Q1 2020 Earnings Call
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Ladies and gentlemen, today's conference is scheduled to begin shortly please continue to stand by and thank you for your patience.
Again today's conference is scheduled to begin shortly please continue to standby and thank you for your patience.
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Ladies and gentlemen, good afternoon.
Like to welcome everyone to that Theravance Biopharma conference call.
During the presentation, all participants will be in listen only mode and question answer session will follow the company's formal remarks.
I asked the question Francis Starkey full budget. They just one on your Touchtone phone. Once again, that's start wanting to ask the question is listening via webcast. This new audio webcast device before asking a question over the phone I will repeat these instructions after management completes their prepared.
Today's conference call. These being recorded and now I will like to turn the call over to Gal Cohen, Vice President Corporate Communications any Investor Relations. Please go ahead.
Good afternoon, everyone and thank you for joining the Theravance Biopharma conference call I'm up can you just got our first quarter 2020 financial results and outlook I hope everyone MP remaining healthy Jerry I'm confident in time.
As always I remind you that this conference call will contain forward looking statement, which involve certain risks and uncertainties, including statements about our product pipeline expected benefits of our problem you anticipated timing of trial results and regulatory filing and expected to health and financial results.
Information concerning factors that could cause results to differ materially from our forward. Looking statements is described further in the company's filings with the FCC.
Now I would direct your attention to bite me.
So anyhow, our Rick Winningham, Chief Executive Officer, who will open today's call within overview, followed by Brent Hamann, Chief Medical Officer bring past alone Chief commercial operations Officer, who will review the specifics about our commercial and development portfolio.
Andrew Heinemann, Chief Financial Officer, we'll share our first quarter financial state well during the presentation.
Following some prepared remarks, well open the call for questions.
It's a press release <unk> slides accompanying this call can be downloaded from our website, where you can call Investor Relations [laughter] 508, purely where the real fall for five well be happy to assist you now I will hand, the call to ring the opening comments.
Thanks, Gail good afternoon, everyone and thank you for joining us.
I'd like to start by thanking all of the frontline workers key healthcare workers, putting their wives risks to help others first responders the scientists the entire Theravance biopharma treated.
In many cases, working 24 hours a day to <unk> to find medical solutions, the old viewer heroes and were pretty should've beyond words.
Today, we'll speak specifically to the Theravance Biopharma cold, but night paid response.
In a situation is rapidly evolving as the cobot 19 pandemic.
It was important at Theravance acted with speed and agility focusing on the needs of our employees to keep them say for the needs of the communities, we serve while advancing our business.
We've been tracking the corona or since early January and put in place travel restrictions in shelter in place guidance for a majority of our workforce.
Thanks to investment in infrastructure employees were able to move readily from an office to working from home with limited disruption.
Web based employees have continued their important work with appropriate safety precautions put in place.
The company established a cross functional Cobot 19 task force of senior leaders to guide decision, making and ensure continuous communication.
Shortly thereafter, we made a decision to have the field force, both commercial and medical affairs team members.
Medical scientific and clinical trial liaison spend in person visits.
As you've heard me state multiple times 2020 is a pivotal year for Theravance biopharma much of that has to do with progress on or clinical trial programs. We've been working with regulators ethics committees clinical sites see are those all of whom taken a practical in reasonable approach to ensuring patients in trials continue to have.
Have access to important medications and remain say, while ensuring data integrity is not compromise.
We are grateful for all the efforts to date. So yes, we have delays and Brett Helman will share the specifics shortly but thanks to the tremendous efforts of our team and partners and studies are well manage that we're working to minimize such delays when and where possible.
The teams done a tremendous job through the years building, our global network of suppliers.
And this diversity and because of this diversity, we feel comfortable noting that we will.
I believe we'll be able to continue to supply.
Maintain or supply and access to pipeline medicines through at a minimum the end of 2021.
Thanks to the efforts early in the first quarter, we have nearly 500 million in cash on the balance sheet believe we're well capitalized continue investing.
In our streamlined pipeline, Andrew will walk through the financial specifics at the end of the presentation.
Theravance Biopharma team has long and relevant history of respiratory drug development of new chemical entities for the treatment of Aspen C O P.D. as well as the treatment of nosocomial and ventilator associated pneumonia.
The reports from Lou on indicator that unusual inflammatory condition in the lungs Asia.
With this new virus, our team began working to understand the virus in the in play inventory phenotype.
We quickly combined or immunology and respiratory expertise to accelerate significantly the development of or Nebulized Pan JAK inhibitor, TD, Illinois, three to assess own I know threes utility and progress getting a cytokine storm associated with Q lung injury in patients hospitalized due to Kogan my team.
With the ultimate goal of preventing progression to acute respiratory distress syndrome.
The decision to accelerate Illinois, I know three base was based on a global understanding of hyper inflammation of the lungs and the potential.
Of TD nine to the old I know three to stop decided kinds and the Chemos College responsible for this hyper inflammation.
As well as the downstream consequences and to restore the lung function of Covance 19 patients. If we can prove that own I know three as a useful medicine theravance biopharma as the capability of scaling nebulized medicines to produce hundreds of thousands of doses relatively quickly.
Separately, but importantly, the learnings from the early on I know three development plan will accelerate our understanding of its role in other serious inflammatory conditions of the world.
I'll now turn the call over to Brett share more specifics about the old I know three program and our hypothesis on how it will address the serious inflammatory consequences of Sars Colby to Brett.
Thanks, Rick.
From the assets I'll go live. This particular program was to identify a lung selective JAK inhibitor suitable for inhaled delivery by Nebulization.
