Ladies and gentlemen, good afternoon. At this time, I would like to welcome everyone to the Theravance Biopharma conference call. During the presentation, all participants will be in a listen-only mode. A question-and-answer session will follow the company's formal remarks. [Operator Instructions]. Today's conference call is being recorded. And now, I would like to turn the call over to Renee Gala, Chief Financial Officer. Please go ahead.

Good afternoon, everyone and thank you for joining our first quarter 2015 financial results conference call and webcast. Following our prepared remarks, we will open up the call for questions. Joining me on the call today are Rick Winningham, Chief Executive Officer and Dr. Mathai Mammen, Senior Vice President of Research and Development. A copy of the press release can be downloaded from our website or you can call Investor Relations at (650)-808-4045 and we will be happy to assist you. We would like to remind you that this conference call contains forward-looking statements regarding future events and the future performance of Theravance Biopharma. Forward-looking statements include anticipated results and other statements regarding the company's goals, expectations, strategies and beliefs. These statements are based upon the information available to the company today and Theravance Biopharma assumes no obligation to update these statements if circumstances change. Future events and actual results could differ materially from those projected in the company's forward-looking statements. Additional information concerning factors that could cause results to differ materially from our forward-looking statements are described in greater detail in the company's Form 10-Q filed with the Securities and Exchange Commission. And now, I would like to hand the call over to Rick Winningham. Rick?

Thanks, Renee. Good afternoon, everyone and thank you for joining us. We are pleased with our progress during the first quarter of 2015 in our core areas of focus. We implemented strategies to support VIBATIV in the U.S. market on a number of important development milestones. These include progressing 4208 towards a Phase 3 registrational program and establishing a development commercialization collaboration with Mylan, the leader in nebulized respiratory therapies. Importantly the agreement includes full funding for the Phase 3 funding for the Phase 3 program and provides Theravance Biopharma with copromotion rights and other attractive financial terms. In addition, this quarter, we advanced promising late stage research programs towards the clinic, underscoring the productivity of our discovery research platform. Over the next few minutes, we will focus our prepared remarks on the progress in our VIBATIV and 4208 programs and discuss the exciting new product candidates emerging from research and heading towards the clinic. First VIBATIV, the generic name of which is telavancin. VIBATIV is an important antibiotic with a differentiated set of product attributes, including its dual mechanism of action, bactericidal activity, in vitro potency, ability to be dosed once daily and no requirement for therapeutic monitoring. Our market research indicates an increasing awareness in expected future use of VIBATIV among physicians. We have seen steady account growth in new and existing territories in both the outpatient and hospital settings. We have achieved favorable formulary wins year-to-date and number of accounts reordering VIBATIV is continuing to increase. For these reasons, starting in the second quarter, we are implementing a next phase of expansion. We plan to build the total field force this year of 50 sales reps. This expansion should enable us to better reach physicians in our current territories and allow us to expand into new territories.…

Thanks very much, Rick. Let me start by updating you on the status of TD 4208, our Phase 3 ready program in chronic obstructive pulmonary disease or COPD which we partnered with Mylan earlier this year. 4208 is an investigational, once daily long-acting muscarinic antagonist or LAMA for COPD. What's most valuable and exciting about 4208 is its potential to fill an important therapeutic need for patients with COPD needing or prefering nebulized therapy. 4208 has the potential to become the first once daily nebulized bronchodilator for the treatment of COPD and to become the standard of care in nebulized bronchodilator therapy. We and our partner Mylan view this as a compelling market opportunity. Our major goal for 4208 is to initiate the full Phase 3 registrational program in the second half of this year. In collaboration with Mylan, we have made significant progress in establishing the clinical infrastructure for the program. We plan on conducting two replicate three-month efficacy studies, which we anticipate will readout in 2016 and a single twelve-month safety study, which we anticipate will readout in 2017. In total, we expect to enroll approximately 2,200 patients in the Phase 3 program. We are excited by the progress we are making to get the Phase 3 program up and running and believe that 4208 is one of our company's high-value asset, leveraging our significant expertise in respiratory disease and directed towards an important market segment that's largely underserved today. Next, let me discuss two exciting programs emerging from our research organization. These programs are in transition between research and development and are both headed towards Phase 1 studies late this year or early next year. Both of these programs have the potential to yield transformative medicines. I will begin with our neprilysin inhibitor program. Neprilysin or NEP…

