expiring later of 15 years post-commercial launch or patent expiration.
• ampreloxetine: Enrollment is on track in the CYPRESS study, with two abstracts accepted for the American Academy of Neurology meeting. There was a positive FDA interaction reaffirming filing expectations if CYPRESS is positive. Market research supports its potential to address unmet needs in MSA and symptomatic nOH.

Guidance

• 2025 Financial: R&D expense (excluding share-based comp) expected to be $32M-$38M. SG&A expense $50M-$60M. Share-based comp $18M-$20M. Non-GAAP losses and cash burn similar to 2024 levels. TRELEGY milestones: Only recognize other income if cumulative milestones exceed $194M; remaining $150M milestones would result in $6M other income in 2026.
• TRELEGY: High probability of achieving $150 million in milestones in 2025-2026.
• ampreloxetine: On track to complete CYPRESS enrollment mid-2025, with top-line data ~6 months later.

Risks

• Regulatory: Uncertainty in regulatory approvals for ampreloxetine, including timing and NDA filing challenges.
• Market: Seasonality impacts YUPELRI Q1 performance.
• Accounting: Changes in accounting guidelines affecting recognition of TRELEGY milestones, impacting reported income.

Question and Answer

• Q: Douglas Tsao on hospital channel success, therapeutic interchange, channel mix trajectory A: Rhonda Farnum discussed execution in targeting national accounts, clinical support for formulary submissions, and pricing/channel mix strategy driving improvement.
• Q: Julian Harrison on YUPELRI China timeline, FDA feedback on ampreloxetine A: Rhonda Farnum mentioned waiting for regulatory commentary from Viatris, with ~2-year timeline from submission to approval. Rick Winningham and Aine Miller discussed Type C FDA interaction to clarify NDA filing content.
• Q: David Risinger on YUPELRI non-hospital sales, hospital vs non-hospital volume A: Rhonda Farnum clarified hospital volume is 10% of total YUPELRI volume, with non-hospital growing in line with 11% full-year demand increase.
• Q: Alex on ampreloxetine CYPRESS success bar, commercial organization scale A: Rick Winningham stated a one-point change in OHSA composite score is clinically meaningful. Rhonda Farnum discussed efficient sales team assembly leveraging script data and omni-channel reach.