When achieved Mexico, the anti inflammatory effect deep within the lung, while minimizing risk assist suppressing the systemic immune system.
We believe TD nine history is that molecule.
Slide seven shows the close of the disease in more detail to illustrate when we aim to intervene as highlighted by the Orange shaded box in the middle of the graph it and what is referred to as the poverty phase of the infection.
They've orientation any in the cool so the clinical disease, the bias demonstrates there any effective and efficient replication anyways.
Specific to on the left hand side of this chance as the viral response phase is characterized by high volume comes in the ways and produces a dry cargo and either in most patients.
In the majority of cases, there isn't appropriate immune response in the host including any increases in interferon that lead to the effect of clearance of the bars and minimal cellular destruction into loans.
However, in some patients the immune response to come Dysregulated as shown in slide eight.
The interferon responses delayed the virus in fits and destroy cells in the deep upon so the lungs, but they do the cells lining the l. He has its like cases exchange occurs.
Section of these cells cold Nima sites results in a losses, the fact and swelling of the membrane lining yield the others that reduces the amount of oxygen that can get into the bloodstream.
And my macrophage and neutrophils infiltration into the L. the is.
This cellular destruction and incentive transportation is also associated with an excessive production cytokines and chemokines producing the so called cytokine storm.
Clinically decided kinds don't produces acute lung injury, resulting shortness of breath and hypoxia and the pony phase.
As a host inflammatory response emphasize and high for information becomes the dominant disease prices patients or increased risk of significant mobility, including the onset of acute respiratory distress syndrome Aon DS.
A need for mechanical ventilation and even day.
Our approach is to block the signaling that decided kinds driving the cytokine storm, thereby reducing the hyper inflammation and hoping the president progression of the kids lung injury.
Slide nine highlight some of our key preclinical data in suppose if I mean honestly potential as a lung selective nebulized Pan JAK inhibitor.
No. One has three is a potent inhibitor of old full Jack enzymes.
Demonstrated that is presently inhibits cytokine joost activation of Jack sensing in human at the field and immune cells as well as mouse models of inflammation.
93 is designed to be lung selective with lung concentration several hundred unfold as the plasma concentrations.
The figure on the right illustrates the relationship between London and plasma concentrations in a resident model.
It's worth noting that the vertical axis is a leveraging scale and in the cases the rents the lungs of plasma ratios approximately 200 phone.
Consistent with our Hogan selective approach under strain was designed to have an extended duration of live action and any drug anything systemic circulation to be rapidly clear.
This is supported by our preclinical wood and PK PD modeling.
Yes, that's the basis will be tested in the clinic, we will have good duration of action and load plasma concentrations well below the levels that would lead to systemic JAK inhibition outside the alone.
We've also completed a robust nonclinical safety package, including 28 day inhalation GLP studies in both rats and Doug.
As seen on slide 10, we initiated a phase one study to assess the safety Tolerability and pharmacokinetics single and multiple ascending doses in healthy volunteers.
We currently completing the single ascending portion of the study to be followed immediately by then most of the sending portion in which cohorts at healthy volunteers will test different doses for seven days.
The program will then is rapidly to invest into phase two study.
Into on this slide as phase two <unk> one.
In hospitalized patients with kind of its 19 in the same clinical setting in the UK as is conducting a phase one study.
This study has been under review by the UK regulatory agency the NHL Ray.
We're pleased to announce today that the image array of crews the phase two study this morning.
Data from the Phase one study well informed the decision to progress not any to the next haneda does and volunteers, but also to the addition of initiation of testing the same seven day dosing regimen in patients.
Once patients can take the ascending dose potion of the study all the data will be evaluated to inform the selection to nominal doses that will be moved forward into part two of the phase two study.
And compared to placebo, along well that will arms were well enough other standards of care, such as oxygen and antiviral therapy.
But to will be a randomized multicenter study conducted at hospital based clinical sites in the UK ease and United States pending the afraid, but I'll be and regulatory approvals in these territories.
The number of patients in each of the study of the patient study is still subject to regulatory review it will be concerned on clinical trials took of once the design is approved.
In addition to safety and Tolerability. The study will evaluate a number of clinically relevant endpoints, including the ratios oxygen in the blood compared to the oxygen delivery to the patients so called P.S. ratios.
Well, that's the proportion of patients who require oxygen I see you admission ending the claim and full assisted ventilation.
As well as outcome measures such as the length of hospital stay.
Survival data will also be collected and reported although this will not be it how it endpoints. That's a vital studies were client very lunch patient numbers to be probably college.
This is obviously a very important Craig on the last of the current pandemic and the pressures on limited resources in the hospital setting.
And we look forward to providing updates on our previous to this at a studies as the year progresses.
Moving to TD 82 said he six on slide 11. This is a lung selective in hills Pan JAK inhibitor in development for the treatment of inflammatory lung diseases, including steroid resistant estimate.
We believe inhaled TD 82 said he thinks could be used in patients with moderate severe asthma and remain symptomatic the sniping compliance on high dose inhaled corticosteroids.
And it could provide additional benefits and asthma control rather than moving patients onto a biological agents or systemic steroids.
As reported last year the results from the phase one single ascending dose study in healthy volunteers and from the multiple ascending dose study in Mount asthma patients were encouraging with no significant safety or Tolerability findings.
Turning to slide 12, he any de study in patients also allowed us to evaluate productions and functional excels nitric oxide ore phenotype and established disease activity by market in asset.
Over the seven days of 80 236 administration. These patients experienced reductions in Phoenix compared to placebo at full doses above 150 micrograms as illustrated on this line.