Thanks, Mathai. Taken together, the programs we have just discussed represent major value drivers over the near, immediate and long-term for Theravance Biopharma. We have a pipeline of high value assets in various stages of development, led by VIBATIV, an approved antibiotic, that's gaining momentum in the market today, 4208 progressing towards a registrational Phase 3 program in COPD and promising new differentiated therapeutics in major disease areas emerging from our research platform. We also have additional valuable programs in our development portfolio. These include Axelopran for opioid induced constipation as well as the fixed dose combination of Axelopran and an opioid. TD-9855 for pain and fatigue and TD-8954 for the improvement of absorption of nutrition while patients are in the ICU, all of which are potentially partnerable assets. In addition, we also have Velusetrag, partnered with Alfa Wassermann for which a Phase 2b be trial is underway in gastroparesis. With this attractive is set of assets, we intend to continue our strategy of determining the appropriate path forward for each program in order to optimize its value as well as our allocation of resources. The breadth of our pipeline allows us to consider all strategic options relative to development and commercialization and we believe that the strategic optionality is one of our key competitive advantages as a company and value generating advantages. We anticipate achieving a number of important and exciting milestones in 2015 and over the next couple of years, including major data readouts. Our revenue target for VIBATIV this year is net sales of $20 million. We believe the commercial expansion strategies we are implementing will drive market uptake, enable us to meet this target as the year progresses and have a favorable impact on subsequent years. The TOUR and bacteremia studies are progressing as I noted…

Thank you, Rick. Prior to reviewing the financial results, I would like to remind you that the financial statements of Theravance Biopharma for periods prior to our spinoff from Theravance on June 2, 2014 were derived from the historical consolidated financial statements of Theravance, Inc. and therefore may not necessarily reflect what the financial profile of Theravance Biopharma would have been had it been an independent, publicly traded company during those periods. Now turning to the financials. Revenue for the quarter ending March 31, 2015 totaled $20.4 million, primarily resulting from the recognition of $19.1 million in collaboration revenues associated with the Mylan transaction announced earlier in the quarter. Collaboration revenue is derived from both the $15 million initial payment and the premium paid by Mylan on their equity purchase. Product sales for VIBATIV were $1.3 million in line with the revenue estimate provided in our last quarterly call. As expected, these sales were relatively flat quarter-over-quarter due to training and positioning of our recently expanded field force in the first half of the first quarter. Cost of goods sold for the first quarter of 2015 totaled $0.4 million, in line with expectations. Research and development expenses for the quarter were $36 million compared with $42.6 million for the same period in 2014. The decrease in R&D expense year-over-year was primarily due to lower costs associated with the long-term retention and incentive awards that were granted in 2011 prior to the spinoff. In addition, net expenses related to our development programs decreased primarily due to the reimbursement of costs in our TD-4208 program as a result of the Mylan collaboration. Total research and development share-based compensation expense was $7.5 million in the first quarter compared with $5.6 million for the same period in 2014. This increase was primarily related to…

Thanks, Renee. In summary, we achieved our objectives for the first quarter and made good progress in advancing key programs. The expansion of our field force and the initiation of the TOUR and bacteremia studies are helping to build the VIBATIV brand and plans are underway for additional commercial expansion this year to drive further market uptake. We are on track to initiate a Phase 3 registrational program for 4208 in COPD in the second half of the year in collaboration with Mylan. Additional progress this quarter included the initiation of the Phase 2b study of Velusetrag partnered with Alfa Wassermann in gastroparesis and importantly advancing promising research programs towards the clinic. As a reminder, across our respiratory assets, we have the potential for three Phase 3 completions in 2016 with two 4208 efficacy studies and a Phase 3 FULFIL study of the closed triple. And in 2017, if studies go according to plan, we expect to have three more Phase 3 completions with telavancin and bacteremia, the long-term safety study of 4208 and the larger 10,000 patient study of the closed triple. We believe that we are on target to meet our 2015 milestones and achieve an exciting year of growth for our company. I would now like to ask the operator to open the call for questions.

[Operator Instructions]. We have our first question from Gena Wang with Leerink Partners. Your line is open.

Thank you for taking my questions. Maybe I start with some clarification. Just want to make sure, 50 sales reps, does that include any medical liaisons?

So t that number doesn't include any additional medical liaisons. We may increase our MSLs by a few, but the 21 to 50 includes the sales representatives.

