Q2 2025 Theravance Biopharma Inc Earnings Call

Rhonda Farnum: Ladies and gentlemen, good afternoon. I'd like to welcome everyone to the Theravance Biopharma second quarter 2025 conference call. During the presentation, all participants will be in a listen-only mode. The question and answer session will follow the company's formal remarks. To ask a question, press star one-one on your telephone. If listening via webcast, please mute audio on your webcast device before asking a question over the phone. I will repeat these instructions after management completes their prepared remarks. Also, today's conference is being recorded. And now I would like to turn the call over to Rick Winningham, Chief Executive Officer. Please go ahead, sir.

Speaker #2: Ladies and gentlemen, good afternoon. I'd like to welcome everyone to the Theravance Biopharma second quarter 2025 conference call. During the presentation, all participants will be in a listen-only mode.

Speaker #2: A question and answer session will follow the company's formal remarks. To ask a question, press star 11 on your telephone. If listening via webcast, please mute audio on your webcast device before asking a question over the phone.

Speaker #2: I will repeat these instructions after management completes their prepared remarks. Also, today's conference is being recorded. And now, I would like to turn the call over to Rick Winningham, Chief Executive Officer.

Speaker #2: Please go ahead, sir.

Rick Winningham: Good afternoon and welcome to Theravance Biopharma's second quarter 2025 earnings results conference call. On slide two, you'll find our forward-looking statements disclaimer, which covers certain risk factors which could cause actual results to differ materially from any such statements we might make in today's call and which are described further in our filings with the SEC. Moving to slide three, I'm joined today by Rhonda Farnum, Chief Business Officer, Aine Miller, Head of Development, and Aziz Sawaf, Chief Financial Officer. And turning to slide four, we delivered an excellent quarter underscored by disciplined execution across our commercial and development organizations, which drove continued momentum in both UPELRI and AMPRELOX's team. In addition, we completed a high-impact strategic transaction. This performance reflects a team that sharply focused on delivering value to our stakeholders. Starting with our commercial business, UPELRI, our durable cash-generating product, continues to perform.

Speaker #3: Good afternoon, and welcome to Theravance Biopharma's second quarter 2025 earnings results conference call. On slide two, you'll find our forward-looking statements disclaimer. Which covers certain risk factors, which could cause actual results to differ materially from any such statements we might make in today's call.

Speaker #3: And which are described further in our filings with the SEC. Moving to slide three, I'm joined today by Rhonda Farnum, Chief Business Officer, Aine Miller, Head of Development, and Aziz Sawaf, Chief Financial Officer.

Speaker #3: And turning to slide four, we delivered an excellent quarter, underscored by disciplined execution, across our commercial and development organizations, which drove continued momentum in both Upelry and Amperloxetine.

Speaker #3: In addition, we completed a high-impact strategic transaction. This performance reflects a team that sharply focused on delivering value to our stakeholders. Starting with our commercial business, Upelry, our durable cash-generating product, continues to perform.

Rick Winningham: Net sales for the quarter reached approximately $66 million, driven by continued demand growth and favorable net pricing, with strong pull-through performance in the hospital channel. In addition, UPELRI received approval in China, triggering a $7.5 million milestone payment. We also completed the $225 million sale of our remaining royalty interest in Trilogy to GSK, a transaction that significantly strengthens our balance sheet and represents the first major outcome from our strategic review committee's efforts to unlock shareholder value. Trilogy's strong second quarter performance further increased the likelihood that we will receive the remaining $150 million in milestones from Royalty Pharma over the next 18 months. And turning to AMPRELOX's team, I'm pleased to report that the Phase Three Cypress trial continues to progress well, designed specifically to replicate the Study 170 MSA pre-specified subgroup.

Speaker #3: Net sales for the quarter reached approximately $66,000,000, driven by continued demand growth and favorable net pricing, with strong pull-through performance in the hospital channel.

Speaker #3: In addition, Upelry received approval in China, triggering a seven and a half million dollar milestone payment. We also completed the $225,000,000 sale of our remaining royalty interest in Trelogy to GSK.

Speaker #3: A transaction that significantly strengthens our balance sheet and represents the first major outcome from our strategic review committee's efforts to unlock shareholder value. Trelogy's strong second quarter performance further increased the likelihood that we will receive the remaining $150 million in milestones from royalty pharma, over the next 18 months.

Speaker #3: And turning to Amperloxetine, I'm pleased to report that the phase three cypress trial continues to progress well. Designed specifically to replicate the study 170 MSA pre-specified subgroup, cypress remains on track to complete enrollment in the open-label portion over the next couple of weeks.

Rick Winningham: Cypress remains on track to complete enrollment in the open label portion over the next couple of weeks, and we expect to report top-line data approximately six months after. The quality of execution and engagement from investigators, patients, and advocacy groups has been exceptional. Given that multiple system atrophy, or MSA, is a rare disease with no proven therapies specifically for neurogenic orthostatic hypotension, or NOH, we believe this program has the potential to bring great value to patients and shareholders. We ended the quarter with approximately $340 million in cash and no debt. Our operations remain near cash neutral. Theravance has a clear and compelling profile, a strong balance sheet enhanced by visibility into significant near-term milestone payments, a growing profitable commercial asset, and on top of that, the potential for a transformative near-term catalyst based on the Cypress data readout.

Speaker #3: And we expect to report top-line data approximately six months after. The quality of execution and engagement from investigators, patients, and advocacy groups has been exceptional.

Speaker #3: Given that multiple system atrophy or MSA is a rare disease with no proven therapies, specifically for neurogenic orthostatic hypotension, or NOH, we believe this program has the potential to bring great value to patients and shareholders.

Speaker #3: We ended the quarter with approximately 340 million dollars in cash and no debt. Our operations remain near cash neutral. Theravance has a clear and compelling profile.

Speaker #3: A strong balance sheet enhanced by visibility into significant near-term milestone payments, a growing profitable commercial asset, and on top of that, the potential for a transformative near-term catalyst based on the cypress data readout.

Rick Winningham: We enter the second half of 2025 with clear momentum and look forward to completing enrollment in Cypress and sharing top-line data. We're in a strong financial position, and together with the strategic review committee, we continue to evaluate a range of opportunities to enhance shareholder value and remain committed to capital discipline and returning excess capital. And with that, I'll turn the call over to Rhonda to provide additional detail on UPELRI's performance.

Speaker #3: We enter the second half of 2025 with clear momentum, and look forward to completing enrollment in cypress and sharing top-line data. We're in a strong financial position, and together with the strategic review committee, we continue to evaluate a range of opportunities to enhance shareholder value and remain committed to capital discipline and returning excess capital.

Speaker #3: And with that, I'll turn the call over to Rhonda to provide additional detail on Upelry's performance.