Based on these encouraging study results were conducting a pot see extension portion of this phase one study in patients with moderate to severe asthma.
These patients represent the population that would ultimately be most likely to benefit from 80 276.
In parallel as noted on slide 13 were also conducting a phase two lung allergen challenge study.
This is a mechanistic study in which patients inhaled and Allergan is provokes an exacerbation like response in the loan under control conditions and its accepted as a strong proof of concept and predicting a reduced risk of exacerbations in patients with asthma.
Both studies have continued with caution through the current pending.
And we expect to report results from part C of the M.A.D. and lung Allergen Challenge study in the second half of Twentytwenty.
That's when discussing the researcher yes, it's enough with failure Alfonso to Frank now to think till international updates on Pelrin and then I'll come back for a brief updates on the other none of this therapy programs in our development portfolio.
Thanks, Brett and good afternoon, everyone.
Before moving into your power specifics for the quarter I went to also express our gratitude to the Theravance Biopharma team answer the frontline health care professionals, many of whom where our customers we will win together.
You powering indicated for the maintenance treatment of patients with C. O. PD is the first and only once daily Nebulized long acting must critic antagonist that provides a full 24 hours of control for patients.
I would like to start with a few comments about nebulization as a drug delivery vehicle during the current pandemic.
As you May know the center for disease control released interim guidelines for limiting the exposure of healthcare workers to the virus that causes covert 19 in which drugs Nebulization and cobot 19 positive patients is listed as a high risk exposure.
Hi risk exposure is defined as being presence in the room for procedures, such as Nebulization when the health care providers eyes knows for mouth are not protective.
The CDC have further guided that it is uncertain whether potential associations between performing this common procedure and increased risk of infection might be due to aerosols generated by the procedure or due to increased contact between those administering the nebulized medication and infected patients, we're working with leading scientific.
Organizations to assemble scientifically substantiated evidence regarding the appropriate use of Nebulized therapy in cobot 19 positive patients.
I'd also like to point out that you power is manufactured in the United States and supply chains are monitored regularly no disruption of supplies currently anticipated.
Now turning to slide 15 work, including the first quarter of 2020 for you powering and we were pleased with customer acceptance of brand performance in the first quarter the year remember that in our commercial strategy with Mylan, we focus on the institutional setting while mylan covers the outpatient CRPD treatment segment.
There are about 800000 patients admitted each year to U.S. hospitals were worsening of their CRPD.
About half of those patients lead the hospital with a prescription for Nebulized therapy, making hospital, a promising setting to establish patients on salary therapy.
Importantly, there are additional CRPD patients that are routinely hospitalized for other conditions unrelated to a worsening of their CRP symptoms, but who require maintenance therapy for their CRPD, while hospitalized and these patients may Additionally benefit from treatment with you power.
Critical to successful implementation is the strategy to have the patient remain on EWP salary for maintenance treatment of their CRPD following discharge from the hospital.
This is best achieved through a collaborative strategy at the field level between Mylan and Theravance Biopharma Representatives and do the diligence and training preparation and frequent communication between the two companies at the field level. This cooperate. This cooperation is working well and we believe it will continue to play an important role in the future success.
Hello.
As long as shown on slide 16, we're tracking key performance metrics, including formulary reviews and winds patient uptick in market access.
So through the first through the end of the first quarter, we continue to observe strong customer response and acceptance.
The team has added 90 formulary wins year to date for a total of 176 formulary wins launch to date. The 176 formulary cover 312 accounts of which 81 were added in 2020 with 82% of those accounts purchasing to date.
Since launch a total of 462 accounts aboard review calorie and about two thirds of these accounts have reordered at least once.
The team is on track to deliver on both strategic imperatives continue to expand the formulary access base and prioritizing patient demand pull through efforts in the accounts with you powering now on formulary.
Well, we've provided exceptional medical information support to the field with 100% of health care provider request fulfilled and under 30 days.
We estimate that through first quarter 2020, approximately 40000 patients have been prescribed youve calorie since launch.
As we are all keenly aware Cobas 19 is having a significant global impact on communities in the health care system.
All Theravance Biopharma commercial and development activities are adjusting to ensure business continuity, while limiting person to person exposure.
We decided to withdraw all sales and medical scientific liaisons personnel from direct customer engagement activities in mid March 2020.
Well face to face sales details are not currently occurring the theravance biopharma sales team was still able to complete 2200 virtual interactions by shifting to the use of technology, including communication via phone email text and video conferencing from March 30.
<unk> through April Thirtyth 2020.
All internal and external interactions have been transition to a virtual format with promotional assets being converted to digital designs to meet these needs.
Going forward, we will be looking to invest more heavily in non personal and digital promotion to maintain adequate share of mine with our targeted healthcare professional audience.
To ensure you powers future success in the post pandemic health care environment since mid March we've been working to quickly understand innovate aspects of commercialization. So that we can adapt ahead of the demands of what may be an evolving healthcare assistance and functionality.
Now turning to our marketing efforts and the impact on marketplace perceptions and prescribing behaviors are marketing research data as of January 2020 showed that you've already achieved an 87% share of the Nebulized Lama market and a 13.7% share of the long acting nebulized market you pull reconsider.
I used to receive its highest ratings on product attributes such as once daily dosing appropriate for severe patients device root of delivering.
Patient convenience.
We continue to be pleased with the accretion awareness level of you've calorie among pulmonologists in both the hospital and community office settings are tracking studies show that 48% of hospital based Pulmonologists have experienced prescribing calorie through December 2019, a 16% increase since July 29.
Team.