I see. Okay. So I think previously you mentioned you hired 10 medical liaisons. So will hire a few more in 2015?

So, yes. Gena, I think our strategy has been historically, since we began the pilot program that we have had a little bit heavier allocation to medical liaisons than perhaps historically. We would likely continue that. So we have got 10 to 11 now. We would likely take that up by a few in order to accommodate this expansion over time.

Okay. Thank you. And also with additional sales force, should we expect VIBATIV revenue actually exceeding guided $20 million?

So that's a great question, Gena. I think right now, we are going to keep our guidance at $20 million. We have seen through market research that we have done a significant impact that the sales representatives have had in the territories with regard to the change of behavior in physicians over the course of time that they been in the territories. So that was clearly an important fact in making the expansion decision. The other important fact, of course, is that we did see sales into the market increase through the course of the first quarter and we are feeling pretty good about that right now. But I am not right now going to take up $20 million guidance. We will see where we are after the expansion. And I do believe, as I said in my notes, the impact certainly will be felt in 2016 and beyond by this additional sales force expansion.

Okay. Will you continue sales expansion beyond 50?

Well, right now, I think our view is that we are pretty comfortable with this level of sales force, given the indications that we have. So I really don't want to go beyond that right now other than with this allocation, we think, is barely gets us into the territories, the new territories that we believe we need to be in as well as enabling an increase in frequency of customer calls in the territories that we are currently in.

Okay. Renee may have mentioned it, I may have missed it. I just wonder, do you have any revenue from ex-U.S. for the first quarter?

Sorry. Go ahead, Gena.

Yes. No, I was just wondering the volatility from VIBATIV ex-U.S.?

So in the first quarter, the revenue was related to the collaboration revenue that I mentioned as well as product sales. And as we look forward throughout the year, the $20 million is really focused on U.S. sales, but we do expect to have some approvals of VIBATIV outside the U.S.

Okay. Thank you.

[Operator Instructions]. Our next question is from Steve Byrne from Bank of America. Your line is open.

Rick, I missed the beginning the call and so I apologize if I ask you something that you already covered, but I was always interested in VIBATIV and where are you seeing traction and what is the particular application? Is it more pneumonia driven or skin? Where are you getting that traction that you are seeing?

Well, I would say, based on what we can see in the market right now, we are getting traction both in the outpatient setting as well as the inpatient setting. And the inpatient setting is primarily pneumonia. The outpatient setting is going to be a little bit more tilted probably the complicated skin and skin structure infections. And I think geographically, we see significant deltas between the territories where we have reps in those territories, where we don't have reps and what we have seen, particularly in March and in April, is an uptick in sales as the sales force expansion has taken hold in those territories and have begun to drive additional volume. As I mentioned to Gena in the last question, in addition to strengthening sales, what we have also seen from market research that we have done in those territories is you have awareness, familiarity, formulary status, current and projected use of VIBATIV, all increasing in those territories, not surprisingly where we have representatives. And that communicates to us that the messages is taking hold and that the message is meaningful to physicians and is in fact impacting their prescribing behavior. So that's really the underlying rationale for the expansion.

And for the inpatient setting is getting on the hospital formulary, a necessary requirement and for the outpatient setting is the ability of the hospital to be reimbursed directly for the antibiotic in of itself enabling more growth in that setting?

Yes. So we will have reasonably good reimbursement for VIBATIV across the board. As I mentioned, formularies we have achieved a number of formulary wins in the first quarter of this year. Clearly, you don't have to be on formulary in certain institutions for the product to be used, but it certainly makes it makes it easier and certainly where we had the representatives in those territories, we have experienced formulary wins. So those are necessary overall to more efficient, really promotion of the medicine and communication of its benefits.

And in the outpatient setting, is the direct reimbursement for the antibiotic helpful in driving growth there?

It is. As I said, we really haven't seen a significant -- we haven't seen any problem really with reimbursement of the product.

Okay. And then is there any opportunity down the line of getting MABA back as your own asset, since it seems to have stalled?

Well, Steve, Mathai is sitting across the table from me, so I think this clearly at this point, that MABA hasn't progressed, it's really under the purview of Theravance Incorporated and GSK and is a little bit out of our real house. So should GSK choose to not progress the program and terminate it, then we would get the MABA back, but we don't have indication about it at the current time.

Okay. Thank you.

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

Yes. Thank you very much, operator. Thanks everyone for participating in our first quarter conference call and have a great day.

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