Rhonda Farnum: Thanks, Rick. If you turn to slide six, you'll see that the Theravance-ViaTrust commercial partnership delivered another strong quarter of UPELRI performance. Second quarter net sales increased 22% year over year to $66.3 million, our highest Q2 result since launch. That growth was driven by three key elements. First, solid demand growth, up 4% versus Q2 of 2024 and 5% sequentially from Q1 of 2025. Second, continued net price improvement supported by pricing discipline and a favorable channel mix. And third, a one-time favorable adjustment to net pricing in the quarter. It's worth noting that even without the non-recurring pricing benefit, we would have still delivered a mid-team year-over-year net sales growth in Q2, underscoring the product's strong and sustained growth trajectory. Importantly, these results increase our confidence in achieving the $250 million calendar year sales threshold required to trigger a $25 million milestone payment.

Speaker #4: Thanks, Rick. If you turn to slide six, you'll see that the Theravance ViaTress commercial partnership delivered another strong quarter of Upelry performance. Second quarter net sales increased 22% year over year to $66.3 million, our highest Q2 results since launch.

Speaker #4: That growth was driven by three key elements. First, solid demand growth of 4% versus Q2 of 2024, and 5% sequentially from Q1 of 2025.

Speaker #4: Second, continued net price improvement, supported by pricing discipline and a favorable channel mix. And third, a one-time favorable adjustment to net pricing in the quarter.

Speaker #4: It's worth noting that even without the non-recurring pricing benefit, we would have still delivered a mid-team year over year net sales growth in Q2, underscoring the product's strong and sustained growth trajectory.

Speaker #4: Importantly, these results increase our confidence in achieving the $250 million calendar year sales threshold required to trigger a $25 million milestone payment. Turning to slide seven, in addition to the strong net sales growth in the quarter, Upelry continued to experience expanding profit margins and strong momentum across both hospital and community outpatient channels.

Rhonda Farnum: Turning to slide seven, in addition to the strong net sales growth in the quarter, UPELRI continued to experience expanding profit margins and strong momentum across both hospital and community outpatient channels. The hospital channel remains a critical differentiator and a key driver of prescribing for the brand. Notably, hospital volume increased 31% versus Q2 of 2024, reflecting our team's sustained success in securing formulary wins and implementing therapeutic interchange protocols. In Q2, UPELRI's long-acting nebulized market share in the hospital reached a new launch-to-date high of approximately 20%. Hospital performance continues to serve as a foundational component of our strategy, functioning as a key entry point for transitioning patients to community outpatient maintenance therapy care. I would also like to call attention to the recent approval of UPELRI by China's National Medical Products Administration in June.

Speaker #4: The hospital channel remains a critical differentiator and a key driver of prescribing for the brand. Notably, hospital volume increased 31% versus Q2 of 2024, reflecting our team's sustained success in securing formulary wins and implementing therapeutic interchange protocols.

Speaker #4: In Q2, Upelry's long-acting nebulized market share in the hospital reached a new launch to date high of approximately 20%. Hospital performance continues to serve as a foundational component of our strategy functioning as a key entry point for transitioning patients to community outpatient maintenance therapy care.

Speaker #4: I would also like to call attention to the recent approval of Upelry by China's National Medical Products Administration, in June. The approval triggered a $7.5 million milestone payment and, importantly, ViaTress ress will lead launch and commercialization efforts, meaning Theravance will incur no commercial cost.

Rhonda Farnum: The approval triggered a $7.5 million milestone payment, and importantly, ViaTrust will lead launch and commercialization efforts, meaning Theravance will incur no commercial cost. Given the recent approval and that ViaTrust is still finalizing the commercialization plan, we will not be providing guidance on formal launch timing at this stage. We'll share additional updates in future calls as ViaTrust's plans continue to take shape. Looking ahead, market research continues to point to a sizable, remain addressable patient population in the US. Our aligned strategies with ViaTrust, promoting concomitant use with nebulized LAVAs and converting appropriate handheld patients, are gaining traction. Enhancements in fulfillment, adherence, and persistency further reinforce UPELRI's durable growth profile.

Speaker #4: Given the recent approval and that ViaTress is still finalizing the commercialization plan, we will not be providing guidance on formal launch timing at this stage.

Speaker #4: We'll share additional updates in future calls as ViaTress's plans continue to take shape. Looking ahead, market research continues to point to a sizable remaining addressable patient population in the US.

Speaker #4: Our aligned strategies with ViaTress, promoting concomitant use with nebulized lavas, and converting appropriate handheld patients are gaining traction. Enhancements and fulfillment adherence and persistency further reinforce Upelry's durable growth profile.

Rhonda Farnum: With the prospect of a $25 million near-term US sales milestone for achieving $250 million in calendar year net sales and patent protection into 2039, we believe UPELRI is well positioned to deliver long-term sustainable value for Theravance and our shareholders. With that, I'll turn the call over to Aine to provide an update on the AMPRELOX team development program. Aine.

Speaker #4: With the prospect of a $25 million near-term US sales milestone for achieving $250 million in calendar year net sales, and patent protection into 2039, we believe Upelry is well positioned to deliver long-term sustainable value for Theravance and our shareholders.

Speaker #4: With that, I'll turn the call over to Ane to provide an update on the Amperloxetine development program. Ane?

Aine Miller: Thanks, Rhonda. Let me begin with an update on the Cypress Phase Three study. We are now very close to completing enrollment. With strong traction across our study sites over the last quarter, we are wrapping up screening activities and will close enrollment to the open label portion of the study in the next couple of weeks. This milestone will mark a pivotal moment in our development program, and we are incredibly encouraged by the high-quality execution that has brought us here. As we approach the end of enrollment, we are energized by the momentum we have built and are optimistic about the potential of this trial to deliver a meaningful outcome for patients with multiple systems atrophy or MSA. This optimism is rooted in two core strengths. Firstly, the precision of AMPRELOX's mechanism of action, and secondly, how we have designed and are executing this study.

Speaker #5: Thanks, Rhonda. Let me begin with an update on the cypress phase three study. We are now very close to completing enrollment. With strong traction across our study sites over the last quarter, we are wrapping up screening activities and will close enrollment to the open-label portion of the study in the next couple of weeks.

Speaker #5: This milestone will mark a pivotal moment in our development program, and we are incredibly encouraged by the high-quality execution that has brought us here.

Speaker #5: As we approach the end of enrollment, we are energized by the momentum we have built and are optimistic about the potential of this trial to deliver a meaningful outcome for patients with multiple systems atrophy or MSA.

Speaker #5: This optimism is rooted in two core strengths. Firstly, the precision of Amperloxetine's mechanism of action, and secondly, how we have designed and are executing this study.

Aine Miller: Moving to slide nine, I want to remind you why we believe this molecule is particularly well matched to the pathophysiology observed in patients with MSA who experience neurogenic orthostatic hypotension or NOH. Generally, these patients with autonomic dysfunction have a distinct profile. While their central autonomic pathways are impaired, their peripheral neurons remain relatively intact. AMPRELOX is a highly selective norepinephrine reuptake inhibitor designed to increase synaptic norepinephrine concentrations. By leveraging preserved peripheral sympathetic function, it is intended to enhance vasoconstriction, improve blood pressure, and alleviate symptoms of NOH. This tailored mechanism has been supported in our previous trials. In the pre-specified MSA subgroup analysis from our earlier Redwood study, also known as Study 170, patients on AMPRELOX demonstrated durable improvements in symptom burden and daily function. While those withdrawn to placebo experienced a clear loss of benefit, including a drop in standing blood pressure and worsening of symptoms.

