Q3 2020 Theravance Biopharma Inc Earnings Call

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Yeah R. Six winningham, Chief Executive Officer, followed by Frank past Kulon cheap commercial operations Officer, Brown, Hellman, Chief Medical Officer, and Andrew Hyman Chief Financial Officer.

Following our prepared remarks, we will open the call to questions.

Now I don't have no call to wreck for opening remarks.

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

That is maddox.

Phase one parts C study demonstrated significant reductions in fino piece that one piece that sex biomarker, even though these patients were already on inhaled corticosteroids. However, the lung allergen Challenge study 80, 236 did not meet the primary endpoint.

With their advanced Biopharma. The team has risen to every challenge presented by COVID-19, with innovation and safety always at the forefront for themselves the health care professional and the patient.

Let's move to slide six.

<unk> July 2020 remain positive, including Ikea via retail data and the durable medical equipment market segment. You pottery achieved is 17.4% sure of the long acting nebulize market up from 16% in April 2020.

Like N O H.

We worked with the U S. F D. A to decentralize are ongoing trials to allow this fragile patient population to participate in the program without travelling to the clinic.

Like mine, we're pleased to report that 80, 236 performed well in part C.

Not only did we see a favorable safety and tolerability profile and very low levels of 80 236 in the blood after dosing 1500 micrograms fire inhaler for seven days.

The latest medic response compared to placebo in patients who were dosed for 14 days prior to the LNG challenge.

Moving to slide 11.

It is new color.

As in other countries around the world.

The September 9th FDA approval GSK immediately initiated commercial activities to support the U S launch of this additional indication.

Also as a reminder.

Thereby biopharma received an upward carrying royalties on global net sales of trilogy.

Updated 2020 financial guidance, we are modifying our full year 2020 operating loss, excluding share based compensation to a range of $225 million to $235 million compared to our previous range of two of five to 225.

This increase in the top end of the range is due predominantly to the acceleration of TD own I know three.

Into the clinic.

And as a reminder, our operating loss guidance does not include royalty income for trilogy, which we recognize in our statement of operations as income from investments in Trc LLC.

Nor does our guidance include benefits from potential future business development activities.

Finally, our guidance could change due to factors such as the timing and cost of clinical development programs.

Ongoing cobot, 19 risks and challenges or other operating factors that could impact our full year 2020 financial results.

With that I will turn the call back to Rick for closing remarks.

Thanks, Andrew.

Im Syncera license certainly appreciate the work of the Theravance Biopharma team and what they've been able to deliver.

The webcast. Please mute audio on your web cast device before essay question over the phone. If you are using a speaker phone for today's call. Please make sure. Your mute function is turned off to allow your signal to register.

In order to ask a question and we'll pause for just a moment to compile our roster.

We'll have our first question from the line of Marc Frahm with Cowen.

Hi, guys. Thanks for taking my questions.

First just to start off with the PD 14 73.

Refinement of when that data would come can you just talk about what assumptions are built into getting to that Q3 data release and your hasn't been increase go get impacted in the last few months that since the last earnings call. When you thought things would recover.

Thanks, Mark I'll make a couple of comments.

Shifting over to Brett I think that you know over the next over the last few months. We've had we've seen significant sort of continuation of an up tick in and they use C study as well as the as well as the Ccrone study Weve our teams have gotten much more agile.

I believe in handling challenges.

Challenges that cold and may pose in any given site around the world, but I think it's it's the combination of the progress to date, a that plus the ability to handle the challenges that the cobot for provides on a site by site basis that gave rise to the to the guidance of the.

The third quarter and again, we'd expect those to be two separate two separate releases, but Brett you want to add to that.

Okay.

And there are some challenges that have been presented with covid or by Covid in terms of getting the appropriate people to the sites to monitor the uhm. The studies, we aren't dealing with that specifically, we want to make sure that with emphasizing the quality of the data as we clean those final patients and so that's also incorporated into those timelines that lead.

The third quarter predictions.

Okay.

Thanks for that with details <unk>, maybe an 80 236 <unk> you're spending some other Joseph I believe in and trials Tonight as well did you see it goes response on fino.

Cross those other doses and then maybe can you speak to the weight.

Weight of evidence of.

Of longer term out you know success on longer term trials on things like exacerbations for fino versus the Lar within this right.

<unk> do you want to check up on strike. So Mark you us about other doses you may recall it in the pot be of the study we looked at a range of doses from 150 micrograms, all the way up to 4000 micrograms in mildest mesic season, most patients with hugely LOV.

Two levels to begin with but we did see evidence of some dos dependency. The 150 microgram. This did not produce much aberration in nitric oxide those levels remained high in those patients that as we pushed two doses above 150 micrograms, we began to see improvements and they were actually very little difference between the.

The 1500, and the 4000 micrograms, which led us to the selection of doses.

We took.

So we have seen some does dependency and in fact, you see again in the study.

