Full Press Release Details
Theravance Biopharma, Inc. Reports Second Quarter
2022 Financial Results
and Provides Business Update
IRELAND - AUGUST 4, 2022 - Theravance Biopharma, Inc. ("Theravance Biopharma" or the "Company")
(NASDAQ: TBPH) today reported financial results for the second quarter of 2022.
has continued to execute on its strategy and, since the first quarter, we have accomplished several transformative goals.
YUPELRI delivered its strongest quarter of sales to date. Our ampreloxetine discussions with FDA create a path to an NDA filing in MSA
patients with symptomatic nOH. The closing of the sale of our TRELEGY ELLIPTA royalty interests to Royalty Pharma for over $1.5 billion
in potential total value enables an elimination of our debt and sets up a planned return of capital to shareholders," said
Rick E Winningham, Chief Executive Officer. "With an attractive pro forma financial profile and near-term value drivers, we
believe we are well positioned to deliver medicines that make a difference and ongoing shareholder value."
Quarterly Highlights
While Viatris, Inc. ("Viatris") records the total YUPELRI net sales, the Company is entitled to a 35% share of the profits
and losses pursuant to a co-promotion agreement with Viatris.
Sale of TRELEGY ELLIPTA Royalty Interest
July 20, 2022, Theravance Biopharma closed the sale of its units in Theravance Respiratory Company, LLC representing its 85% economic
interest in the sales-based royalty rights on worldwide net sales of GSK's TRELEGY ELLIPTA ("TRELEGY") to Royalty Pharma (NASDAQ:
RPRX) for over $1.5 billion in potential total value (the "TRELEGY Royalty Transaction"). The Trelegy Royalty Transaction is
intended to provide near-, mid- and long-term value to the Company with an upfront cash payment of approximately $1.1 billion, up to
$250 million in additional milestone payments contingent on the achievement of certain TRELEGY net sales thresholds between 2023 and
2026 and outer year royalties to the Company providing an opportunity to receive an estimated NPV of $200 million. (View the closing
8-K here. For deal specifics, view the press release here and accompanying presentation and appendix here).
Global Net Sales and Milestones
posted second quarter 2022 global net sales of $591 million (up from $405 million, or 46%, from
second quarter of 2021). Theravance Biopharma is entitled to a milestone payment from RPI of $50 million if TRELEGY global net sales are
equal to or exceed $2.863 billion2
Second Quarter Financial Results
The first milestone payment, of $50.0 million, will be triggered if Royalty Pharma receives $240.0 million or more in royalty payments
from GSK with respect to 2023 TRELEGY global net sales, which we would expect to occur in the event TRELEGY global net sales reach approximately
$2.863 billion. Royalties payable from GSK to Royalty Pharma are upward-tiering from 6.5% to 10%.
2022 Financial Guidance
Conference Call and Live Webcast Today at 5:00
Biopharma will hold a conference call and live webcast accompanied by slides today at 5:00 pm ET / 2:00 pm PT / 10:00 pm IST.
To participate in the live call by telephone, please dial (800) 225-9448 from the US, or (203) 518-9708 for international callers, using
the confirmation code TBPHQ222. Those interested in listening to the conference call live via the internet may do so by visiting Theravance
Biopharma's website at www.theravance.com, under the Investors section, Presentations and Events.
A replay of the conference call will be available
on Theravance Biopharma's website for 30 days through September 3, 2022. An audio replay will also be available through 11:59 pm
ET on August 11, 2022, by dialing (888) 219-1261 from the US, or (402) 220-4941 for international callers.
About Theravance Biopharma
Theravance Biopharma, Inc.'s overarching
purpose and goal as a biopharmaceutical company is focused on delivering Medicines that Make a Difference in people's
lives. In pursuit of its purpose, Theravance Biopharma leverages decades of expertise, which has led to the development of FDA-approved
YUPELRI (revefenacin) inhalation solution indicated for the maintenance treatment of patients with chronic obstructive
pulmonary disease (COPD). Its pipeline of internally discovered programs is targeted to address significant unmet patient needs.
For more information, please visit www.theravance.com.