Speaker #5: Moving to slide nine, I want to remind you why we believe this molecule is particularly well matched to the pathophysiology observed in patients with MSA, who experience Neurogenic Orthostatic Hypotension or NOH.

Speaker #5: Generally, these patients with autonomic dysfunction have a distinct profile. While their central autonomic pathways are impaired, their peripheral neurons remain relatively intact. Amperloxetine is a highly selective neuroepinephrine reuptake inhibitor designed to increase synaptic neuroepinephrine concentrations.

Speaker #5: By leveraging preserved peripherals, sympathetic function, it is intended to enhance vasoconstriction, improve blood pressure, and alleviate symptoms of NOH. This tailored mechanism has been supported in our previous trials.

Speaker #5: In the pre-specified MSA subgroup analysis from our earlier Redwood study, also known as study 170, patients on Amperloxetine demonstrated durable improvements in symptom burden and daily function.

Speaker #5: While those withdrawn to placebo experienced a clear loss of benefit, including a drop in standing blood pressure and worsening of symptoms. Importantly, Amperloxetine was not associated with worsening of supine hypotension, potentially a key differentiator versus existing therapies.

Aine Miller: Importantly, AMPRELOX was not associated with worsening of supine hypertension, potentially a key differentiator versus existing therapies, thanks to its targeted and physiologically attuned mechanism. Moving now to slide ten, Cypress was designed in collaboration with FDA to confirm the benefits observed in Study 170 in a larger population of patients with MSA. Like Study 170, Cypress uses a randomized withdrawal design and intentionally includes an enrichment strategy, allowing us to identify patients who show clear symptom benefits during the open label phase and progress only those individuals to the critical randomized withdrawal phase. This gives us high confidence that we are measuring the drug's sustained efficacy in a population most likely to benefit and therefore optimize our ability to detect worsening of symptoms when they are taken off AMPRELOX.

Speaker #5: Thanks to its targeted and physiologically attuned mechanism. Moving now to slide ten, cypress was designed in collaboration with FDA to confirm the benefits observed in study 170 in a larger, population of patients with MSA.

Speaker #5: Like study 170, cypress uses a randomized withdrawal design and intentionally includes an enrichment strategy. Allowing us to identify patients who show clear symptom benefit during the open-label phase, and progress only those individuals to the critical randomized withdrawal phase.

Speaker #5: This gives us high confidence that we are measuring the drug's sustained efficacy in a population most likely to benefit and therefore optimize our ability to detect worsening of symptoms when they are taken off Amperloxetine.

Aine Miller: We applied key learnings from Study 170 to refine the design of Cypress while ensuring consistency in enrollment and enrichment criteria in both studies. As a result, we believe we have optimized the probability of success for the Cypress study. We also remain focused on strong and high-quality execution. We partner closely with leading MSA centers of excellence and academic institutions known for their high-touch approach to care and best equipped to manage patients through our study. Our teams have maintained an unwavering focus on ensuring we enroll the right patients at the right sites. As with Study 170, we are utilizing an external enrollment committee comprised of the same clinical neurologists to review every patient enrolled. This continuously ensures consistent application of the enrollment criteria across both studies and provides an independent review of the diagnosis of MSA.

Speaker #5: We applied key learnings from study 170 to refine the design of cypress. While ensuring consistency in enrollment and enrichment criteria in both studies. As a result, we believe we have optimized the probability of success for the cypress study.

Speaker #5: We also remain focused on strong and high-quality execution. We partner closely with leading MSA centers of excellence and academic institutions known for their high-touch approach to care, and best equipped to manage patients through our study.

Speaker #5: Our teams have maintained an unwavering focus on ensuring we enroll the right patients at the right sites. As with study 170, we are utilizing an external enrollment committee, comprised of the same clinical neurologists, to review every patient enrolled.

Speaker #5: This continuity ensures consistent application of the enrollment criteria across both studies and provides an independent review of a diagnosis of MSA. Also, by managing this study directly, we are uniquely positioned to apply real-time operational oversight and foster high levels of engagement with our sites.

Aine Miller: Also, by managing this study directly, we are uniquely positioned to apply real-time operational oversight and foster high levels of engagement with our sites. Additionally, we have taken a proactive approach to educate our sites about patient retention strategies through the randomized withdrawal period and managing variability throughout the duration of the study. Looking ahead now on slide 11, we are also executing on NDA readiness in parallel. With modules already in advanced stages of drafting, we are preparing for an expedited submission should the readout be positive. At filing, we intend to submit an application to support a full approval and also intend to request priority review to further accelerate potential approval and access. In summary, we believe Cypress is positioned well to deliver through its smart design, high-quality execution, and a mechanism of action biologically tailored to MSA.

Speaker #5: Additionally, we have taken a proactive approach to educate our sites about patient retention strategies through the randomized withdrawal period and managing variability throughout the duration of the study.

Speaker #5: Looking ahead now on slide 11, we're also executing on NDA readiness in parallel. With modules already in advanced stages of drafting, we are preparing for an expedited submission should the readout be positive.

Speaker #5: At filing, we intend to submit an application to support a full approval and also intend to request priority review to further accelerate potential approval and access.

Speaker #5: In summary, we believe cypress is positioned well to deliver. Through its smart design, high-quality execution, and a mechanism of action biologically tailored to MSA, we are advancing what we believe could be the first precision therapy in autonomic neurology for a community with high unmet need.

Aine Miller: We are advancing what we believe could be the first precision therapy in autonomic neurology for a community with high unmet need. I will now hand the call back over to Rhonda to discuss the commercial opportunity for AMPRELOX. Rhonda?

Speaker #5: I will now hand the call back over to Rhonda to discuss the commercial opportunity for Amperloxetine. Rhonda?

Rhonda Farnum: Both Rick and Aine have emphasized we're approaching a pivotal moment for Theravance as we anticipate the upcoming Cypress results. From a commercial perspective, our excitement comes not only from the potential impact of the data, but also from the substantial market opportunity with pre-launch activities already underway. We believe there is a meaningful commercial opportunity for AMPRELOX to stand apart in the space with high unmet need. Today, no approved treatments offer both meaningful efficacy and durable benefit for NOH and patients with MSA. In fact, 65% of patients remain symptomatic despite currently available treatments such as midodrine and doxycycline, which are often limited by a short duration of action, frequent dosing requirements, and box warnings for supine hypertension.

Speaker #4: Thanks. Rick and Aine have emphasized that we're approaching a pivotal moment for Theravance as we anticipate the upcoming Cypress results. From a commercial perspective, our excitement comes not only from the potential impact of the data but also from the substantial market opportunity.

Speaker #4: With pre-launch activities already underway. We believe there is a meaningful commercial opportunity for Amperloxetine to stand apart in the space with high unmet need.