Study and the <unk> allergen challenge that the 150 microgram dose doesn't produce any changes in nitric oxide, whereas the 1500 micrograms. Those does so I think that's reproducibility. He gives us some confidence that we are engaging in biology, we just not having the effect on the latest medical response.

In terms of weight of evidence it is dependent on the mechanism as to whether nitric oxide or L. A R is predictive of protecting against exacerbations in the long term as I mentioned Mccullough as an example doesn't modify expression of the L. A R. But actually has been approved for reducing access.

The patients and moderate to severe asthmatics and there were other therapies.

Just before Brett does I'd say that this is the first JAK inhibitor inhaled JAK inhibitor. That's been in this type of study.

And when you look across the range of mechanisms that have been evaluated in this type of study.

You see the relative to LTAC, you see a range of outcome something like an anti TNS LP antibody.

Not showing much of an effect at 42 days into it and that Lonely Allergen Challenge study, but at 84 days showing a significant effect. So theres a number of different things probably going on here.

Part of it might be dose, but I think theres other parameters Brett.

Thanks, Ray can absolutely I agree they lack of precedence in this space.

Something that we were aware of and coming into the Atlantic Basin challenged the threshold idea is a very interesting one and obviously that's something that we are considering.

I think it would be premature for us to speculate on exactly what the root causes right now because they are continuing to assimilate the days that we've got and additional data coming through thinking from a moderate to severe asthmatics cytokine data the gene expression data and I think that will give us a sense of modulation across a range of other parameters.

So this isn't going to be diving into that and we do expect to report on that data and we haven't given exact timings for that but you said you didn't want to put this out in the public domain probably through.

Scientific Congress in the course of next year.

Great look forward to it thanks guys.

Hello.

Your next question comes from line of Vikram PURA when Morgan Stanley.

Hi, Thanks for taking my question.

I had a question on the.

Our royalty dispute on trilogy look the royalties with Innoviva could you just walk us through the nature of the current dispute and also talk about.

What might be the central issue to be discussed during the arbitration proceeding that your release mentions is scheduled for the first quarter was 21.

Sure yes. Thanks, Thanks for the question the up.

The dispute as we outlined it did take a June.

Early June 8-K.

I had to do with a.

Plan to invest in and two private companies with funds from the LLC, We said at that time.

In June we based on the plans that were laid out we might.

Dispute that and the dispute mechanism in the LLC.

Really as arbitration now also in the LLC agreement.

They are high low there's high levels of confidentiality.

Study in the clinical sites and also you know the ongoing work both decentralisation other work that we're doing with the site <unk> any other comments on that.

Just to expand on that you have you been really I'm thoroughly pleased with the response to that investigators have we filled initially might be a bit sort of resistance to ideas of taking those patients out of the clinics, but the opposite has been true we've actually had investigated Israeli embraces uhm the protocols now with.

<unk> and how they can choose to see that patients at the clinic or at home Uhm, what people say realized is that they're able to access them.

M. A type of patients who probably was not previously willing to come into the clinic to participate in a clinical trial. So we think it's actually improving not any of the ability of the site to perform but it's also increasing our ability to access patient. So we would not otherwise have been cruising. So we do think that this is some really value added and we've been very pleased with the.

A response about clinical from units.

Okay got it thanks for that.

Your next question comes from the line of decorate sow what <unk> Wainwright.

Hi, good I can't even thanks for taking my question. It's just you know maybe 80 236.

<unk> that'd be disappointing that we didn't see an effect L. A R study, but obviously be a second <unk> and F. U N hours, it's been pretty consistent I'm pretty strong. So just have you have clarify sort of Howard you're thinking about the path for work you know in terms of the milestones are sort of additional work that we can do because.

Obviously, you know I don't think the L. A R is necessarily you know a gating item for approval right. You know it certainly seems like there's potentially a path for it for the asset it's or just clarity on that would be helpful.

Yeah dog. Thanks, I think you know we've got those Bretton had mentioned, we've got a a lot of data.

Left to analyze particularly out of the of the phase one see patient.

Moderate to severe patient cohort, which is target primary target of course of the of the medicine. So we'll be doing will be doing that over the next couple of months. So I think it's important to understand that you know we've got 80 236 that we've just finished up with the with the one see in the L. A.

<unk> and on the other hand, we've got a large study that's that's ongoing with a nebulizer back inhibitor in a hyper inflammatory state in the long it and I think both both sets of data are going to provide really a rich <unk>.

Of information on the use of Jack inhibitors, an inflammatory states because you know of course will will and something like nine O. Three you know, we'll be looking at blood side of kind of levels biomarkers for for inflammation of it contribute to lung injury and we knew.

No today that the high Prince Laboratory state associated with Covid. It was associated with elevated Sarah markers of of interferon as well as a cascade of it or Lou caused lukens that it came a kinds that drive ally. So I think when you look at the very large set of information from.