THERAVANCE BIOPHARMA , THERAVANCE ,
and the Cross/Star logo are registered trademarks of the Theravance Biopharma group of companies (in the U.S. and
certain other countries). YUPELRI is a registered trademark of Mylan Specialty L.P., a Viatris Company.
TRELEGY and ELLIPTA are trademarks of the GSK group of companies. Trademarks, trade names or service marks of other companies appearing
on this press release are the property of their respective owners.
Forward-Looking Statements
press release contains and the conference call will contain certain "forward-looking" statements as that term is defined in
the Private Securities Litigation Reform Act of 1995 regarding, among other things, statements relating to goals, plans, objectives, expectations
and future events. Theravance Biopharma intends such forward-looking statements to be covered by the safe harbor provisions for forward-looking
statements contained in Section 21E of the Securities Exchange Act of 1934, as amended, and the Private Securities Litigation Reform Act
of 1995. Examples of such statements include statements relating to: contingent payments due to the Company from the sale of the
Company's TRELEGY ELLIPTA royalty interests to Royalty Pharma, the Company's goals, designs, strategies, plans and objectives, including
the paydown of the Company's debt, the impact of the Company's restructuring plan, ability to provide value to shareholders,
the timing of clinical studies, the potential that the Company's research programs will progress product candidates into the clinic, the
Company's expectations regarding its allocation of resources, potential regulatory actions, product sales or profit share revenue and
the Company's expectations for its future financial performance and expectations as to future cash flows. These statements are based on
the current estimates and assumptions of the management of Theravance Biopharma as of the date of this press release and the conference
call and are subject to risks, uncertainties, changes in circumstances, assumptions and other factors that may cause the actual results
of Theravance Biopharma to be materially different from those reflected in the forward-looking statements. Important factors that could
cause actual results to differ materially from those indicated by such forward-looking statements include, among others, risks related
to: whether the milestone thresholds can be achieved, delays or difficulties in commencing, enrolling or completing clinical studies,
the potential that results from clinical or non-clinical studies indicate the Company's product candidates are unsafe, ineffective or
not differentiated, risks of decisions from regulatory authorities that are unfavorable to the Company, dependence on third parties to
conduct clinical studies, delays or failure to achieve and maintain regulatory approvals for product candidates, risks of collaborating
with or relying on third parties to discover, develop, manufacture and commercialize products, and risks associated with establishing
and maintaining sales, marketing and distribution capabilities with appropriate technical expertise and supporting infrastructure, ability
to retain key personnel, the impact of the Company's restructuring actions on its employees, partners and others. In addition, while
we expect the effects of COVID-19 to continue to adversely impact our business operations and financial results, the extent of the impact
on our ability to generate revenue from YUPELRI (revefenacin), and the value of and market for our ordinary shares, will
depend on future developments that are highly uncertain and cannot be predicted with confidence at this time. Other risks affecting Theravance
Biopharma are in the Company's, Form 10-Q filed with the SEC on May 6, 2022, and other periodic reports filed with the SEC. In addition
to the risks described above and in Theravance Biopharma's filings with the SEC, other unknown or unpredictable factors also could affect
Theravance Biopharma's results. No forward-looking statements can be guaranteed, and actual results may differ materially from such statements.
Given these uncertainties, you should not place undue reliance on these forward-looking statements. Theravance Biopharma assumes no obligation
to update its forward-looking statements on account of new information, future events or otherwise, except as required by law.
Additional Information and Where to Find It
This announcement is for informational purposes
only and is neither an offer to buy nor the solicitation of an offer to sell any of the Company's outstanding 3.25% Convertible
Senior Notes due 2023. The Tender Offer is being made solely pursuant to the Offer to Purchase and related materials, as they may be amended
or supplemented. Holders should read the Company's Tender Offer Statement on Schedule TO filed with the SEC on July 26, 2022 in
connection with the Tender Offer, which included as exhibits the Offer to Purchase and related materials, as well as any amendments or
supplements to the Schedule TO when they become available, because they will contain important information. Each of these documents has
been filed or will be filed, as the case may be, with the SEC, and, when available, holders may obtain them for free from the SEC at its
website (www.sec.gov) or from the Company's dealer manager in connection with the Tender Offer.
