Q2 2020 Theravance Biopharma Inc Earnings Call

Ladies and gentlemen, please standby your conference call is scheduled to begin momentarily again. Thank you for your patience and please standby your conference call will begin momentarily.

[music].

Ladies and gentlemen, good afternoon, I'd like to welcome everyone to the Theravance Biopharma conference call.

During the presentation, all participants will be in listen only mode.

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Today's conference call is being recorded.

And now I would like to turn the call over to Gal Cohen, Vice President Corporate Communications and Investor Relations. Please go ahead.

Now can you never Atlanta, Thank you for joining the Theravance biopharma.

And what counts [laughter] quicker 2020 financial results no.

Hello, My views on this conference call.

Forward looking statements, which involve certain risks and uncertainties, including statements about our pipeline [laughter] you anticipate a tiny tribe myself regulatory filings and expect itself on financial result.

Anything concerning factors that can cause results to differ materially from our forward looking statements. It just got further in the company's filings.

Okay.

Now I would direct your attention to side right.

Joining us or Rick Winningham, Chief Executive Officer Open today's call then overview, followed by how well keep commercial operations officer, Brent Hamann, Chief Medical officer or via the specifics about commercial development portfolios and your Heitman Chief Financial Officer.

Yeah, our second quarter financial update [laughter] presentation.

Following their prepared remarks, well open the call [laughter] a copy of the press release in the slides accompanying this call can be downloaded from my job site, you can call investor relation excite zero 808 or in Europe for CPI well be happy to assist you now I will hand, the call to ramp [laughter].

Thanks, Gail good afternoon, everyone and thank you for joining us.

I'd like to start by thanking everyone at Theravance biopharma for their passion their dedication to our mission in the communities. We serve despite the pandemic or teams leaned into our core values.

And mobilized to the endured in ways beyond my expectation.

We are advancing your long term strategic goals, primarily focused on inflammation and delivering organ selective medicines that we believe held the potential to deliver greater efficacy and safety.

To patients.

This quarter represents the company's first complete quarter working remotely aside from lab based employees have continued their important work with the appropriate safety precautions and place 2020 remains a critical year for Theravance biopharma and much of that has to do with progress or commercial product you pilloried, which we continue to forecast to become cash flow.

Positive this year or the U.S. by the end of 2020.

And in addition, our clinical programs, we've been working diligently to ensure patients in a hospital setting persio Pee dee remain safe and have continuous access to your pillory.

Patients that are late stage clinical trials for air block steam and TD 14, 73 continue to be enrolled while ensuring data integrity is not compromise as noted in our last quarter update we have delays and our clinical trial and Brett Helman will share additional details. Shortly however, thanks to the tremendous endeavors of our teams supply.

Irrs and partners studies are well managed have adequate clinical trial supply and we're working to minimize such delays where and when possible.

Thanks to the efforts early in the first quarter well capitalized continue investing in our clinical pipeline Andrew will walk through the financial specifics at the end of the presentation I'll now turn the call over to Frank to share an update on your Hillary commercial operations right.

Thanks, Rick and good afternoon, everyone, let's advanced the slide five.

You powering indicator for the maintenance treatment of patients with C. O. PD is the first and only once daily Nebulized long acting Musker renick antagonist that provides a full 24 hours of control for patients.

I'd like to start with a few comments about the impact of cobot 19 on hospitals and health care.

Lower hospital census, and patients with C. O PDP symptoms weary of seeking treatment, which requires them to leave home have contributed to a reduction in the inpatient use of nebulized products, including you powering during the second quarter.

Also recall that our target audience is primarily pulmonologists, many of whom were appropriately focused on treating covert 19 positive patients during second quarter.

Office space Physicians report that patients are either canceling regular health checkups for using tele medicine to avoid the risk of exposure to covert 19.

In qualitative research with health care professionals that treats the on PD, we've heard consistent feedback the telemedicine is not sufficient for assessing and reassessing patients to determine if the treatment changes necessary.

As a recently launched brand you power is affected by any pressure on new to brand patient starts.

In acknowledging the changes to our external environment, we rapidly shifted resources to be more heavily invested in non personal and digital promotion than before the pandemic along with metrics to measure effectiveness.

Early feedback on our ability to access HCP is and deliver appropriate messages in the new normal has been encouraging.

Remember that in our commercial strategy with Mylan, we focus on the institutional setting while mylan covers the outpatient CRPD treatment segment.

Along these lines moving to slide six we're tracking key performance metrics, including formulary reviews and wins patient uptick and market access currently launch to date formulary wins totaled 181 hovering just under 350 accounts with 80% of these accounts having purchase.

Is today.

Since launch a total of 496 accounts have ordered you calorie and two thirds of these accounts have reordered at least once.

Despite the impact is a pandemic in the second quarter. The team is on track to deliver on both strategic imperatives, expanding the formulary access base through the second half of the year and prioritizing patient demand pull through efforts in the accounts with you calorie on formulary.