The one see to the L. A R to the to the hyper and <unk> inflammation state that we're treating covid, there's gonna be a rich set of data to evaluate that will will guide us on the next steps for for 80 236, and then also obviously for nine O three.

It into Rick would it be fair to say that perhaps by the time you report <unk> earnings next year, you might have a little bit more of a roadmap for 80 236 as well as nine 300, I think yeah. I think we said that we would be reporting that phase to date of nine O three.

In the second quarter and depending on the timing of the earnings call <unk>. We will have we should've finished all of the evaluation of the other biomarkers in the in the study phase one C study as well as the gene expression data so I.

Think we'll have a much better understanding of this you know how the effects of the Jack inhibitors in a long breath, you want to add anything.

Typically is gonna be really going on external expertise as well you know we've been got a panel of experts accidentally who can help us interpret other mechanisms as well as this one and it's a plan to incorporate their thinking until I'm planning as well so not much how sad beyond that yeah. I think it was just the you know.

Very exciting time for us because you know where this is the hail Jack and have it or you know hasn't been in <unk> and humans administered to humans to treat inflammation in the information that we're we're gaining is really the first set of information that people have been able to obtain.

And therefore, I think it really puts us on the cutting edge of how to use a tool like a jack inhibitor in inflammatory states with a lump.

Oh absolutely.

Thank you so much for the for the additional information.

Yep.

Our next question comes from the line of Alencar, when need them and Crawford and company.

Hi, Thanks for taking my questions just to follow on this well that more bright what.

Where do you think you'd need to see out of the biomarker data in gene expression data is it.

He's convince you that <unk>.

More work you know that it in another phase too would be would be appropriate here.

Brett you Wanna take that.

<unk> Hi, Ellen I, you know I think for me and decided kind data will be particularly important we expected to see downregulation of T cytokines that might be implicated in the inflammatory cascade. The milieu that these uhm moderate to severe.

Medics have the limitations with the allergen challenge study is that it's not in that population, it's an amount of the population.

What's there to think of me trying to do is to blend a very abnormal insults in the lung these patients inhaled huge amounts with allergen and suddenly get the himself in the lung it's.

Although it's experimental it's not quite how it works in the real world with them moderate to severe so we do want to look at the but the gene expression data in particular decided kinds in these muggeridge since it is to see whether we downregulation. The the expression of those those mediators bear in mind, we're treating precisely longer 14 days in the end.

As in challenge, but still be insulted much hotter uhm I think even after seven days in the moderate to severe group and policy, we should be able to untangle. Some of these pathways with a bit more detail.

And then what.

With respect to Ya Covid trial.

I guess, maybe a similar question there what what what.

What are you hoping to see from that in the second quarter and it would justify.

More development, there and thinking in the context of other programs competitive programs.

Well again, I'd say that the Covid study as a proxy for an acute type treaty on a cute hyperinflate amatory state of alone.

And while.

You know this is where we're using the Sars Kobe to infection, you know to affectively I'd identify the patience with the accusing appointment for inflammatory state.

<unk> <unk> <unk> similar states occur in a number of different different acute disease. So I think you know our ability to to really improve things like.

You know improving oxygen reduction reduction in hospital stay prevention of progression into mechanical ventilation and then the exploratory data set blood cytokine levels and biomarkers of of inflammation in lung injury will also be very important.

And providing us a picture of what this what nine O. Three can do in this sort of a condition.

Brown.

To what records, saying Ellen with Uhm we're.

We're encouraged by the signals that have already been reported with a bar sitting in for example is a Jack inhibited that's being used in COVID-19, and be nice study that recently reported in one of the a C. C. T studies show the additional uhm in prison in terms of time to recovery and discharged from hospital Windburn assistant was added to <unk>.

<unk>, so over and above the benefits that room dissident was demonstrating a sudden it seems to have done more and that's encouraging for the mechanism. We actually think that window nine O. Three we'll get much higher concentrations of drug in the lung relative to an <unk>. So we think that the opportunity.

<unk> <unk> <unk> <unk>, it's source of origin. That's the that's the pulmonary lightning is effectively with a sided cytokines storm has triggered we think that that should bode well for an honest raise efficacy and then recognizing the bar system is an oral therapy with systemic.

It's six.

We don't believe that will run that risk with that <unk>, We don't think we'll see the.

Risk of opportunistic infections that by assistant would have or indeed, the predisposition to thrombosis, which we noted systemic Jack can images have that's particularly important in COVID-19, because the disease itself appears to increase calculation state so being able to targets the lung within Hogan selective approach.

The lens selective approach is something we rarely quite enthusiastic about we think that this has got uhm real potential in COVID-19.

Thanks for taking my questions.

Thank you. It appears we have no further.

Questions on the phone I know I'd like to turn the conference back to Mister Winningham. Please go ahead Sir.

Okay. Thank you operator, thanks, everyone for participating stay safe and stay healthy and have a great day.

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

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