Speaker #4: Today, no approved treatments offer both meaningful efficacy and durable benefit for NOH in patients with MSA. In fact, 65% of patients remain symptomatic, despite currently available treatments such as midodrine and doxydopa, which are often limited by a short duration of action and frequent dosing requirements, and box warnings for supine hypertension.

Rhonda Farnum: AMPRELOX is uniquely positioned to address these limitations, offering the potential for once-daily oral dosing, durable symptom relief, and a well-tolerated safety profile as demonstrated in the Redwood study and now being further evaluated in the ongoing Cypress study. We estimate an addressable population of approximately 40,000 patients in the US with a clear need for better options. In parallel with study completion, we're advancing key activities across stakeholder engagement, market access, and launch readiness. With focused execution across key commercial and medical work streams, we are preparing to deliver a transformational therapy for this patient community. And with that, I'll turn the call over to Aziz to walk through the financials. Aziz?

Speaker #4: Amperloxetine is uniquely positioned to address these limitations. Offering the potential for once-daily oral dosing, durable symptom relief, and a well-tolerated safety profile is demonstrated in the Redwood study and now being further evaluated in the ongoing Cypress study.

Speaker #4: We estimate an addressable population of approximately 40,000 patients in the U.S., with a clear need for better options. In parallel with study completion, we're advancing key activities across stakeholder engagement, market access, and launch readiness.

Speaker #4: With focused execution across key commercial and medical work streams, we are preparing to deliver a transformational therapy for this patient community. And with that, I'll turn the call over to Aziz.

Speaker #4: To walk through the financials. Aziz?

Aziz Sawaf: Thanks, Rhonda. Starting on slide 14, I'll begin with an update on our Trilogy milestones. With GSK delivering another strong quarter, our outlook on achieving these milestones is stronger than ever. In Q2, GSK reported an all-time high of $1.1 billion in sales, exceeding consensus and bringing year-to-date sales to approximately $2 billion, an 8% increase year over year. This performance puts us firmly on track to exceed the $3.4 billion annual sales threshold in 2025, which would trigger a $50 million milestone payment. With the brand's annualized run rate now above $4 billion, we remain confident in achieving this milestone, as well as the additional $100 million milestone in 2026, where $3.5 billion in annual sales is required. In total, that represents $150 million in high-probability milestones over the next 18 months, further strengthening our financial profile.

Speaker #6: Thanks, Rhonda. Starting on slide 14, I'll begin with an update on our Trelogy milestones. With GSK delivering another strong quarter, our outlook on achieving these milestones is stronger than ever.

Speaker #6: In Q2, GSK reported an all-time high of $1.1 billion in sales, exceeding consensus and bringing year-to-date sales to approximately $2 billion, an 8% increase year over year.

Speaker #6: This performance puts us firmly on track to exceed the $3.4 billion annual sales threshold in 2025, which would trigger a $50 million milestone payment.

Speaker #6: With the brand's annualized run rate now above $4 billion, we remain confident in achieving this milestone, as well as the additional $100 million milestone in 2026, where $3.5 billion in annual sales is required.

Speaker #6: In total, that represents $150 million in high probability milestones, over the next 18 months, further strengthening our financial profile. Turning to slide 18 and our Q2 financial highlights, where we came in favorable to expectations.

Aziz Sawaf: Turning to slide 18 and our Q2 financial highlights, where we came in favorable to expectation, collaboration revenue grew 31% year over year, driven by continued UPELRI net sales growth, leading to improved brand-level profit margins. Note that even excluding the one-time benefit to pricing that Rhonda mentioned, collaboration revenue would have been over $17 million, still favorable to consensus. We also recognized, as part of license revenue, a one-time $7.5 million milestone, following UPELRI's regulatory approval in China. R&D and SG&A operating expenses were in line with expectations. R&D reflected near-complete Cypress enrollment and NDA-related activities. SG&A increases were tied to AMPRELOX pre-launch commercial and medical affairs activities. Share-based comp decreased 16% year over year, reflecting continued cost discipline. Related to the Trilogy royalty sale, we recognize $75 million of other income.

Speaker #6: Collaboration revenue grew 31% year over year, driven by continued Upelry net sales growth. Leading to improved brand-level profit margins. Note that even excluding the one-time benefit to pricing that Rhonda mentioned, collaboration revenue would have been over $17 million still favorable to consensus.

Speaker #6: We also recognized, as part of license revenue, a one-time $7.5 million milestone following Upelry's regulatory approval in China. R&D and SG&A operating expenses were in line with expectations.

Speaker #6: R&D reflected near-complete cypress enrollment, and NDA-related activities. SG&A increases were tied to Amperloxetine pre-launch commercial and medical affairs activities. Share-based comp decreased 16% year over year, reflecting continued cost discipline.

Speaker #6: Related to the Trelogy royalty sale, we recognized $75 million of other income. Note that under our accounting guidelines, the total $225 million upfront was reduced by approximately $145 million, which was already recognized in prior periods.

Aziz Sawaf: Note that under our accounting guidelines, the total $225 million upfront was reduced by approximately $145 million, which was already recognized in prior periods. Non-GAAP losses improved to $4.2 million compared to $6.3 million in prior year, excluding one-time items. We ended the quarter with approximately $340 million in cash. Excluding large one-time items, cash burn for the quarter was approximately $3 million, highlighting strong cash management. Looking ahead, we expect to pay approximately $27 million in taxes related to the Trilogy royalty sale in the second half of the year. These taxes were fully accrued in Q2 and will not impact the P&L going forward. On slide 19, we are reaffirming all elements of our 2025 financial guidance.

Speaker #6: Non-gap losses improved to $4.2 million, compared to $6.3 million in prior year, excluding one-time items. We ended the quarter with approximately $340,000,000 in cash.

Speaker #6: Excluding large one-time items, cash burned for the quarter was approximately $3 million, highlighting strong cash management. Looking ahead, we expect to pay approximately $27 million in taxes related to the Trelogy royalty sale, in the second half of the year.

Speaker #6: These taxes were fully accrued in Q2 and will not impact the P&L going forward. On slide 19, we are reaffirming all elements of our 2025 financial guidance.

Aziz Sawaf: That said, excluding the impact of one-time milestones and taxes, in other words, focusing on recurring operations, we expect both non-GAAP losses and cash burn to improve in the second half compared to 2024. This reflects improvements in underlying business performance and continued cost discipline. To summarize, we delivered a strong quarter of financial results and now anticipate a stronger second half than previously expected, creating a solid financial foundation as we approach the upcoming Cypress data readout. With that, I'll turn it back to Rick to conclude. Rick?

Speaker #6: That said, excluding the impact of one-time milestones and taxes, in other words, focusing on recurring operations, we expect both non-gap losses in cash burned to improve in the second half compared to 2024.

Speaker #6: This reflects improvements in underlying business performance and continued cost discipline. To summarize, we delivered a strong quarter of financial results and now anticipate a stronger second half than previously expected, creating a solid financial foundation as we approach the upcoming Cypress data readout.

Speaker #6: With that, I'll turn it back to Rick to conclude. Rick?