We've provided exceptional medical information support to our customer base with 100% of health care provider request fulfilled in under 30 days.

We estimate that through second quarter 2020, approximately 44000 patients have been prescribed you calorie since the U.S. launch in February of 2019.

Turning to our marketing efforts and the impact on brand perceptions and prescribing behaviors data as of April 2020 show that including QB, a retail data and durable medical equipment market segment, you calorie achieved the 92% share of the Nebulized Lama market.

And 60% share of the long acting nebulized market with share increasing every month through April.

As of June 2020, 51% of each Cps that participated in our marketing research and the Trizzino PD had prescribed you powering up from 39% in September 2019.

Penetration is even higher 68% with you pillory prescribers contacted in our marketing research treating disproportionately more severe and symptomatic patients classified as gold groups C and D, suggesting our product positioning and increased focus on key patient types is hitting the mark.

Turning to patients and their ability to access you calorie, we continue to work to expand coverage for the medicine.

Collaborating with Mylan and by working through logistical challenges presented by the pandemic. We're pleased to announce that you Pell Reis commercial coverage has increased to 72% from 62%.

This improving picture for excess plays an integral role in the strategic outlook for you calorie for the balance of 222020 and beyond.

Before covert 19 related restrictions on our field based activities institutional volume was strong and growing in our targeted accounts.

With our representatives now returning to site specific in person HCP engagements at the beginning of the third quarter. The focus is to return to growth by driving awareness and adoption.

With an increasing number of hospitals purchasing you powering prescribers, becoming more familiar with the brand and increasing using key patient types. We believe you pillory can return to growth is health care systems adapted recovered from the impact of the pandemic.

As our careful in selective re entry continues we will monitor our environment and our investments closely and are poised to react quickly.

And now I'll turn the call over to breath for an update on our clinical development programs.

Thanks Frank.

19, pandemic and associated social distancing measures have created a challenging environment for clinical trials and drug development.

We've been working to adjust to the changes imposed in each of the 35 countries, where we have clinical sites and the culminating new regulatory guidance as it images.

We've implemented various approaches to ensure a studies are able to continue in a safe manner, including remotes assessments and shipping clinical trials supplies and medication to patients heads.

We've been able to continued randomizing patients in both the uncle upstream and TD 14, 73 clinical trials throughout the pandemic.

This includes a full week period in March and April when we suspended the screening of new patients in order to prioritize suppose the patients who are ready in screening and those patients who already randomized.

For the past three months, we've seen a steady increase in the number of sites that are able to reopen and enroll new patients and were announcing enrollment rates that match or exceed those seen before the pandemic.

We continue to monitor the situation around the world closely but I can pull costs are consistent with 2021 readouts for both of our late stage clinical programs and products team and TD 14 73.

Moving to slide seven.

Provide a brief updates on a number of projects in our pipeline.

Mostly and Prolexic team a once daily north in that front, we have taken himself in development for the treatment of patients with symptomatic eugenic over static hypertension or in a wage.

The Registrational phase three program. The band products team includes two studies Sequoyah assesses the efficacy and safety of a 10 milligram dose.

Placebo as a four weeks in 188 patients.

Redwood assesses the durability of response to end proliferating by placing 254 patients including patients from the Sequoia study on open label treatment performance.

Then randomizing concept the patients to perceive it in a double blind six week clinical phase.

Both studies have been impacted intensive enrollment rates, but have been able to continue enrolling patients.

Given the ongoing pandemic and the fragility of the patient population the company with input from the FDA and other regulators and ethics committees is working to amend the protocols for these clinical trials to accommodate a decentralized approach in which patients can participate in the studies from.

Without needing to attend clinic visits.

We expect to quit to report results in 2021.

Turning to TD 14, 73 are open selective pan JAK inhibitor for the treatment of inflammatory bowel disease in partnership with Janssen.

We have two studies in progress.

Ray is a phase to be slashed three study a 14 73 in patients with moderately to severely active ulcerative colitis.

Diane is a phase two study in patients with Crohns disease.

Both studies have been impacted by Kevin 19 by slowing in moments and best studies are now expected to report results in 2021.

TD 80, 236 lung selective inhaled Pan JAK inhibitor in development for the treatment of inflammatory lung diseases, including steroid resistant ESMA continues to progress in the clinic.

We're conducting a cost see extension portion of the phase one multiple ascending dose study in patients with moderate to severe asthma and then power, though we're also conducting a phase two lung allergen challenge study.

Mechanistic study in which patients inhaled and Allergan that prevents an exacerbation like response in the London under controlled conditions and is accepted as a strong proof of concepts in predicting a reduced risk of exacerbations in patients with asthma.

Both studies have continued to enroll 320 20, and we expect to report results from currency and from Dillon Allergen Challenge study in the fourth quarter of 2020.

TDR 93, a lung selected Nebulized JAK inhibitor is currently in development for the treatment of hospitalized patients with acute lung injury caused by coated 19.