Contact: Gail B. Cohen
Corporate Communications / 917-214-6603
THERAVANCE BIOPHARMA, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
| June 30, | December 31, | |||||||
| 2022 | 2021 | |||||||
| (Unaudited) | (1) | |||||||
| Assets | ||||||||
| Current assets: | ||||||||
| Cash and cash equivalents and short-term marketable securities | $ | 132,850 | $ | 173,465 | ||||
| Receivables from collaborative arrangements | 12,488 | 14,065 | ||||||
| Amounts due from TRC, LLC | - | 43,534 | ||||||
| Prepaid clinical and development services | 2,311 | 10,245 | ||||||
| Other prepaid and current assets | 7,080 | 8,561 | ||||||
| Total current assets | 154,729 | 249,870 | ||||||
| Property and equipment, net | 12,531 | 13,657 | ||||||
| Operating lease assets | 41,112 | 39,690 | ||||||
| Equity in net assets of TRC, LLC | 148,250 | 67,537 | ||||||
| Restricted cash | 836 | 837 | ||||||
| Other assets | 3,303 | 3,228 | ||||||
| Total assets | $ | 360,761 | $ | 374,819 | ||||
| Liabilities and Shareholders' Deficit | ||||||||
| Current liabilities | $ | 32,624 | $ | 58,587 | ||||
| Convertible senior notes due 2023, net | 228,571 | 228,035 | ||||||
| Non-recourse notes due 2035, net | 396,125 | 371,359 | ||||||
| Long-term operating lease liabilities | 50,642 | 52,681 | ||||||
| Other long-term liabilities | 2,608 | 2,730 | ||||||
| Shareholders' deficit | (349,809 | ) | (338,573 | ) | ||||
| Total liabilities and shareholders' deficit | $ | 360,761 | $ | 374,819 |
THERAVANCE BIOPHARMA, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share data)
| Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||
| 2022 | 2021 | 2022 | 2021 | |||||||||||||
| (Unaudited) | (Unaudited) | |||||||||||||||
| Revenue: | ||||||||||||||||
| Viatris collaboration agreement | $ | 10,878 | $ | 10,934 | $ | 21,565 | $ | 21,319 | ||||||||
| Collaboration revenue | 172 | 1,980 | 181 | 5,852 | ||||||||||||
| Licensing revenue | - | - | 2,500 | - | ||||||||||||
| Total revenue | 11,050 | 12,914 | 24,246 | 27,171 | ||||||||||||
| Costs and expenses: | ||||||||||||||||
| Research and development (1) | 15,571 | 51,093 | 38,824 | 118,692 | ||||||||||||
| Selling, general and administrative (1) | 16,986 | 25,931 | 34,828 | 56,481 | ||||||||||||
| Transaction-related legal expenses (2) | 3,778 | - | 5,057 | - | ||||||||||||
| Restructuring and related expenses (1) | 1,594 | - | 10,918 | - | ||||||||||||
| Total costs and expenses | 37,929 | 77,024 | 89,627 | 175,173 | ||||||||||||
| Loss from operations | (26,879 | ) | (64,110 | ) | (65,381 | ) | (148,002 | ) | ||||||||
| Income from investment in TRC, LLC | 28,127 | 21,926 | 53,237 | 38,473 | ||||||||||||
| Interest expense | (11,884 | ) | (11,612 | ) | (23,539 | ) | (23,485 | ) | ||||||||
| Interest income and other income (expense), net | 2,440 | 1,171 | 2,065 | 937 | ||||||||||||
| Loss before income taxes | (8,196 | ) | (52,625 | ) | (33,618 | ) | (132,077 | ) | ||||||||
| Provision for income tax (expense) benefit | 5 | 220 | (519 | ) | (7 | ) | ||||||||||
| Net loss | $ | (8,191 | ) | $ | (52,405 | ) | $ | (34,137 | ) | $ | (132,084 | ) | ||||
| Net loss per share: | ||||||||||||||||
| Basic and diluted net loss per share | $ | (0.11 | ) | $ | (0.80 | ) | $ | (0.45 | ) | $ | (2.03 | ) | ||||
| Shares used to compute basic and diluted net loss per share | 76,270 | 65,669 | 75,761 | 65,085 |
Amounts include share-based compensation expense as follows: