Theravance Biopharma(TBPH) - 2025 Q1 - Quarterly Report

PART I. FINANCIAL INFORMATION Financial Statements (unaudited) Unaudited Q1 2025 financial statements detail a net loss and a significant increase in cash from a milestone payment Key Financial Highlights (Q1 2025 vs Q1 2024) | Metric | Q1 2025 ($ thousands) | Q1 2024 ($ thousands) | | :--- | :--- | :--- | | Total Revenues | 15,388 | 14,503 | | Loss from Operations | (14,434) | (11,207) | | Net Loss | (13,579) | (11,664) | | Net Loss per Share | (0.27) | (0.24) | | Cash from Operating Activities | 43,039 | (1,022) | - Total assets decreased slightly to $343.6 million as of March 31, 2025, from $354.2 million at year-end 2024, while cash and cash equivalents significantly increased to $110.6 million from $37.8 million, primarily due to a $50.0 million milestone payment from Royalty Pharma[8][40] - The company confirms it has sufficient cash, cash equivalents, and marketable securities to fund its operations for at least the next twelve months from the filing date[18] Condensed Consolidated Balance Sheets The March 31, 2025 balance sheet highlights total assets of $343.6 million and a notable increase in cash and cash equivalents Balance Sheet Summary (in thousands) | Account | March 31, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Cash and cash equivalents | $110,614 | $37,797 | | Total current assets | $150,264 | $161,067 | | Total assets | $343,582 | $354,161 | | Total current liabilities | $31,502 | $32,085 | | Total shareholders' equity | $165,983 | $175,545 | Condensed Consolidated Statements of Operations and Comprehensive Loss Q1 2025 statements of operations report total revenues of $15.4 million and a net loss of $13.6 million Q1 2025 vs Q1 2024 Statement of Operations (in thousands) | Metric | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Total Revenues | $15,388 | $14,503 | | Research and development | $11,452 | $8,968 | | Selling, general and administrative | $18,370 | $16,742 | | Loss from operations | $(14,434) | $(11,207) | | Net loss | $(13,579) | $(11,664) | Condensed Consolidated Statements of Cash Flows Q1 2025 cash flow statements show net cash provided by operating activities of $43.0 million, significantly boosted by a $50.0 million milestone payment Cash Flow Summary (in thousands) | Activity | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Net cash provided by (used in) operating activities | $43,039 | $(1,022) | | Net cash provided by investing activities | $30,632 | $17,028 | | Net cash used in financing activities | $(854) | $(1,716) | | Net increase in cash, cash equivalents, and restricted cash | $72,817 | $14,290 | - The positive operating cash flow was mainly due to the collection of a $50.0 million receivable related to milestones and royalty assets[13] Notes to Condensed Consolidated Financial Statements Notes to financial statements detail accounting policies, Viatris collaboration revenue, a $50.0 million milestone, and YUPELRI patent litigation - Revenue of $15.4 million is derived from the Viatris collaboration agreement for YUPELRI, under which the company receives 35% of the profit/loss from US commercialization[29][34][35] - In February 2025, the company received a $50.0 million milestone payment from Royalty Pharma related to 2024 TRELEGY global net sales, with a remaining future contingent milestone and royalty asset of $144.2 million[51][52] - The company is in patent infringement litigation against several generic companies regarding YUPELRI, with settlements granting five companies a license to launch a generic version on April 23, 2039, while litigation against three others remains pending[73][75] Management's Discussion and Analysis of Financial Condition and Results of Operations Management discusses Q1 2025 financial condition and results, noting YUPELRI sales growth, increased R&D and SG&A expenses, and sufficient liquidity - The company's focus is on its commercial product YUPELRI® for COPD and its late-stage investigational drug, ampreloxetine, for symptomatic neurogenic orthostatic hypotension (nOH) in patients with Multiple System Atrophy (MSA)[80] - A $50.0 million milestone payment related to TRELEGY sales was received from Royalty Pharma in February 2025, with an additional $150.0 million in potential milestone payments remaining[99][100] Key Expense Changes (Q1 2025 vs Q1 2024) | Expense Category | Q1 2025 ($ thousands) | Q1 2024 ($ thousands) | % Change | Primary Driver | | :--- | :--- | :--- | :--- | :--- | | Research & Development | $11,452 | $8,968 | 28% | Ampreloxetine Phase 3 study costs | | Selling, General & Administrative | $18,370 | $16,742 | 10% | Ampreloxetine pre-launch activities | - As of March 31, 2025, the company had approximately $130.9 million in cash, cash equivalents, and marketable securities, with no long-term debt, and expects this to be sufficient to fund operations for at least the next twelve months[123][125] Management Overview This overview details the company's core programs, YUPELRI and ampreloxetine, including collaboration terms and economic interests in TRELEGY - YUPELRI (revefenacin) is co-promoted with Viatris in the US under a 35% (Theravance) / 65% (Viatris) profit and loss sharing arrangement[84] - Ampreloxetine