TDO nine industry has the potential to inhibits the cytokine storm associated with acute lung injury.

And prevent progression to acute respiratory distress syndrome.

In doing so we aim to reduce the number of patients who require admissions I see you persistent ventilation and to reduce the risk of debt.

We accelerated development significantly in response to the pandemic completing a phase one dose ascending study in short order and initiating a nested phase two study in hospitalized patients in the UK in June.

But now adding sites in other regions, including Europe ambiguous to the acceleration moments in this phase two study.

Theravance biopharma the insights we generate with TD nine entry for coated 19 will be important in informing its potential use in other pulmonary settings.

We see an opportunity to develop TV or not and three in additional settings, where hyper inflammation of the lung is presence, including acute lung injury from other sources and the treatment of acute and chronic lung transplant projection. We look forward to updating you on our progress with TDR 93 in future calls.

I'll now turn over to Andrew.

To review our financial.

Thank you Brad.

Before moving into Theravance Biopharma financials, I'll speak to GSK is trilogy on slide nine.

Trilogy is the first and only once daily single inhaler Triple therapy approved for the treatment of C O PB from which we receive upward tiering royalties.

And as a reminder, 75% of the economic the income from our economic interest is pledged to service outstanding notes with the remaining 25% retained by us.

During our second quarter earnings call on July 29th GSK noted the trilogy continued to lead the market as a single and handler triple therapy, and it grew market share with sales up 55% year over year and reported net sales of $241 million on a global basis during the quarter.

Furthermore, GSK continues to expect an FDA decision regarding a potential approval of label expansion to include an asthma indication during the second half of 2020.

Also regarding trilogy, we're providing an update today regarding our most receipt recent dispute with Innoviva in connection with interviewed as management of Theravance respiratory company LLC known as Trc.

As part of its management responsibilities Innoviva is required to deliver a financial plan to Theravance Biopharma 30 days prior to the first day of each fiscal quarter.

On June Onest Innoviva provided us with the draft plan for the quarter ending September Thirtyth 2020, indicating the Trc was considering the potential investment of Trc funds into certain privately held companies.

As our 8-K on June 10th disclosed we objected to do with holding of these funds by Trc for those purposes.

On July 16th Innoviva, and Trc filed a complaint with the Delaware Chancery Court seeking an order from the core to that among other things. The 2019 Arbitration Award conclude conclusively established Innoviva possesses the authority of manager of Trc, two caused trc to use the try.

LNG royalties to make these and other investments.

The court directed the parties to refer certain relevant questions raised by the complaint to the arbitrator into 2019 dispute.

2019 dispute.

Who in turn determined that the 2019 proceedings did not resolve the issues currently in dispute.

On August 15, Innoviva and Trc voluntarily dismissed the complaint without prejudice.

We're obviously pleased with that determination, but it does not resolve the dispute and quite simply we believe that innoviva and Trc are wrong and that Trc does not have the authority to use these funds to invest in private companies without our consent.

We are pursuing and continue to pursue the protection of the interests of the company in this manner consistent with the dispute resolution procedures of the Trc LLC agreement, including if necessary the initiation of a new arbitration proceeding.

Moving to slide 10, I'll cover the highlights of our financial results for the second quarter 2020, then touch on financing activities during the quarter and close with our financial guidance for Twentytwenty.

As the quarterly financial highlight as for quarterly financial highlights revenue for the second quarter of 2020 was 15.0 million operating loss was 72.2 million or 55.6 million excluding share based compensation expense.

Cash cash equivalents and marketable securities totaled 438.3 million as of June Thirtyth.

Turning to financing activities on June 22nd 2020, GSK completed an offering of $300 million of exchangeable senior notes due 2023.

280.3 million of those notes, our exchangeable into existing ordinary shares of Theravance biopharma.

The notes are guaranteed by GSK and will be exchangeable up the option of note holders on any business day on or after September 1st 2020.

Under certain terms and conditions outlined in the offering guardians.

Again importantly, the company will not be issuing any new shares in connection with the GSK notes offering.

And finally regarding guidance, we are maintaining our financial guidance for the year based on our current assessment of the impact of coking coal and 19 pandemic.

We expect full year 2020 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, 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 Kobin 19 risks and challenges and other factors could impact our financial guidance.

Now I'll turn the call back over to Rick for closing remarks.

Thanks, Andrew we were continually assess assessing the impact of Cobot night team on our operations and we plan for a positive future as I mentioned when we started this call I couldn't be more grateful to work. The team has been able to deliver both in the labs in the field as well as the as well as our team work.

Working remotely going forward.

We will incorporate key learnings into our process and we plan to emerge from the pandemic, an even stronger company turning to slide 11, we're making significant progress on a number of critical clinical programs that are the result of nearly a decade of investment and breakthrough translational research by our research and development.

Organization.

Executing on our organ selective research strategy, we've developed a portfolio of highly differentiated therapeutic options.

In immunology and inflammation that address a range of unmet medical needs. The starts with inflammatory bowel disease and crowns at ulcerative colitis, which is really based on earlier work that we've done in respiratory inflammation and extends to Ophthalmics and includes respiratory disease.

Like idiopathic pulmonary fibrosis.

As of today than what you can look forward to and future Theravance Biopharma clinical programs and therefore future data on the phase three program, an ample OXXO team as well as the phase to be three program for 14 73 in ulcerative colitis.

Three phase two programs 14, 73 for Kronos 80, 236 for asthma and TD zero 903 for acute lung injury caused by Covance.

Three phase one programs reporting this year with 52 or two already reporting topline results 80, 236 phase one part C and TD Oneida three phase one both plan to report in the fourth quarter plus our research engine will produce a minimum of too I NDS not just this year, but annually moving forward on top of the develop.

Portfolio and research engine, the Theravance Biopharma commercial team will continue to grow market demand and share for you penetrate the advancement of this exciting clinical development portfolio with a constant stream of data rich catalysts together with the growth of you've calorie and the trilogy royalties royalty stream places theravance biopharma and a strong position.

And to deliver value to our stakeholders.

We plan to deliver state of the art anti inflammatory medicines, leveraging our organ selective strategy designed to maximize patient benefit while minimizing patient risk our commitment to our communities. We serve have never been stronger now I'd like to.

I'll hand, the call back to the operator for questions.

Thank you Sir once again, if you'd like to ask a question you may do so by pressing the starkey followed by the digit one on your Touchtone phone.

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Again that star one if you'd like to ask a question.

And we'll pause for a moment to assemble our roster.

We'll have our first question from Jeffrey Parker with SBB Leerink.

Hi. This is Greg can you know on for Jeff to for me on the Cobot program based on your internal work can you help us understand the timing of.

External data Readouts, you will be anticipating that might help inform your go forward decision for the inhaled Jack you know anything on oral jacks or other immunomodulators that would be helpful.

And then on the late stage pipeline, you're giving guidance of 2021 for readout.

Broad can you help us understand what's preventing you from being able to guide to a more specific quarter or even first half or second half.

Especially when you stated that enrollment rates are now at or above the pre cobot levels than these trials previously had year end 2020 readout timeframe.

Thank you.

Yes, Brad both both great questions.

I'll take take them, both and then and then asked Brett to comment on your first question you know obviously, we're looking at.

All of the most of the products, particularly all the products dealing with inflammation in the in co, but I think it's very important to understand.

Brett hit on this what we're doing with the Cobot program at night of three is we're studying a hyper inflammation state in the long that's driven in this in this instance, you'll buy Sars koby too.

That's important for us to understand no because if you as you look at the range of potential diseases to treat between 93 at 80 236. It really covers a range of from from acute hi for inflammation two inflammation in a more chronic state.

So that's that's important to understand with regard to our overall objective objectives for both nine Oethree at 80 236 relative to other other programs.

It's important to understand as we look in to continue to do.

Work in our labs as well as with external collaborators that it does appear nail. It actually appeared that appeared to be the case beforehand pre clinically that more cytokine blockade was going to be required to the along with simply.

Simply I'll six.

Our own perspective is that the ability for four of targeted lung agent like 903.

Is that we can we can achieve JAK inhibitor occupancy in order to achieve the target blockade of of the relevant endpoints in acute setting and in fact, we can achieve that occupancy biod or through an organ selective approach that's systemic JAK inhibitors likely don't achieve.

Because it's simply impossible for them to achieve such a high target occupancy in the low.

Relative to the clinical studies I'll make a comment that all then I'll turn it over Brett will clearly the uncertainty is really driven by the depth and breadth of the co but.

Endemic they affect each of the studies late stage studies differently, whether it's the to be three program for you see the phase two program and chrome or the phase three program for four ample OXXO team. So there's a bit of a sliding scale with regard to affect other studies first half second half at I'd say.

Right now because we don't know what what the falls going to look like Thats really where we're uncertainty arises from Brett.

Thanks, Rick I think he said it well I think the.

If we look back over the last six months I would say coming into much we wouldn't have expected to see the impact that we did face very much in through April.

We didn't believe based on current projections that we would face worldwide shutdown as we did during March and April but it is likely the parts of the world will be affected again through the fold and through the winter with pockets of endemic closing.

Localize shutdown, we do think we've got good mitigation strategies in place because we had so many countries that are participating and so many sites participating in each of those countries that of course, there isn't uncertainty factor normally what happens in.

A crisis, if there's one country that has an impact and we just divest our efforts to other countries quickly when not able to do that in the pandemic because so many countries affected simultaneously, we have some and sort of sense of how that will go through the remainder of this this year, but because it's not.

Not a perfect science, we just set note.

What the what the forward and what the winter will look like.

Thank you. So this question.

Yep.

So just to clear out.

Rex coming from from earlier, we of course, attracting a lot of the mechanisms that are reading up with very interested in watching how the systemic JAK inhibitors.

Thank you read outs, we didnt notes that those JAK inhibitors of being used in most severe patients actually one of the things that we lengths from the any we read outs impeding from types realism that the antibiotics is that these therapies appear to have been reserves until very late in the disease. When patients are and I see you and on the bench laser and one of the recent.

That may be.

The cases that these drugs and then to have side effects and sometimes significant side effects, including.

Flushing disorders.

And obviously the risk of secondary infections.

And with our Pan JAK inhibitor is to intervene earlier, it's to intervene as patients admitted to hospital and really to focus on preventing them from progressing into the assay. So we do obviously pay attention to on how these other therapies have a news that we still believe that without organ selective approach, we should be able to benefit a larger number.

Patients in a hospital setting.

Breaks or you had one last time.

No I was just going to close as trying to provide a bit more clarity on timing it as our obviously as our objective to achieve.

The data necessary and get the yen set up down in 2021 so.

All right and assess Brad.

No.

Next question comes from Marc Frahm, with Cowen and company.

Your line is now open.

Yes, Thanks for taking my questions first just to continue on this question is on that.

Kobe trials. The you mentioned kind the exposure do you think you're getting in the level of inhibition that you can get to with an enhanced product versus the systemic JAK inhibitor.

Would you be able to characterize.

Given what you've seen in the phase one what level of ambition, you think you're getting too and more concrete terms relative to the systemic.

And then what we've also seen from some of these trials that have read out already has a real time dependence for certain mechanisms as to when the best time to intervene and when to actually see efficacy or potentially even see harm. If you are at the wrong timing. So what gives you confidence that this is the right spot to use the JAK inhibitor.

Yes, that's a that as a terrific question on the timing.

Thank you know we've done a lot of lot of work on.

On the projected occupancy that we can achieve.

With.

With nine O three I think that will be the subject of publication in the future. So I don't really want to assure that today, but I think the important aspect of it is that.

We believe based on the data that we have that we can achieve a much higher level of target occupancy with the.

With the inhale JAK inhibitor, the what is possible through.

The systemic JAK inhibitors, so Brett.

Thanks, Rick had just to add to that great question and that not any we done modeling to trying to anticipate this one of the strength of the phase one phase two program is that we're testing more than one does and so we'll actually be able to explore whether on any predictions on modeling on that on target engagement are actually carried through both into.

The phase one day, so that obviously, we're now looking at but particularly in our phase two setting where we're looking at patients and and clinical outcomes.

You are absolutely the right around the time dependency recent evidence for example, with Dick's methods then in the UK has demonstrated that decks and that doesn't is used in the outpatient setting. It makes you comfortable that went to teeth in an inpatient setting it may be beneficial and that's an important signal for us because it demonstrates that at some point in this disease.

The virus itself becomes a secondary consent to hiker inflammation. It does appear that about 15% to 20% of patients have an abnormal immune response to the virus once it gets into the lung and that abnormal trigger is what.

Stimulates the cytokine storm, that's where we believe we have the opportunity to intervene with a broad based anti inflammatory.

Targets, the lunch, which appears to be the organ most HUD hits by this fires and so our focus is on intervening literally as patients present to the hospital with hypoxia, let's see eneas indication that the inflammation in the lung has become the range or dysfunctional and so that's the point that we into the we have.

Seen some reports with.

Broad based anti Inflammatories, the Hogan reserves until we actually you and at that point. It appears that these patients are actually tufan gum sadly in the most cases.

The cytokines still in the benchley leads to multi organ failure, and that's the point of which mortality rates extremely high.

Vision on proposal on hypothesis here is to intervene earlier in the disease states in hospitalized patients.

To be able to try and break that that cascade.

Okay, great. Thanks.

Very helpful. And then just quickly on your guidance that you calorie that you're maintaining that you probably will be cash flow positive by year end, it's embedded in that I assume some sort of.

Assumption on the path of thick coated pandemic or at least within the United States. I guess can you give us some clarity on what you're assuming for the remainder of the year it take it to get to cash flow positivity.

Sure I think and broad brush terms, we cannot will start that asked Frank to to add to it I mean, even.

Even coming out of June it into July.

We've seen.

I've seen a rebound.

In the business as.

While still obviously parts of the United States have been effective.

That you've got business conditions, overall or better and we're seeing that reflected.

In sales in July we we would expect that we continue as.

To begin to manage overall in society, a little bit better and including the management of Seo PD patients a little bit better as we progress through the year in.

Argument that continues to be affected by covert but freight we want to put a little more meat on the bones, yes, yes. This.

Just from a process point of view I mean, we pulled our reps out of the field in the middle of March.

In fact, it was on a Thursday and that following Monday, we were training them on how to do promotion be Zhu meetings telephone calls and text messages. So.

We scrambled clearly scrambled and I have to give a shout out to our training department, they really prepared our field people well, we weathered the storm.