58% of targeted office space Pulmonologists had experienced prescribing calorie up from 51% in July 29 team.
And approximately half of your powering patients are using the product in combination with other long acting agents.
Turning to market access traditional Medicare, which represents approximately 83% of the power of patient population has been filling in reimbursing prescriptions more smoothly. So the permanent J code was awarded in mid 2019.
Coverage to date from major commercial insurance plans, representing 8% of be powered business has been positive with 61% of commercial payers covering you pillory today.
Medicaid covers most products in the Nebulized class and requires prior authorization, but does not hinder a Medicare patient from access to power.
With solid market access in our most important segments you power is increasingly becoming an accepted source of potential really for those patients in need of nebulized therapy for the maintenance treatment of theirs Seo PD.
We are only one years to the life of you'd calorie remember, we only launch with full sales support in February 2019, and are pleased with our performance to date.
We believe we are well positioned to continue to drive adoption and to build upon the strong base of target prescribers and payers. We've established to date. The team has demonstrated its agility and flexibility in the face of unprecedented change and is ready to react to continuing market changes as restrictions or relax county by county in the coming.
Months, leveraging a mix of technology virtual and when appropriate in person solutions to continue delivering for the CRPD community.
As noted in our press release today are you powering net sales trajectory could be affected by covert 19 in the second quarter, we've observed increased volatility and youve already sales since the emergence of the pandemic.
However, as we previously communicated we expect to be cash flow positive in the poultry business by ended the year and at this point in time or projections continued to support this guidance, although we will continue to assess and evaluate the impact of cobot 19.
We are preparing for a higher degree of volatility during the remainder of 2020 as disruptions of day to day operations of hospitals and clinics may continue.
Now I'll turn it back the breadth for some additional information on our clinical development programs.
Yeah.
Thanks Frank.
Because of 19 pandemic in associated social distancing measures on creating unprecedented challenges for everyone working in clinical trials and drug developments.
We've been working to adjust to the changes imposed in each of the 35 countries, where we have clinical sites and accommodating new regulatory guidance as in images.
We've been focused on two key elements first to protect the patients and signed stuff and clinical programs and to accommodate their limitations internal planning.
And second to preserve the integrity of on data in the studies.
We've implemented various approaches, including remotes assessments and shipping clinical trials supplies and medication to patients hence.
We've been able to continue randomizing patients through a lot depends on it.
But in much we took a carefully considered decision to temporarily suspend the screen of new patients, but those TV 14, 73 and products team trials for a period of four weeks in order to prioritize ongoing support for patients who are ready in screening and those patients who were already randomized.
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At the end of the four week period, we weren't able to reopen screening in a limited number of sites that meets our requirements, including conducive country regional and site specific criteria to ensure that patient safety and compliance with the protocol requirements and we continue to evaluate old sites on a weekly basis.
So we opened as conditions allow.
The situation is expected to continue to evolve and different countries are expected to respond differently to further outbreaks in terms of look down social distancing restrictions and health care provisions.
As a result, an accurate reestimation that expected completion dates for these programs at this time remains difficult.
With that whom they said for both programs a completion time frame of 2021 without any greater specificity at this time, although we are taking extensive action to minimize the extend to the disruption and delay.
Intend to 14 73 as featured on Slide 18, we recently announced a key publication of 14 73 featured in the general trends and calamitous with William Sandal and as legal said.
This is an important paper because it was the first peer reviewed publication of data. We previously shared at echoed and DDW in 29 team.
And it's a comprehensive review about translational efforts to characterize specifically they get selective features of 14 73.
And on a corporate level. This peer reviewed publication provides insights into Theravance Biopharma is Hogan selective we said strategy and translational development approach spanning the early research preclinical clinical elements of the program.
On Slide 19, as a reminder, 14 73 is into clinical studies in partnership with Janssen.
Ray is a phase two these fresh three study of 14 73 in patients with moderate thing just a daily active positive can license, while Diane is a phase two study in patients with Crohns disease.
Both studies have opinions that impacted by Kevin 19 in slowing enrollments and both studies are not expected to read outs in 2021.
Let's turn now to slide 20 Nm for Lux team, a once daily north indefinitely uptake inhibitor in development for the treatment of patients with symptomatic your Gen G neurogenic with a static hypotension in a wage.
The Registrational phase three program and fluoxetine intends to studies as depicted on slide 21.
First just a class study assesses the efficacy and safety of a 10 milligram dose versus placebo as a four weeks and 188 patients.
Second the Redwood study, which assesses the durability of response and look seen by placing 254 patients including patients from the Sequoia study on open label treatment performance and then randomizing half the patients to placebo in a double blind six week withdrawal phase.
Those studies have been impacted intensive rates of enrollments.
But we have been able to continue enrolling and treating patients and we're taking steps to support patients with roommate visits and assessments as needed.
We now expect us to clear study to report days, when 2021, and we're evaluating impact on the Redwood study that follows it.
To summarize the programs that Franken I've touched upon please see slide 22.
We had a strong focus in respiratory with the commercialized products and multiple assets at various stages of clinical developments, including an acceleration program for Kevin 19.
We have strong global partnerships with economic benefits in G. line and skin selective JAK therapy areas.
And we have an opportunity in a rare disease to help a population in need.
Twentytwenty remains a pivotal year for Theravance biopharma.
I'll now turn the call EBITDA engine for review of our financial results.
Thank you Brett.
And before moving into Theravance Biopharma is financials I'll speak to GSK is trilogy lift to the first and only once daily single inhaler Triple therapy approved for the treatment of C O PD.
From which we receive upward tiering royalties.