Rick Winningham: Thanks, Aziz. In summary, Theravance enters the second half of the year with clear momentum approaching a transformational catalyst in the Cypress data readout. We're operating from a position of financial strength and executing at a high level across both our R&D and commercial organizations. UPELRI continues its profitable growth. The sale of our remaining Trilogy royalty interests significantly bolstered our financial position, and with up to $175 million in potential milestones remaining between Trilogy and UPELRI, we continue to see substantial value ahead. AMPRELOX remains our most important driver of potential upside, and we are now a couple of weeks away from completing enrollment in the open label portion of the Cypress study. We are confident that Cypress is well positioned to confirm the meaningful benefit observed in the pre-specified MSA subgroup of our prior Redwood study.

Speaker #3: Thanks, Aziz. In summary, Theravance enters the second half of the year with clear momentum approaching a transformational catalyst in the cypress data readout. We're operating from a position of financial strength and executing at a high level across both our R&D and commercial organizations.

Speaker #3: Upelry continues its profitable growth, the sale of our remaining Trelogy royalty interest significantly bolstered our financial position, and with up to $175 million in potential milestones, remaining between Trelogy and Upelry, we continue to see substantial value ahead.

Speaker #3: Amperloxetine remains our most important driver of potential upside, and we are now a couple of weeks away from completing enrollment in the open-label portion of the cypress study.

Speaker #3: We are confident that cypress is well positioned to confirm a meaningful benefit observed in the pre-specified MSA subgroup of our prior Redwood study. This program has been executed with discipline, quality, and conviction, and if successful, we believe Amperloxetine could redefine standard of care in this rare neurogenic condition, where no proven therapies exist today for patients with NOH and MSA.

Rick Winningham: This program has been executed with discipline, quality, and conviction, and if successful, we believe AMPRELOX could redefine standard of care in this rare neurogenic condition where no proven therapies exist today for patients with NOH and MSA. In summary, Theravance is focused, well capitalized, and advancing towards a pivotal inflection point with a profitable commercial business, a strong balance sheet, and a late-stage, rare disease, neurology-focused development program that is nearing a critical milestone. We're excited and well positioned to drive meaningful value for patients and shareholders in the months ahead. With that, we'll open the line for questions. Operator?

Speaker #3: In summary, Theravance is focused, well-capitalized, and advancing towards a pivotal inflection point. With a profitable commercial business, a strong balance sheet, and a late-stage, rare disease neurology-focused development program that is nearing a critical milestone, we're excited and well positioned to drive meaningful value for patients and shareholders in the months ahead.

Speaker #3: With that, we'll open the line for questions. Operator?

Speaker 7: Thank you, sir. Once again, if you would like to ask a question, you may do so by pressing star one-one on your touch-tone telephone. If listening via webcast, please mute audio on your webcast device before asking a question over the phone. If you're using a speakerphone for today's call, please make sure your mute function is turned off to allow your signal to reach our equipment. Again, that is star one-one if you would like to ask a question. We will pause a moment to assemble our roster. Our first question is going to come from the line of Douglas Soh with HC Wainwright. Your line is open. Please go ahead.

Speaker #2: Thank you, sir. Once again, if you would like to ask a question, you may do so by pressing *11 on your touchtone telephone.

Speaker #2: If listening, via webcast, please mute audio on your webcast device before asking a question over the phone. If you're using a speakerphone for today's call, please make sure you mute your mute function is turned off to allow your signal to reach our equipment.

Speaker #2: Again, that is star 11 if you would like to ask a question. We will pause a moment to assemble our roster. Our first question is going to come from the line of Douglas Sow with HC Ringwright.

Speaker #2: Your line is open. Please go ahead.

Speaker 8: Hi, good afternoon, and congrats on the progress. I guess starting with UPELRI, I guess, Rhonda, there were comments about sort of better pull-through this quarter. I'm just curious what you attribute that to. And then also on UPELRI, I'm just curious, you know, we've obviously made some progress in terms of sort of optimizing or improving the channel mix to improve pricing. I'm just curious, if you think about what sort of a realistic optimal channel mix, how far away are you from that and how, you know, is it realistic to get there and how long might that take to get? Thank you.

Speaker #5: Hi, good afternoon. And congrats on the progress. I guess starting with Upelry, I guess Rhonda, there were comments about sort of better pull-through this quarter.

Speaker #5: I'm just curious what you attribute that to. And then also, on Upelry, I'm just curious you know we've obviously made some progress in terms of sort of optimizing or improving the channel mix to improve pricing.

Speaker #5: I'm just curious if you think about what sort of a realistic optimal channel mix, how far away are you from that, and how you know is it realistic to get there and how long might that take to get?

Speaker #5: Thank you.

Rhonda Farnum: Thanks for the question, Doug. On the first note of continuing to improve the pull-through, that certainly is related to that move of volume that continues to move over to specialty pharmacy. And with that, I would say why that continues to help, the support of the pull-through is certainly driven by two aspects. One, the pricing in that channel, but more importantly, the persistency and the support patients receive. So not only is fulfillment improved, but also persistency is much greater when fulfillment occurs in that space. As far as how much more to move and how quickly, we still continue to believe it's very important to ensure patients and healthcare providers have whatever option they feel is best for their individual needs. So keeping that open network still remains a strategic focus.

Speaker #4: Thanks for the question, Doug. On the first note, of continuing to improve the pull-through, that certainly is related to that move of volume that continues to move over to specialty pharmacy.

Speaker #4: And with that, I would say why that continues to help the support of the pull-through is certainly driven by two aspects. One, the pricing and that channel, but more importantly, the persistency and the support of patients receive.

Speaker #4: So not only is fulfillment improved, but also persistency is much greater when fulfillment occurs in that space. As far as how much more to move and how quickly, we still continue to believe it's very important to ensure patients and healthcare providers have whatever option they feel is best for their individual needs, so keeping that open network still remains a strategic focus; however, ensuring that there's proper education to help clinicians make the best decision based on the patient needs that will be first and foremost the priority.

Rhonda Farnum: However, ensuring that there's proper education to help clinicians make the best decision based on the patient needs, that will be first and foremost the priority.

Speaker 8: And Rhonda, I guess in terms of the specialty pharmacy and that sort of persistence, is that just sort of the typical services that specialty pharmacies provide in terms of reminders and refills and so forth?

Speaker #5: And Rhonda, I guess in terms of the specialty pharmacy and that sort of persistence, is that just sort of the typical services that specialty pharmacies provide in terms of reminders and refills and so forth?

Rhonda Farnum: Yes, and dedicated outreach, dedicated personnel for follow-up. So as you can imagine, that certainly is far better served relative to conventional retail pharmacy.

Speaker #4: Yes, and dedicated outreach, dedicated personnel for follow-up. So as you can imagine, that certainly is far better served relative to conventional retail pharmacy.

Speaker 8: Okay, great. Thanks. I'll stop.

Speaker #5: Okay, great. Thanks. I'll stop.

Rick Winningham: Yeah, yeah, that's what I was going to say. Kind of finalize, yeah, finalize Rhonda's comments, which I also think that, you know, the transition of care work hospital to home is also, you know, improving. And certainly, you know, channel mix specialty pharmacy, you know, facilitates some of that work as well as the ability for patients to choose what works best for them.

