Theravance Biopharma(TBPH) - 2022 Q4 - Annual Report

Financial Performance - YUPELRI net sales increased by 25% in 2022, reaching $70.7 million compared to $56.7 million in 2021[15] - Theravance Biopharma recognized $872.1 million in net income for the year ended December 31, 2022, primarily due to a one-time TRELEGY Royalty Transaction, but incurred $92.8 million in net losses from continuing operations during the same period[120] - The cumulative net loss since the spin-off from Innoviva, Inc. was $853.9 million as of December 31, 2022[123] - The company reported net losses of $199.4 million and $278.0 million for the years ended December 31, 2021, and 2020, respectively[123] Debt and Capital Management - All outstanding debt was retired, including $420 million in TRELEGY notes and $230 million in convertible senior notes, followed by a $250 million capital return program[17] - The capital return program was increased to $325 million, with $155.3 million repurchased as of February 27, 2023[22] - The company has cash, cash equivalents, and short-term marketable securities of $327.5 million as of December 31, 2022, which is expected to meet operating needs for at least the next twelve months[192] - Future capital needs may require the company to seek additional funding through public or private equity, debt financings, or collaborations, which could dilute current shareholders' ownership[193] Clinical Development and Regulatory Affairs - The REDWOOD Phase 3 clinical study for ampreloxetine did not meet its primary endpoint, but benefits were observed in MSA patients[34] - The additional Phase 3 study for ampreloxetine is expected to begin enrolling in the first quarter of 2023[36] - Regulatory approval is critical for product candidates, and any delays or adverse results in clinical studies could materially harm the business[134] - The company must obtain separate regulatory approvals in each country for marketing its medicines, which can vary significantly and may lead to delays[136] Intellectual Property and Competition - The company owns a total of 235 issued US patents and 1,491 granted foreign patents as of December 31, 2022[82] - The last to expire patent for YUPELRI (revefenacin) inhalation solution is set to expire on October 23, 2039[82] - The company’s patent rights for ampreloxetine include an issued US composition of matter patent expiring in 2030 and a method of treatment patent expiring in 2037[84] - The company has multiple patents for YUPELRI, with expiration dates ranging from 2025 to 2039, but faces potential challenges from generic competition[158] Workforce and Corporate Culture - A 17% workforce reduction is planned to prioritize resources for the ampreloxetine Phase 3 study and YUPELRI Phase 4 study[22] - The company has 111 employees as of December 31, 2022, with 93% based in the US[98] - The employee PULSE survey achieved participation rates between 85% to 100%, with an average score of 4.1 out of 5 in 2022[101] - The company emphasizes a culture of diversity, equity, and inclusion, aiming to eliminate discrimination in all forms[104] Strategic Partnerships and Collaborations - The company retains a 35% share of YUPELRI profits under a co-promotion agreement with Viatris[15] - The collaboration agreement with Viatris for the development of nebulized revefenacin, including YUPELRI, was established in January 2015[137] - A License Agreement with Pfizer was entered into in December 2019, granting Pfizer exclusive global rights for skin-targeted pan-JAK inhibitors[137] - The company may need additional collaborations to fund the development of certain programs that have not been licensed, which could adversely affect its business if unsuccessful[163] Market and Operational Risks - The ongoing impact of the COVID-19 pandemic continues to affect business operations and market demand for YUPELRI[21] - The company faces significant risks related to the acceptance of YUPELRI by physicians and patients, which could affect future revenue growth[126] - The commercial success of YUPELRI is challenged by competition from other nebulized therapies and the impact of the COVID-19 pandemic on sales[126] - The company may incur substantial expenses as it advances product candidates into later-stage clinical studies without a partner[123] Compliance and Regulatory Challenges - The company is subject to various laws and regulations regarding laboratory practices and the use of hazardous substances, which could materially affect its business[71] - The FDA ensures the quality of approved medicines through regular inspections and compliance checks with current Good Manufacturing Practice (cGMP) regulations[70] - The company may face enforcement actions from the FDA for non-compliance with applicable regulations, which could include fines and withdrawal of FDA approval[69] - The company is responsible for compliance with Medicaid Drug Rebate and other pricing programs, which could lead to penalties if not adhered to[74] Cybersecurity and Operational Resilience - The company is exposed to risks from cybersecurity threats, which could disrupt operations and result in financial and reputational harm[178] - The company may experience supply chain disruptions and operational impacts due to health emergencies, including the COVID-19 pandemic[183] - The company has implemented mitigation plans to ensure continued access to drug supply for clinical trials, but challenges remain due to potential site closures and staffing shortages[182] Tax and Financial Reporting - The company has migrated its tax residency from the Cayman Islands to Ireland, which subjects it to evolving tax laws that may impact its tax position[204] - The company is subject to reporting obligations under the Exchange Act, including annual management assessments of internal control effectiveness[211] - Any failure to maintain effective internal controls could adversely affect the company's business, financial position, and results of operations[211] - Changes in tax laws and regulations in various jurisdictions could adversely affect the company's results of operations and financial condition[203]