As a reminder, 75% of the economics of the income from our economic interest is pledged to service outstanding notes and 25% of income from our economic interest is retained by Theravance biopharma.
In first quarter earnings last week, GSK estimated that half to two thirds of the pharma sales growth are due to covert 19 related demand and stock building, especially in the respiratory portfolio and metrology. His latest Monday March twentytwenty, how to covert related uptick.
That is not reflected for most other brands.
Trilogy, Ellipta revenue for Q1 was $249 million on a global basis.
GSK also reiterated that the supplemental and be a timing for the asthma indication is.
The second half of this year.
There was no mention of the review status of the supplemental NDA for a potential mortality benefit claim for trilogy versus Anoro in Seo PD patients.
It was previously noted that the FDA postponed the Advisory Committee meeting initially scheduled for April 20, Onest Twentytwenty.
And there has been no further public update provided.
Moving to slide 25, I'll begin with our financial results for first quarter. Twentytwenty, then cover our financial guidance for Twentytwenty and close with a brief update on our relatively recent financial financing activities.
Revenue for the first quarter of Twentytwenty was 19.9 million comprised of collaboration revenue of 6.6 million primarily attributed to the Janssen collaboration agreement for 14 73.
And 11.7 million in Milan collaboration revenue related to you calorie.
Revenue for the first quarter represents a 14.5 million increase over the same period in 2019.
The increase was primarily due to an increase in Milan collaboration revenue related to you calorie.
And a larger portion of recognized revenue related to the $100 million upfront payment from the yen some collaboration agreement.
Working 73 that was entered into in February 2018.
R&D expenses for the first quarter of Twentytwenty were 66.0 million compared to 53.8 million in the same period in 2019.
The 12.2 million increase was primarily due to a 12.4 million increase in external related expenses related to the advancement of priority programs, notably 14, 73, and Prolexic team 82, and 80 236 and.
And a 1.7 million increase in share based compensation expense.
And a $2.2 million decrease in employee related expenses.
First quarter R&D expenses included noncash share based compensation of 7.9 million.
SGN a expenses for the first quarter of 2020 were 26.3 million compared to 25.2 million in the same period in 2019.
The 1.1 million increase was primarily due to a 1.4 million increase in share based compensation expense.
0.8 million increase in employee related expenses.
End of 0.69 increase in internal related expenses. These increases were partially offset by 1.4 million decrease related to collaboration expenses table to Milan in connection with the commercialization of you calorie.
Which was formally launched in the first quarter of 2019.
First quarter SGN expenses included noncash share based compensation of 7.4 million.
Cash and cash equivalents and marketable securities totaled 492.1 million as of March 30, Onest Twentytwenty.
We have this capital base as result of actions we took early in the year, namely on February 414th Twentytwenty, We closed our public offering of 5.5 million ordinary shares at a price for the public of $27 per share.
The gross proceeds to Theravance biopharma from the offering are approximately 148.5 million before deducting underwriting discounts commissions, an estimated offering expenses.
And on March 2nd Twentytwenty, Theravance announced the closing of a private placement of $400 million in aggregate good principal amount of non recourse, 19.5% fixed rate term notes.
The notes are secured by a proportion a portion of the future payments the company expects to receive related to royalties due on net sales of trilogy, ellipta with 75% of such payments to be used to satisfied debt obligations until the notes are repaid.
And the remaining 25% of such payments are directed to the benefit of the company.
On an ongoing basis.
The company used a portion of the net proceeds from the this transaction to repay inflow the remaining outstanding balance of the $250 million outstanding 9.0% fixed rate term notes that were doing 2033.
As well as a 5% pre premium on the early redemption of those notes.
We intend to use the remainder of the net proceeds to support continued execution of Theravance Biopharma is clean key development programs.
I'll now turn to our Twentytwenty financial guidance.
We are maintaining our financial guidance for the year based on our current assessment of the impact of Cobot 19.
We expect full year Twentytwenty operating loss, excluding share based compensation in the range of 205 million to $225 million.
Operating loss guidance does not include royalty income from trilogy Ellipta.
Which we recognized in our statement of operations as income from investment in Trc LLC.
Nor does it include potential future business development collaborations.
Factors, such as potential changes to the timing and cost of clinical studies associated with our key programs.
Ongoing cobot, 19 risks and challenges alluded to but to buy my colleagues and other factors could impact our future financial guidance.
Now I'll turn it back for the call back over to Rick for some closing remarks.
Thanks, Andrew situation continues to evolve as the Pandemics effector felt around the world, but we've implemented a comprehensive business plan to support our performance and we're well capitalized to advance the company. Despite the obstacles presented by the current environment.
As you'll see on slide 26, the expedited development of TDO nine to three potentially help patients hospitalized with co Bud light team.
We continue to have a catalyst rich year ahead.
We're continuously assessing the impact of the pandemic older operations and plan for a future progress I'm inspired by the deep commitment of Theravance biopharma team as well as our industry peers and collaborations that are transpiring with researcher scientists health care professionals government and then goes.
Second speeds to find solutions to the short and long term impacts of the disease.
In conclusion, we remain committed to staying focused and respiratory advancing our innovative lung selective pipeline with an accelerated timeline for Ono three to support the global response to cope with my team and reporting on 80 236 results later this year.
We'll continue to manage aggressively our commercial operations and driving sales for you Pelrin.
The answer to.
Theravance Biopharma are well aligned as we drive forward are important research and development efforts or got selective programs 14, 73, and TD 52 or two.
And we're committed to progressing ample oxiclean as expeditiously as possible for patients suffering from in a way to need an alternative treatment.