Pretty well and April was was a bit of a reset and since then we've seen steadily increasing new to brand our axis.

Our wholesaler shipments in.

July where the highest since March in fact in July they were almost as as high as March.

In July 25% of our Rep interactions were face to face and.

MSL activity was very high in July also in fact, it was as high as it was in February which were considering pre pandemic also a lot of the activity has been around formulary. So there there has been some outreach to us from hospitals, we believe it's from pent up demand.

On to get you powering on formulary as well as patients who as I mentioned in my remarks have not venture the doctor.

To get their regular checkups et cetera and are now.

And are now either doing that via Tele medicine or personal visit so we're on course to be cash flow positive by the end 20 Twond.

Okay. Thank you.

Our next question comes from Autopart Rama with JP Morgan.

Hey, guys. Thanks, so much for taking my question just once the quite on Redwood and the protocol adjustments you talked about are there any risk that we should be considering here on the data integrity side and the process becomes a little bit more decentralized. Thanks, so much.

Brett Thanks.

Thanks, Rick.

Thats Great question, we've been working very closely with regulators and with ethics committees to ensure that as we move to this take decentralized model data integrity is actually foremost in our minds that plus patient safety ensuring that these patients are able to be supervised in assessing at the we taking great care working with.

External experts to ensure that the measures that we do in patients who wins match as closely as possible. The measurements that they would have done in the clinic.

They are in mind that in these studies a number of the endpoints that with depending on the client we call period of up to one week and that's me cold period would have been exactly the same with it the patients the scene in the clinic to report that recall or if there is seen in the home. So we think that and taking to the primary endpoints for the evaluation of a.

Seven day recall on sentence that should not be to serve those four disrupted by evaluating these patients can happen what it is allowing us to do that at least to reach patients who are either reluctant or unwilling to come into the clinic. So if anything its assisting us in identifying patients.

And we'll be accessible truck program in a way that we went previously able to the feedback from our sites has been encouraging.

Actually with this particular disease given the effort jealousy at these patients and their.

Struggles with daily living and being able to get up in the best We think this may actually means assist channel our recruitment efforts and through coated.

Brett you use that you used the phrase seen in the home patient seen in the home, perhaps you can put a little bit of description on the yes of course, thanks rich. So what we mean here is that we're actually doing a number of things that allow us to ensure that these patients still a supervised as they might be in the clinic.

That includes.

Based colds or video calls from key physicians, who evaluate these patients. It also includes home visits five chain nursing.

Who are fully trained on the protocol and are able to conduct some of the assessments, including easy James blood draws blood pressure and observations of patient symptoms in their hands. So it's a combination of both technology and face to face contact with appropriate pp. He obviously.

To ensure they see the visit to end the patient safety, but really what we've tried to do is emulates as much of the in clinic experience as possible.

Our next question comes from Douglas I would H.C. Wainwright. Your line is now open.

Hi, Good morning, Thanks for taking my questions. Just first question in terms of nine or Threeq as Youve transitioned into the phase. Two study you noted in the press release that you're looking Q open site globally. If is it becoming a challenge just given the fact that UK has achieved certain sort of level of.

Suppression.

And is it just are you is it can be.

Challenge just meeting your targeted involvement in that region.

Yes.

Thank you great question Doug.

We've seen a slowing of the rates of hospitalization in the UK in response to appropriate social distancing.

Approaches obviously that was initial stage.

We were able to benefit from the tail end of that search in the.

Then identification of the first patients.

But I think it's fair to say that our strategy now is to broaden the next so that we're able to pick up on many spikes as they occur in different countries. So we expect to see ongoing Sykes as we're seeing in countries around the world like Brazil, Mexico, obviously, the U.S. as an important.

Country for us intensive.

Enrollment as well so.

Current view, which was always part of our strategy with the phase two study it was to expand the message sites. Once we had done this early parts of the nested program and that's really what we are implementing now having to be able to catch patients. We have at least flat as it could either in different parts of the us or indeed in different parts of the world on.

And then ongoing basis lumped them, we hope that that will mitigate against what you've just described which is that one country may have a decline in its rates, but if we have broad enough in our coverage that should be compensated for by an increase somewhere else.

Okay, Great and then in terms of you powdery.

It sounds like we started to see a nice recovery are you seeing variability within the U.S. based on sort of.

Sort of how much.

You know sort of that the levels of covered that Jane and how that's affecting.

Social distancing or is the recovery pretty widespread across the U.S.

No I think just.

This is an Frank made.

Made comment to to sort of low.

Or our interactions are heavily dependent.

On on local conditions and sites.

And these are in different different places in different stages in different parts of the country Frank you.

No that's exactly right I mean, we're essentially following local guidance.

Nearly all of our territories, our quote unquote opened but they may range from one account too.

Nearly all accounts being open so it's literally ZIP code by ZIP code evaluation at this point it again following local guidance.

And this this is also.

The importance of what we call hybrid work of doing both in person calls.