Speaker #6: Yeah, Doug.

Speaker #3: Yeah, just to kind of finalize yeah Rhonda's comments, which I also think that you know the transition of care work, hospital to home is also you know improving in certainly you know channel mix, specialty pharmacy you know facilitates some of that work, as well as the ability for patients to choose what works best for them, so.

Speaker 8: Okay, great. Thank you very much.

Speaker #5: Thank you very much.

Speaker 7: Thank you. And one moment for our next question. Our next question comes from the line of Julian Harrison with BTIG. Your line is open. Please go ahead.

Speaker #2: Thank you. And one moment for our next question. Our next question comes from the line of Julian Harrison with BTIG. Your line is open.

Speaker #2: Please go ahead.

Speaker 9: Hi, thank you for taking my question. Let me have my address and all the recent progress. Well, on UPELRI in China, I'm curious if we could talk about the outlook for near-term growth. And can you remind us of the longer-term market opportunity there as well? And regarding Cypress, are you able to comment now on how US versus ex-US enrollment has been trending? And when open label enrollment is expected to be confirmed later this summer, should we expect any disclosure of baseline characteristics around that time, or is that something being saved for top-line disclosure?

Speaker #7: Hi, thank you for taking my question. Let me have my address and all the recent progress. On Upelry in China, I'm curious if you could talk about the outlook for near-term growth, and can you remind us of the longer-term market opportunity there, as well?

Speaker #7: And regarding Cypress, are you able to comment now on how U.S. versus ex-U.S. enrollment has been trending? And when open-label enrollment is expected to be confirmed later this summer, should we expect any disclosure of baseline characteristics around that time, or is that something being saved for top-line disclosure?

Rick Winningham: Rhonda, you want to take UPELRI, and then we'll come back to Aine on the Cypress questions from Julian.

Speaker #3: Rhonda, you want to take Upelry and then we'll come back to Ane on the cypress questions from Julian.

Rhonda Farnum: Yeah, thanks, Julian. As I highlighted in the earlier commentary, with ViaTrust taking the lead and frankly the ownership of the China market, we're going to leave the additional comments based on the market plan, the full launch plan itself, to when they unveil that. So my comments are really limited at this stage.

Speaker #4: Yeah, thanks, Julian. As I highlighted in the earlier commentary, with ViaTress, taking the lead and frankly the ownership of the China market, we're going to leave the additional comments based on the market plan, the full launch plan itself.

Speaker #4: To when they unveil that, so my comments are really limited at this stage.

Rick Winningham: Aine, Cypress?

Speaker #6: Ane, cypress?

Aine Miller: Julian, so to your first question in terms of ex-US versus UX split, we have many of the same slides that we've included in the previous 170 study. So overall, we expect the split and the profile to look very similar. And with regard to disclosure in advance of top-line readout, obviously, the pivotal data is on the endpoint at the end of that randomized withdrawal period. So our plan at the moment is to disclose all data at top-line readout.

Speaker #5: Julian, to your first question in terms of ex-U.S. versus U.S. split, we have many of the same sites that we've included in the previous 170 study.

Speaker #5: So overall, we expect the split in the profile to look very similar. And with regard to disclosure and advance of top-line readout, obviously the pivotal data is on the endpoint, is at the end of that randomized withdrawal period.

Speaker #5: So our plan at the moment is to disclose all data at top-line readout.

Rick Winningham: Very helpful. We will issue a press release when we reach the full enrollment of the open label portion of the study.

Speaker #7: Very helpful.

Speaker #3: We will, Julian, issue. We will issue. We will issue a press release when we reach the full enrollment of the open-label portion of the study.

Speaker 9: Got it. Thank you. That's helpful all around. Congrats again.

Speaker #7: Got Got it. Thank you. That's helpful all around. Congrats again.

Speaker 7: Thank you. One moment as we move on to our next question. Our next question comes from the line of Deepanjana Chatterjee with Jones. Your line is open. Please go ahead.

Speaker #2: Thank you. One moment as we move on to our next question. Our next question comes from the line of D. Benjona, Chatterjee with Joan.

Speaker #2: Your line is open. Please go ahead.

Speaker 10: Hi, thanks for taking my question and congrats on the quarter. I had a question regarding how you would think about pricing AMPRELOX. I know we are still a little far from the top-line data, but it would be helpful if you could share your thoughts on the pricing of the drug and if Norteva and its usage is a good benchmark.

Speaker #8: Hi, thanks for taking my question and congrats on the quarter. I had a question regarding on how you would think about pricing Amperloxetine. I know we are still a little far from the top-line data, but it would be helpful if you could share your thoughts on the pricing of the drug and if you know Northera and its usage is a good benchmark.

Rick Winningham: Rhonda, you can take that.

Speaker #3: Rhonda?

Speaker #6: You want to take that?

Rhonda Farnum: Thank you for the question, and it's a very important one. To your point, it's still a little bit early to really reflect on a very narrow view on what the price will be. But I will say, in hearkening back to some commentary from our last opinion leader event for AMPRELOX, we did an analysis looking at rare neuro drug launches and across the average of the most recent 10 launches to try to gauge what an average price would be. And that was roughly $380,000 per year. So that can give you a sense of what is occurring in the rare disease space. As a reference to doxycycline and looking at their higher strength cost on an annual basis, that is roughly $280,000 a year.

Speaker #4: Thank you for the question, and it's a very important one. To your point, there's still a little bit early to really reflect on a very narrowed view on what the price will be.

Speaker #4: But I will say, and harkening back to some commentary from our last opinion leader event for Amperloxetine, we did an analysis looking at rare neuro drug launches. Across the average of the most recent 10 launches, we tried to gauge what an average price would be, and that was roughly $380,000 per year.

Speaker #4: So, that can give you a sense of what is occurring. And in the rare disease space, as a reference to Droxydopa and looking at their higher strength cost on an annual basis, that is roughly $280,000 a year.

Rhonda Farnum: So hopefully, that can help you appreciate some of the dynamics that will be taken into consideration for our pricing work that will occur once we have data from the Cypress study.

Speaker #4: So hopefully that can help you appreciate some of the dynamics that we'll be taking into consideration for our pricing work that will occur once we have data from the Cypress study.

Speaker 10: That's very helpful. And then a quick follow-up. On the US or ex-US dynamics, in terms of reimbursement and payer perspective, are there any differences between US and ex-US? And do you expect any pushback given there are generics out there, although less effective and with fewer side effects?

Speaker #8: That's very helpful. And in a quick follow-up, on the US or ex-US dynamics, in terms of reimbursement and payer perspective, are there any differences between US and ex-US?

Speaker #8: And do you expect any pushback, given there are genetics out there, although less effective and with clear side effects?

Rick Winningham: So, Rhonda, do you want to take that?

Speaker #3: Rhonda, do you want to take that?