Our commitment to our mission to transform the treatment of serious diseases through the discovery development commercialization of primarily organ selective medicines designed to maximize patient benefit while minimizing patient risk has never been stronger.
In closing one of the challenges that leaders have these unique types is fashion their organizations. So that they are stronger not only when the organizations emerge from this current situation, but during this time.
Without a doubt because of the actions of the leaders of the company regardless of Fauchier project. The Theravance Biopharma teams stronger today, and we will emerge from this a stronger company and now I'd like hand, the call back over the operator for questions.
Thank you attack and once again, if you will like to ask the question. You made this held by pressing the star Keith followed by the digit won on your Touchtone phone, if Clinton, Indiana wet pet business audio webcast revised before asking a question I'll, let a phone.
Yeah, you said that he can form for today's call may snake, killing it function turned off to allow your signal to reach our equipment again that Scott why didn't you liked to ask the question.
And we'll talk for a moment to a satellite roster.
And we have our first question from Jeffrey partnership with as well be in Leerink. Please go ahead.
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Hi, This is Brad keen on for Jeff. Thanks for taking my questions and thanks for all the updates provides day I mean I've two questions. One on your power and one on TD 14, 73, and I'll start with you Pelrin because if I look at your previous slides disclosures. It shows you added roughly nine to 10000 patients both in Q4 and Q1.
So is that the steady state that we should expect when we come out of coven 19 or is there potential could see an inflection in that quarterly addition, late.
Frank you want to take that.
Frank your views on mute.
Of used for that the way we're looking at the year, we as I said during the remarks were.
We're maintaining the guidance that that we've issued.
We did see some volatility when the pandemic onest hit we seem to be coming out of that the way we view the year the rest of the year Rolling out we plan to.
To reintroduce the commercial folks not if I could use an analogy not sort of using a light switch, but dialing it up.
Looking at the data looking at the scientific information and turning on face to face visits as appropriate based on those data. We do look at some of what's happening in the endemic in the pandemic as as potential points of leverage.
For you powering.
Where where reemphasizing what youve already has to offer as a once a day medicine. Most importantly patients need to have their airways remain open and our data supports full 24 hours of control a once a day translates into being less resource intensive for respiratory therapist, which we find that which you know always find.
No so very busy all the time, but particularly due to this pandemic.
There is potentially safety issues HCP is need to go into a patients room with less frequency.
With a once a day medicine it could result in less P.E. being consumed.
So these are the issues that may cause accounts to take a closer look if the drug like had a drug liking tolerate.
And this these are the issues that were emphasizing and discussing right now so we feel very good about where we are.
We feel like we've got a handle on the challenges we feel like we pivoted the organization very effectively and efficiently and the ships. We believe are going to get us where we need to be by December 30 Onest.
Yeah I just this is Rick I'd just add.
I think the way we see the overall evolution of the brand.
We're still quite early.
In the.
In the adoption curve so.
I think you know our expectations for you pillory are.
Quite high.
We've still got a number of obviously just the numbers that Frank outlined in his up in this presentation. We still got a number of physicians that so where we need to get the complete.
Message of the the features and benefits to those two those physicians so relative to the incremental 10000 I'd say.
I'm pleased with the performance obviously on the first quarter, but I think we're still early in the evolution of the brand.
I would also say we've been pleased with.
With customers willingness to connect with our field forces both the sales representatives of as well as the medical science liaison so that there's clearly still.
Hi level of of curiosity in interest in the in the brand as you might expect for brand that.
The point in the lifecycle the power is.
Okay.
And I want to ask about the 14 73, you see read out as I think the concern here is mixed endoscopy readings for enrolled patients due to colder 19, which could lead to an incomplete data set but I know your original plan was to enroll a small proportion of the total phase three patients in this first phase.
Both to find the right dose, but also to deliver the initial data that the Jane Jade triggered the opting.
So first have there been any cases of missing data and then is there any flexibility here. If that's the case to still fulfill those two outcomes both for the dose and Jan Jay.
Brett I'm happy to take that co brand. This is price we've been very fortunate up to now that we've not lost a single patients actually in our programs either emulex seen all Lena to Kevin's 19 related impacts.
Weve come fairly close with some science being impacted either by this stuff on buying nothing able to accommodate the endoscopy suites, because that's being decommission double transferred over to to other covered activities, but in most cases, we didn't have a skits adjacent sites to supports and in some cases to new facility 17.
Thus the can be completed.
It's actually quite unusual for us to have any.
Any disruption at this point and Sydney.
As things stand right now patients have been able to maintain and their commitment on endoscopy, but it was part of the reason that we chose to pose the screening new patients of if we can that she ensure that we were providing Sarah protection for the patients in the president itself.
Going forward one of the criteria that we.
Evaluates in order to allow assigned to reopen is its ability to support endoscopy, because it's such a critical elements of both PC and the current study. So we're continuing to evaluate that's you asked about the split between phase two and three in your rice 240 patients will be recruited to phase to be and another 600 roughly six.
Hundred patients to phase three but ideally what we're looking to do here in select the preppy does take into that launch phase three portion and that strategy remains in place that haven't been impacted I think many what we'd be looking out over the last six weeks has been more of a logistical disruption caused by in the signs all patients.
Access issues that the designs of the studies themselves I remain unchanged.
Great Congratulations on keeping your megadeals trials, that's important and thanks for the question.
Thanks.
Well I next question comes from Tyler is on your end with Piper happened there.
Hey, guys. Good afternoon wanted to ask on TD nine Oh threes since it looks like uptick from the Cobra 19 program there might be the next.