As well as leveraging the technology, that's available to us will likely to continue to be important over the next several months.

Okay and then just one final question I know there were some question and the scientific community about sort of the risks of using nebulized therapy and could that spread the virus.

Have you.

Sort of got is that sort of reached some level of resolution.

And now would be helpful.

To pick up perspectives on that thanks.

Franco breath, either one can take that.

So I can coming from a clinical perspective, but pass on to Frank as well.

Doug I think the as the view that.

That initially in the which was that they may be some concern about MSL generating procedures as creating higher risk transfer of viral particles.

But the data in support of that fund liberalization.

His is actually not that strong and in fact in several parts of the world and in several states in the US it's acknowledge that Nebulization does not gerrick generates aerosolized particles from from patients because the nebulizer is outside the patients Nebulization occurs in the cup and that liberation of.

Uh huh.

Articles of molecules is actually of medicine that none of.

Patient derived infected particles and that's in contrast to other procedures like dental procedures or incubation. The next election, which carry a much higher risk having said that I think we've been able to supports the broad community of understanding and suggesting that certain cushion should be applied including the way.

We're in a in in a negative accessing Frank.

Yes.

No that's exactly right we're.

You use the we environment out there with respect to this issue is very heterogeneous.

It is less conservative now than it was at the beginning of pandemic. When I believe most health care providers were would admit they were caught a little bit flat footed about what to do with these since then they have they studied the patients they put local guidelines in place and they run the the spectrum from.

Some patients that are restricted nebulized patients to certain parts of the hospital.

To just.

Using nebulization with appropriate negative pressure rooms, plus PPD and those sorts of things. So so again, it's it's it's opening up more than it was a pandemic. It's it's very difficult to say what percentage of effect.

Okay, great. Thank you so much that's very helpful.

Our next question comes from the ground Perot hit with Morgan Stanley.

Hi, Thanks for taking the question.

So the one on the TD 80, 236 data that we are expecting by the end of the year. So for both of those studies.

Well it for the asthma study as well as for the luck Allergen Challenge study just wanted to see if you could talk a bit more about what we can expect to learn but those readouts, how you're thinking about the bar for success. There and then assuming both of those read outs are positive what the next step is going to be for each of those programs.

Brett you want to take that and then sort of also.

Put it in the framework of.

Chronic inflammation versus acute inflammation.

Confidence of a JAK inhibitor.

Et cetera, So Joe Thank you Rick and the victim. Thanks for the question so just to take and each of these two studies.

In succession, you may recall that we previously running a caught me of the.

Multiple ascending dose study in fact that was not in healthy volunteers that have been done a milder snapfix and then that portion of this study we were able to demonstrate an engagement of biology and Weve reported previously that we were able to see.

Improvements in the levels of nitric oxide that breaks held by those patients nitric oxide is a good marker of inflammation in the lung and it's very easily measured through commercially available.

Bonuses.

To look at Ics hails nitric oxide. So we previously lifting mother asthmatics and seen.

Evidence of dose dependent improvements leading to the moderate to severe asthmatics that remains they are really important endpoint for it. So we will continue to look at nitric oxide as a measure of the underlying inflammation in the month and you should expect to see some.

Similar sorts of information presented.

So we didn't know yet whether that does dependency will be maintained but we do know that moderate to severe patients have higher levels of nitric oxide to begin with if they're not well controlled and our ability to detect the change is even greater than it is in modest medix because of the high end magnitudes of and that they come in so that'll be a case.

10 minutes. We are also looking at some lung specific biomarkers, including inpatient see consented.

Biopsy results, which we'll look at a fluid in the lung and particular cell types that can be reached three bronchoscopy again to look at.

Engagement to the Banerji.

This is not an efficacy study, but a little bit like we previously reported with 14 73, it'll be a collection of Biomarkers, which give us confidence around the biology.

The other important thing that will collect in that study is the blood PK and as you will recall from our previous programs. The reason we collect that is to look for the absence or minimum no exposure of the drug in the floods are organ selected the purchase designed specifically to target the lung in a highly selective.

And so really minimize on the amounts of drug at a found in the blood so that'll be an important.

Ethic of we'll look at as well.

Turning briefly to the lung Allergen Challenge study. This is also done in aesthetics.

These patients develop a very characteristic response to it to intelligent that they inhaled.

They are allergic to effective made stimulate so provokes a an exacerbation liked response in these patients under control conditions and the absence of any treatments patients having an acute response.

The causes a reduction in lung function.

Obviously after about two hours, even in the absence of treatments they rebounds that they get a secondary dip in lung function about full run as Lisa the recent pull that is that quotas, though and other circulating.

Endogenous.

Molecules of stimulated to react to the.

Initial insults, but it's the secondary failure, which is so important and in fact, what is useful in treating patients with anti inflammatories.

So what are we looking forward, we're looking to a blades that second response, it's called the latest Allergan.

Response, the L.A. off.