Rhonda Farnum: Sure. I'll comment more so on there are vast differences. And to really even say US versus ex-US, I think that's even too broad. So I'll focus on US, given that's where our launch focus is. We are already actively engaging payers, and I think it's very important to ensure they appreciate the value of being educated about the disease itself, as well as the very high unmet need. And they've reacted very enthusiastically to wanting to learn about this important underserved patient population. What's important to them is appreciating the data once we have the data and really what the durability will be offered for these patients, given that is an unmet need currently with existing therapies, as well as the safety profile, which will be critically important.

Speaker #4: Sure. I'll comment more so on their vast differences. And to really even say US versus ex-US, I think that's even too broad. So I'll focus on US, given that's where our launch focus is.

Speaker #4: We are already actively engaging payers, and I think it's very important to ensure they appreciate the value of being educated about the disease itself, as well as the very high unmet need.

Speaker #4: And they've reacted very enthusiastically to wanting to learn about this important underserved patient population. What's important to them is appreciating the data once we have the data, and really what the durability will be offered for these patients, given that is an unmet need.

Speaker #4: Currently, with existing therapies, as well as the safety profile, which will be critically important.

Rick Winningham: And the other point I would add, yeah, the other point I would add to Rhonda's points are simply the endpoint that we're using here, which is the OHSA composite score, which is an overall endpoint, you know, containing a number of different symptoms on the overall well-being of patients. And I think this is, you know, this is quite important for describing the impact that the product has on the overall life, the quality of life of the patient, and the patient's ability to interact and, you know, quite honestly, live a life that's not restricted or as restricted by, you know, bad time in bed. So we're very excited by the early perspectives of payers. And then also, it's important to underscore the endpoint here being the OHSA composite score as being very distinct from something like dizziness alone.

Speaker #3: And the other point I would.

Speaker #6: Yeah, the other yeah, the other point I would add to Rhonda's points are simply the endpoint that we're using here, which is the OHSA composite score, which is an overall endpoint you know containing a number of different symptoms.

Speaker #6: On the overall well-being of patients, and I think this is you know this is quite important. For describing the impact that the product has on the overall life quality of life of the patient and the patient's ability to interact and you know quite honestly live a life that's not restricted or as restricted by you know bad time and bad so we're very excited by the early perspectives of payers and then also it's important to underscore the endpoint here being the OHSA composite score as being very distinct from something like dizziness alone.

Speaker 10: That's helpful. Thank you so much.

Speaker #8: That's helpful. Thank you so much.

Speaker 7: Thank you. And one moment for our next question. Our next question comes from the line of Ellen Horst with TD Cowan. Your line is open. Please go ahead.

Speaker #2: Thank you. One moment for our next question. Our next question comes from the line of Ellen Horst with TD Cowen. Your line is open.

Speaker #2: Please go ahead.

Speaker 11: Hi guys. Thanks for taking the question and congrats on the quarter. I'm wondering if you can speak to the pace of SG&A increases that you expect would be associated with AMPRELOX sales build-out between both now and the data and then how that might change on the back end of the data if the data is positive.

Speaker #8: Hi, guys. Thanks for taking the question, and congrats on the quarter. I'm wondering if you can speak to the pace of SG&A increases that you expect would be associated with Amperloxetine sales build-out between both now and the data, and then how that might change on the back end of the data if the data is positive.

Aziz Sawaf: Yeah, sure, I can take it. So I think if you're talking about this year, if you look into the second half relative to Q1 and Q2, I don't expect the SG&A number to increase at all. It should be pretty stable versus at least Q2 and even Q1. So we have been spending a little bit on pre-launch commercial and medical affairs-related activities, as Rhonda was previously describing. Not a whole lot, but a little bit. We expect that to be kind of stable throughout the year. So you will not see a meaningful increase in SG&A between now and the Cypress data readout. We are maintaining as much, you know, conservatism as possible while still, you know, pushing as much value into the brand as possible prior to the data readout. So stable through now until the data readout.

Speaker #6: Yeah, sure. I can take it. So I think if you're talking about this year, if you look into the second half relative to Q1 and Q2, I don't expect the SG&A number to increase at all.

Speaker #6: It should be pretty stable versus at least Q2. And even Q1. So we have been spending a little bit on pre-launch commercial and medical affairs-related activities as Rhonda was previously describing.

Speaker #6: Not a whole lot, but a little bit. We expect that to be kind of stable throughout the year. So you will not see a meaningful increase in SG&A between now and the cypress data readout we are maintaining as much you know conservatism as possible while still you know pushing as much as much value into the brand as possible prior to the data readout.

Speaker #6: So stable through now until the data readout. Post-data readout, you know we're still working through what that would look like. Obviously, we don't provide guidance until next year, so you'll have to stay tuned in terms of the exact numbers.

Aziz Sawaf: Post-data readout, you know, we're still working through what that would look like. Obviously, we don't provide guidance until next year, so you'll have to stay tuned in terms of the exact numbers. But obviously, if positive, there's going to be a big value inflection point, and we will be increasing SG&A spend through next year into launch. In terms of magnitude, as Rhonda and Rick have mentioned previously, we are looking at a targeted launch. So you're not talking about huge levels of incremental spend, but there will be incremental spend as part of the launch preparation.

Speaker #6: But obviously, if positive, there’s going to be a big value inflection point, and we will be increasing SG&A spend through next year into launch.

Speaker #6: In terms of magnitude, as Rhonda and Rick have mentioned previously, we are still we are looking at a targeted launch. So you're not talking about huge levels of incremental spend.

Speaker #6: But there will be incremental spend as part of the launch preparation.

Rick Winningham: Yeah, just to add to what Aziz has provided a nice summary as to where we are, I think it is very important to understand that with 40,000 patients with MSA and NOH and the targeting that this really permits us to do of understanding where those patients are and what we need to do in the advent of a good Cypress data and approval to support the offices that treat and the physicians that treat these patients. And I think all the data that we have will allow us to be extremely focused on the SG&A spend with regard to the marketing of AMPRELOX.

Speaker #3: Yeah, just to add to what Aziz has provided a nice summary as to where we are, I think it's it is very important to understand the the with 40,000 patients with MSA and NOH and the targeting that this really permits us to do of understanding where those patients are, and what we need to do in the in the advent of a cypress good cypress data and approval to support the offices that treat and the physicians that treat these patients.

Speaker #3: And I think all of the data that we have will allow us to be extremely focused on the SG&A spend with regard to the marketing of Amperloxetine.

Rhonda Farnum: Thanks, that's very helpful.

Speaker #8: Thanks. That's very helpful.

Speaker 7: Thank you. And one moment for our next question. Our next question comes from the line of David Reisinger with Liranque Partners. Your line is open. Please go ahead.

Speaker #2: Thank you. And one moment for our next question. Our next question comes from the line of David Reisinger with Lerank Partners. Your line is open.

Speaker #2: Please go ahead.