Big clinical update that we get I guess, specifically with respect to data updates for the program between the sad Bad and then the two parts and the hospitalized patients will we get data update from you all at each phase or can you just I guess generally tell us how the street will be updated with respect to the data from that program.
Yeah.
Got it right no I think you of course will when we go into patients as has been our historical practice will will issue a issue a press release it was a breadth and the you know the entire team.
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Just done a terrific job fill worboys little translational group as well as development.
Getting getting the M. HR a approval today.
To progress what are they get approval on the protocol.
We now just need to work through the remainder of the phase one.
And then and then we're set to go in the first part of the phase two so Brett you ought to.
And then a little bit more color ton of we're working in almost real time to evaluate the information that is generated from each cohorts.
And including independent evaluation. So it's not just on determination to made to the next couple of an independent group is assessing this outside the company as well.
I think that our ability to move fast.
Probably the strongest driver right now than than reporting the data, but rest assured that when taking into account all of the data as it emerges in order to form the infill methods isn't for the next to US we absolutely will present the data, but then it may be does in fact the studies.
Have moved beyond the data points and the time, we speak about than just because of a.
Compulsion, our agency to get to patients and to see whether this let's say.
Assessing the we'll be putting up to date I think one of the elements.
That we will.
The him speak about as we move into pump to the phase two study is the appropriate dose and that'll be a disclosed elements of what we put on clinical trial. So Kevin by inference, you'll get a sense than that won't leave nuts, because the only upon so that program.
Okay. That's helpful. Just for a follow up on the phase two can you give us anymore specificity with respect to what sort of PK PD, you want to see and the multiple ascending dose to have confidence to move into part two and then in part to.
What.
What are going to be the primary endpoints and what would you like to see.
So so anything I say at this moment is subject of course still to ongoing regulatory discussions we are in discussions active discussions with regulators to.
To confirm and finalize the design that you asked about PK and PD. The PK elements will be very much akin to what you've seen us talk about the previous Jack selected for guns.
We are keen to ensure that the JAK inhibition remain localized to the London and that we get very little systemic exposure and we'll be looking for very small no announcement drug in the in the bloodstream.
After nebulized therapy.
We'll also be looking at evidence that the drug is working in the month and included 19 patients one of the.
Most sensitive markets. We believe is the oxygen saturation the amount of oxygen that is getting into the bloodstream and we can improve the information then blends the cytokine storm one of the things that should happen. These patients as they should improve their oxygenation.
So that they didn't needs mechanical ventilation or supplementary oxygen and more and hopefully that drives them.
Sooner.
And put them on the pumps to recovery. So although we'll be looking at a number of measures, including lengthened hospital stay timing I see you time on ventilation ready one of the key markets for US is this P.F. ratios this ratio the amount of oxygen and the floods.
Compared to the amount of oxygen patients are in payment that's a key endpoint for us both in part one and in proxy.
Great. Thanks for taking quite highway.
The other the other point I'd just add is obviously with field experience that we've had.
We do have some.
You know sort of models that were using to be though to help us with where we where we will need to be it I think as we accumulate accumulate more data from healthy volunteers you know those those models will will help us with regard to understanding.
You know sort of the right dose range for us for patients so.
Okay for that.
Yep.
Thank you now and our next question it sounds like lets out west and full buying right.
Hi, good afternoon, thanks for taking questions Nick It obviously, you're starting they this study for TD Oh nine of three in the UK.
And now they seem to set up that you have it you know for the phase one is advantageous you know, what's the timing or do you would it would you even expect to have sites outside at the UK participate in the first part of the case. It phase two study or do you expect that that would most likely see for part to date.
She said before you could it go global.
Thanks, Doug Thats a great question, we believe that I'm staying within the local setting of hot one in phase two actually has assisted in its approval because we believe that having investigators who can learn from the oh.
Findings in phase, one and apply them immediately to phase two offline allows us to move quickly. It combines reissuance eye on these and regulations that they are our eyes on this program, but understand the impacts and can interface.
Findings from but healthy volunteers and patients simultaneously and for that reason, we don't believe that we'll be moving outside of the UK until we get to punch too.
We're in active discussions with regular with regulators outside of the UK to support additional sites joining in part two.
Okay, great. Thank you so much.
Thank you.
Our next question it sounds circuit Tanger Rep Landline company.
Hi, This is Jerry on for Alan Thanks for taking our questions.
A couple of them.
Our and TD 14, 73, when I go back to your comment about you know sites some sites or on a case by case basis reopening and part of their criteria is being able to use.
Endoscopy is that.
Sort of a sort of a gastroenterology guideline sort of issue or is that something that's I'm sorry in terms of elective type of procedure, maybe a little bit more color on on the process of reopening the site and then sort of coupled with that.
Yeah, you're right reiterating your 2020.
Guidance in terms of operating loss and does that imply that maybe or.
You know at some level of confidence that.
You can sort of reopened some of these sites.
[noise], maybe maybe sooner rather than later.
Thanks.
I'm happy to comment on the Endoscopy question, I'll servicing Andrew and like for the guidance element, but.
Just to clarify what we're doing with individual sites is to go back to them to ensure that side stuff are able to get to the facility at the facility itself is able to take patients and and the patient themselves are able to travel into the units in order to complete the procedures that are a class and for the you see.
And friends study I think in endpoints.
12 weeks for the Crane study in that eight weeks. The you see study endoscopy forms a critical parts of the lateral in the valuation for the primary endpoints in this setting it's like one thing to with prudently and judiciously with sites to ensure that they actually can accommodate endoscopy into the patient visits.