And there are benchmarks that are useful in assessing including inhaled corticosteroids, we're looking to see inhaled corticosteroid like ablation of the layoff in this allergen challenge study.

It's useful to know that there are other mechanisms that are being tested in setting, including biologics, including depending on for example, and there are also nonsteroidal therapies like Montelukast Assembly to try and antagonists that have also been says and evaluating this model. They all predict how these therapies are likely to.

Respond when it comes to reducing exacerbations in lunch in them that patients. So again, it's an early methodological study that we should be.

As I said, we're reporting by the end of this year, we'll be looking to see whether we can achieve steroids like ablation of the Elena.

Our next question just one more thing.

Just breadth could you can you just consolidate for people both the take the possible takeaways from both looking at the combined data set of the one see as well as the phase two long allergen challenge Acos, yet so really I think what we are hoping to be able to see here is that in moderate to severe aesthetics.

We see an attenuation in the inflammation.

In those patients that'll come from the pot Ssi data.

I will also be looking at the lay off to provide confidence that if the patients were to have an insult like an exacerbation that they would be protected from that both of those datasets are going to be important in predicting our confidence that's progressing to the next phase of development and spectrum you asked about that's mainly based on that.

Confidence we drove from these two studies, we would be looking to engage regulations to design and then implements a larger phase two program and ultimately a phase three program that would evaluate the ability of this therapy.

To protect against exacerbations in patients with moderate to severe asthma asinine bear in mind that as a proportion of patients with S&P did not responds to inhaled corticosteroids and that's an important group for us because those patients really have no tentative, but to go into biologics and even in the biologics space.

There's a proportionate and then the will not respond because the biologics at the management, particularly targeting is going to filyk disease, a JAK inhibitor that could target that isn't a for like and neutrophilic disease, and so that'll be an important aspect for us in terms of our end differentiation.

And our next question comes from Alan Carr with Needham and company. Your line is open.

Thanks for taking my questions actually follow up on the last one Brent what sort of.

Percent reduction DSD was steroids in that.

Fleet late Phase and then also I missed the beginning of your call. So are there any updates with respect to somebody.

Earlier stage programs like 52 to four timing for bringing any other new.

Candidates into clinic. Thanks.

Thanks, Alan and I'll ask.

Rick to comment on the earliest stage programs, obviously, we covered on that but let me answer your first question.

With steroids in the allergen challenge studying we've seen attenuation of the latest medic response between 30 and 50%. So that's a that's an impressive improvements.

The sort of range that Sydney, we we would be expecting to look at what's interesting is that if you look at the drugs like Montelukast, which hasn't shown protection in Lancia Exacerbation studies, it's attenuation of the layout of the latest medic response is much lower any 15% to 20%.

So that's an important.

Differentiator, it's these 30% to 50% improvements as really a more meaningful any data what with hiring of study.

We passed on to Rick just to speak too early stage pipeline.

On the early stage programs. Obviously, if you would go back to the set of programs that we outlined that at or and the R&D day.

About a little over a year and a half ago 80, 236 as going into the clinic now instead of phase two setting.

No I know three was the next one up that's also going through phase one is down into phase two setting.

And the next program up likely to go into phase one is or Nebulized.

Five inhibitor targeted at idiopathic pulmonary fibrosis, and perhaps other conditions on the low. So that's probably the next went up I think it's likely that we get into the clinic this year with the Hilda five inhibitor.

And we'll be progressing from from there.

Great. Thanks for taking my questions.

Our next question comes from Douglas out with H.C. Wainwright. Your line is now open.

Hi, good afternoon. Thanks to the follow up just in terms of 80 to 80 380 236, Brett in terms of the next stage you mentioned it takes you into phase three would you be interested in sort of trying to pursue some kind of adaptive design. So that that next study could ultimately prove to be a registration study or is that one where you.

I want to see the results from the ongoing study to see if you need to sort of go through a more traditional phase two before moving into registration.

Great question, Thanks, Doug and I think.

Hopefully on track record as demonstrated that 70 within Theravance, we really opened two.

Creative ways of thinking about accelerating development.

Whether it's from a.

Phase one study directly into phase two as we've done with.

14, 73 in the case to them Coloccini moving from a single dose study into a phase three program. So I think we.

Certainly demonstrated in the past the ability to accelerate development, but we need to the adaptive design is an attractive proposition, particularly looking at exacerbation rates I think the key issue will be how strong the day series and then of course, our interactions with regulators. Once we have data in hand, we'll be able to take that.

To a key decision makers, including at FDA to be able to negotiate a program that both we and they are comfortable with two assesses.

Great question.

Okay, great. Thank you so much.

Thank you. It appears we have no further questions on the phone I'd now like to turn the conference back to Mr. winning him. Please go ahead Sir.

I'd like to thank everyone for joining us today. Thank you for your questions look forward to updating you as we progress through the rest of the year.

Please stay safe and again, thank you have good day.

This concludes today's conference call. We thank you for your participation you may now disconnect.

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