Speaker 9: Yes, thanks very much. I have a few questions, please, and congrats on the very strong financial performance. So with respect to the ViaTrust collaboration, so the revenue grew 31% on a 22% UPELRI net sales increase. Should we expect continued operating leverage in coming quarters with collaboration revenue growing higher than UPELRI sales? So that's the first question. And then with respect to AMPRELOX, I believe the Phase Three trial's primary endpoint is a longer duration primary endpoint than previously studied. If you could just talk about that and whether you think that will or how that may impact the results versus results that have been previously reported. Meaning, as patients stay on drug longer, do they have any tachyphylaxis? Might they improve more over a more extended period of time? Any perspective would be helpful. Thank you.

Speaker #7: Yes, thanks very much.

Speaker #6: I have a few questions, please, and congrats on the very strong financial performance. So with respect to the ViaTress collaboration, revenue grew 31% on a 22% Upelry net sales increase.

Speaker #6: Should we expect continued operating leverage in coming quarters with collaboration revenue growing higher than Upelry sales? So that's the first question. And then, with respect to Amperloxetine, I believe the Phase 3 trial's primary endpoint is a longer duration primary endpoint than previously studied.

Speaker #6: If you could just talk about that and whether you think that will or how that may impact the results versus results that have been previously reported. Meaning, as patients stay on the drug longer, do they have any tachyphylaxis?

Speaker #6: Do they, might they improve more? Over a more extended period of time? Any perspective would be helpful. Thank you.

Rick Winningham: So Aziz, you want to take on the operating leverage question of UPELRI, and then we'll go to Aine for the AMPRELOX analysis.

Speaker #3: So, Aziz, do you want to take on the operating leverage question for Upelry? And then we'll go to Ane for the Amperloxetine analysis.

Aziz Sawaf: Yeah, thanks, David, for the question. And good observation. Obviously, the collaboration revenue growth was a good amount higher than the net sales growth, 31% versus 22%. As you probably know, the difference between the collaboration revenue and simply 35% of the profit is the netting of the reimbursement between the two companies related to the cost. But going forward, I don't expect it to kind of continue to be that significant of a gap between the collaboration revenue and the net sales growth because I think that the costs are going to be relatively stable. The costs just do sometimes bounce around quarter to quarter. So it just so happens this quarter was a little bit lighter. But I don't expect there to be a meaningful gap going forward between the collaboration revenue growth and the net sales growth.

Speaker #6: Yeah, thanks, David, for the question. And good observation. Obviously, the collaboration revenue growth was a good amount higher than the net sales growth: 31% versus 22%.

Speaker #6: As you probably know, the difference between the collaboration revenue and simply 35% of the profit is the netting of the reimbursement between the two companies related to the cost.

Speaker #6: So, going forward, I don't expect it to continue to be that significant of a gap between the collaboration revenue and the net sales growth, because I think that the costs are going to be relatively stable.

Speaker #6: The costs just do sometimes bounce around from quarter to quarter, so it just so happens this quarter was a little bit lighter. But I don't expect there to be a meaningful gap going forward between the collaboration revenue growth and the net sales growth.

Rick Winningham: David, we are able to get some leverage, you know, as you point out, you know, on the P&L from the nature of our work and efficiency. But I think continued increases in leverage, as Aziz pointed out, is, you know, one probably shouldn't expect that. So AMPRELOX, Aine?

Speaker #3: David, we are able you know we are able to get you know some leverage you know as you point out, you know on the P&L.

Speaker #3: From the nature of our work and efficiency, but I think continued increases in leverage, as Aziz pointed out, is you know one probably shouldn't expect that.

Speaker #3: So Amperloxetine, Ane?

Aziz Sawaf: Rick, just on the UPELRI comment, what I was describing was just the difference in growth rate between the collaboration revenue and the sales. If you're talking about a profitability perspective.We

Speaker #6: Rick, just on the Upelry comment, what I was describing was just the difference in growth rate between the collaboration revenue and the sales. If you're talking about a profitability perspective, we do expect increased profit margin as the net sales growth.

Speaker 1: do expect increased profit margin as the net sales growth because, you know, as the costs stay flat but the net sales increase, the margin continues to expand. So, from a profit margin perspective, I do expect continued increases to the profit margin as the net sales increase. Go ahead, Rick.

Speaker #6: Because you know as the costs stay flat, but the net sales increase, the margin continues to expand. So from a profit margin perspective, we do I will I do expect continued increases to the profit margin as the net sales increase.

Speaker #6: Go ahead, Rick.

Rhonda Farnum: Yeah, Aine at Cyprus.

Speaker #3: Yeah, Ane, cypress?

Rick Winningham: Hello, David. Thanks for the question. So, you're correct in terms of the primary endpoint in Cyprus is the OHSA composite score. And durability of effect is really central to the design of Cyprus. And, you know, what we've seen previously in 170 was a durable benefit, which is very different to what others have seen in this space in terms of benefits. So, other approved drugs have not shown the benefit beyond two weeks. So, we really hope that durability is going to be a key differentiator for us. And in the Cyprus study, what we hope to see in the randomized withdrawal, and the randomized withdrawal for Cyprus is eight weeks long, is for the patients that stay on ampraloxidine that we continue to see stability in the benefit that we've seen over the open label period.

Speaker #5: So, so, so, David, sorry for the question. You're correct in terms of the primary endpoint in CYPRUS being the OHSA composite score. Durability of effect is really central to the design of CYPRUS.

Speaker #5: And you know what we've seen previously in Q2 was a durable benefit, which is very different from what others have seen in this space in terms of benefit.

Rick Winningham: And those then taken off ampraloxidine would worsen during that eight-week period. So, that's our expectations and rightly durability being the central theme to that randomized withdrawal design.

Rhonda Farnum: Yeah. And then, David, on your comment on tachyphylaxis, it's important to understand, as Aine sort of pointed out in terms of mechanism, you know, the ampraloxidine is a reuptake inhibitor. So, we're blocking the reuptake, you know, of norepinephrine. It isn't an agonist per se. So, we're not adding additional norepinephrine from an exogenous perspective into the system. We're just blocking the naturally occurring norepinephrine that occurs, you know, in the synapse. We're keeping it there longer so that, in fact, enables the exertion, you know, enables an increase in blood pressure that is measured overall by the individual symptom score and the OHSA composite.

Aine Miller: Great. Thank you.

Rhonda Farnum: Thank you. It appears we have no further questions. I would now like to hand the conference back to Mr. Winningham. Please go ahead, sir.

Rhonda Farnum: Yeah, operator, thank you very much. And I'd like to thank everyone for joining us today. As we reported our second quarter results, we're obviously very excited about the performance in the second quarter and we're very excited about what the future brings for Theravance across our portfolio. So, thank you very much. And we look forward to bringing you further updates as the year progresses.

Thank you. It appears, we have no further questions, I would now like to hand the conference back to Mr. Winningham, please go ahead, sir.

Yeah. Operator. Thank you very much. And I'd like to thank everyone for uh, uh, joining us today as we reported our second quarter results. Were obviously very excited about, uh, the performance in the second quarter and we're very excited about what the, what the future brings for the events, our portfolio. So, uh, thank you very much and we look forward to bringing you.

Rhonda Farnum: This concludes today's conference call. We thank you for participating. You may now disconnect.

Further updates, uh, as the year progresses.

Includes today's conference call. We thank you.