So it's not a G.I. guideline necessarily on that.
Instead of working with international guidance on this will just ready working directly with science to ensure that the conditions in press here and we need to continue the study are in place.
And at this stage, we ready on rebuilding.
Oh I'm sorry.
Since the west side of course, there in mind a lot of this will be impacted by issues outside the sites control knockdowns.
Social distancing with Clemens.
From hand policies and so on those.
Impacted clinical sites performance and of course patients ability should come into the science, but one of those sectors are being considered on a site by site basis and a week by week basis.
We have insight to since like believes that they have.
The requisite condition, we pass over to Andrew for the guidance.
Sure and the great question with the.
I would expect Weve, our team has been quite a bit of scenario analysis under different planning assumptions, but with respect to 14 73 in ever lost the teams a key piece studies. The view the key emphasis there is to keep them going as quickly as possible under the circumstances that Brent alluded.
Two in his remarks, so while there certainly has been some delay of spending related related to the delay of the execution of those programs. It does not comprise a is a significant compose.
Portion of the composition of spending across the programs in R&D in 2020.
I'm of course, there are new expenses that are being added associated with the acceleration of the zero 903 program.
And then there are other studies that we've made a decision to delay the initiation of these are not related to the those.
On 14 73 in their Helocs team would have to do it other opportunities for continuing to invest in lifecycle management for you calorie and other programs in our pipeline.
So overall the the shift in spend is different but the underlying or overarching result in operating loss guidance for the year happens to be the same range.
Rick I don't know if you add anything else that.
Yeah, I, just you know to complement what what breadth and Andrew both said.
It's important to understand that the granularity here with which were.
You know, adding sites back I think Craig beta made the comment and he is.
They have section on you know, adding the the sales representatives back on sort of the county by county basis in the United States that sort of the level of granularity that bretts team, that's going through with regard with regard to adding sites back.
Sites within a within a country, but also not only within that country within a given geography I should also say there's been we've had we've seen some terrific.
Terrific sort of teamwork, even between sites in a given the area working together.
To enable us to get endoscopy, God or certain reads, Doug to the benefit of though to the benefit of the patients up to the benefit of our program.
You just can't you can't say enough because these are.
These are.
These are these programs have a certain level of challenge to them, but the level of team work that we've had with our sites really around the country are out around the world. The Brett. So 35 different countries has been has been pretty extraordinary weather taperloc succeed or.
Or the 14 73, so I think we'll get these sites backup will get them Rolling course, we can't predict what's what a second wave might be at I give a geography, but our our basis so broad that.
We're going to we're going to very very actively manage the.
The re initiation of the side sort of global basis.
Great. Thank you.
And that's having line there ladies and gentlemen, if you have a question just press Star then one on your telephone keypad.
Question on account does that crowd Brett.
Green light.
No. That's your line is got to gear.
Sorry about that club sorry about that actually had have you.
Yes.
Going back to to nine or three just given the fact that given sort of the emergence of covered that team is sort of that program got accelerated.
That change the trajectory or you're thinking in terms of development for the four of the drug in the original clad indication.
As you will have accomplished a good amount of phase one work in covert 19 or fork over 19, I'm in healthy volunteers or you know once this sort of.
How this plays out you all sort of to be determent. Thank you.
Brett you want to touch on that at all going to show.
Doug I think him we had been in very advanced preclinical planning for testing a nine as free in patients who have undergone lung transplants and really the focus was going to be to see whether we can reduce a rejection rates inpatient Iceland transplants, none of that has changed intensive the opportunity.
That would be presented by using a nebulized product that was able to penetrate deeper into the loan and really I think what we recognize is this I didn't get equally wish the will to go through Kevin, but having an asset that could be utilized in the session. We really felt compelled to move it in this direction, we did not leads and they come from.
That is our ability to come back to thinking about fine in the future in fact, if anything information that we clean in this any stage in deafening down information could really inform abroad slate of of potential uses a JAK inhibitors in the month of because there were several other non Barney relation.
Well just have Aon DS and several other inflammatory conditions in the line, where this could benefits Rick.
Yeah, I think there they're sort of two segments.
Both of which are informed by the work that's ongoing with the.
Input hyper inflammation related to cope with my team one of the one of the segments of work or other acute respiratory distress syndrome.
Type of causes and clearly the information that we get with regard to suppression of cytokine is coming out of of this the inflammation is different at least different types of a rds, but this pan JAK inhibitor getting at end of the long and getting it out there shouldn't be some similar.
Charities enough similarity such that we can take the learnings from Covidien like T and apply it. There then there's another completely different stream of work which is.
Acute low.
Allograph dysfunction or or clad and cloud for chronic or acute as well as long sarcoidosis at a couple of other where a significant.
Conditions are the log litter driven.
By imply inventory processes.
Like regardless of whether you're looking at the R&D Us group or this other group both of those are going to be informed by the work that work is ongoing a pure with trading hyper information related to cope with my team.
Okay, great. Thank you so much.
Thank you.
And would appear that we've had no further questions on the I would now like to kinda can kinda back then Langham. Please go ahead sorry.
Yeah, I'd like to thank everybody for joining us today on the on our update.
As I said, the beginning I'd like to thank you know all the first slide responders the health care professionals.
That are in emergency rooms, or the hospitals all over the world as well as the Theravance Biopharma team is been doing a terrific job throughout this throughout this pandemic wish everybody on the phone good health and their families and stay safe and I again appreciate you.
Joining us for this update take care.
Oh yeah.
And this concludes todays conference call. Thank you for your participation you may now disconnect.
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