is in a Phase 3 study (CYPRESS) for MSA patients with symptomatic nOH, with top-line data anticipated approximately six months after final patient enrollment by late summer 2025[96] - The company retains a mid- and long-term economic interest in TRELEGY, including up to $150.0 million in remaining potential milestone payments from Royalty Pharma and 85% of royalties in outer years (post-2029/2031)[98][100][104] Results of Operations This section details Q1 2025 financial performance, noting a 6% revenue increase, a 28% rise in R&D expenses, and a 10% increase in SG&A expenses YUPELRI Net Sales (in thousands) | Metric | Q1 2025 | Q1 2024 | % Change | | :--- | :--- | :--- | :--- | | YUPELRI net sales (100% recorded by Viatris) | $58,344 | $55,226 | 6% | | YUPELRI net sales (Theravance Biopharma implied 35%) | $20,420 | $19,329 | 6% | - The increase in YUPELRI sales was driven by a 5% rise in customer demand and a 48% increase in doses through the hospital channel compared to the prior year[112] - R&D expenses increased by $2.5 million (28%) YoY, mainly due to a $2.2 million increase in external costs for the ampreloxetine CYPRESS study and related NDA activities[115] - SG&A expenses increased by $1.6 million (10%) YoY, primarily due to a $1.2 million increase in pre-launch medical/commercial expenses for ampreloxetine and a $0.3 million increase in G&A costs for the ongoing strategic review[117][118] Liquidity and Capital Resources As of March 31, 2025, the company held $130.9 million in cash and marketable securities, with sufficient liquidity for the next twelve months - The company had $130.9 million in cash, cash equivalents, and marketable securities as of March 31, 2025, and no long-term debt[123] - Management believes existing cash resources are sufficient to fund operations for at least the next twelve months[125] Cash Flow Summary (in thousands) | Activity | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Net cash provided by (used in) operating activities | $43,039 | $(1,022) | | Net cash provided by investing activities | $30,632 | $17,028 | | Net cash used in financing activities | $(854) | $(1,716) | Quantitative and Qualitative Disclosures About Market Risk As a "smaller reporting company," the company is not required to provide quantitative and qualitative disclosures about market risk - As a "smaller reporting company," the company is not required to provide quantitative and qualitative disclosures about market risk[134] Controls and Procedures Management concluded that disclosure controls and procedures were effective as of March 31, 2025, with no material changes to internal controls - The CEO and CFO concluded that the company's disclosure controls and procedures were effective as of March 31, 2025[135] - No changes in internal control over financial reporting occurred during Q1 2025 that materially affected, or are reasonably likely to materially affect, internal controls[138] PART II. OTHER INFORMATION Legal Proceedings This section details ongoing patent infringement litigation concerning YUPELRI, including FDA stays and settlements with some generic companies for a 2039 launch - The company is engaged in patent infringement lawsuits against multiple generic companies that filed ANDAs for a generic version of YUPELRI[139] - The lawsuits have triggered an FDA stay, preventing approval of the generic ANDAs through May 2026, pending court decisions[139] - Settlements have been reached with five generic companies (Accord, Lupin, Orbicular, Qilu, and Teva), allowing for a licensed generic launch on April 23, 2039, while litigation against three other generic companies remains pending[141] Risk Factors This section outlines principal risks, including net losses, reliance on YUPELRI, ampreloxetine development uncertainties, generic competition, and strategic review outcomes - The company has a history of net losses, including $13.6 million in Q1 2025, and may never achieve or sustain profitability from operations[147] - The company's business is highly dependent on the continued commercial success of YUPELRI, which faces competition and pricing pressures, and on its collaboration with Viatris[153][162] - There are significant risks associated with the development of ampreloxetine, including the potential for the Phase 3 CYPRESS study to be delayed, fail to meet its endpoints, or not receive regulatory approval[155][158] - The company faces patent litigation from generic companies seeking to market a version of YUPELRI, which could result in earlier-than-expected generic competition[187][241] - The ongoing strategic review process, announced in November 2024, may be distracting, costly, and may not result in a transaction, which could adversely affect the business and shareholder value[169][170][171] Exhibits This section lists exhibits filed with the 10-Q report, including CEO and CFO certifications and financial statements in iXBRL format - The exhibits include certifications from the Chief Executive Officer and Chief Financial Officer as required by SEC rules (Exhibits 31.1, 31.2, and 32)[316] - The financial statements and notes are provided in iXBRL format (Exhibit 101), and the cover page interactive data file is also included (Exhibit 104)[316]