Ladies and gentlemen, good afternoon. At this time, I'd like to welcome everyone to the Theravance Biopharma Conference Call. [Operator Instructions] Today's conference call is being recorded. And now I would like to turn the call over to Alex Dobbin, Head of Investor Relations. Please go ahead.

Good afternoon, everyone. Thank you for joining our second quarter 2017 financial results conference call and webcast. With me on the call today are Rick Winningham, Chief Executive Officer; Renee Gala, Chief Financial Officer; and Brett Haumann, Chief Medical Officer. Following our prepared remarks, we'll open the call for questions. A copy of the press release and the slides accompanying this call can be downloaded from our website, or you can call Investor Relations at 650-808-4045, and we'll be happy to assist you. Before we get started, we'd like to direct your attention to slide 2 of the deck and remind you that this conference call will contain forward-looking statements, which involve certain risks and uncertainties, including statements about our product pipeline, expected benefits of our products, the anticipated timing of trial results and regulatory filings and expected financial results. Information concerning factors that could cause results to differ materially from our forward-looking statements are described further in the company's filings made with the Securities and Exchange Commission. And with that, I'll hand the call over to Rick.

Thanks, Alex. Good afternoon, everyone, and thank you for joining us. We're incredibly pleased with our progress to date in 2017, which includes the delivery of meaningful clinical data across multiple programs within our portfolio. In our call today, we will provide an update on our key programs and anticipated milestones outlined on Slide 3, including data from the first cohort of patients in our Phase 1b study of our intestinally restricted JAK inhibitor, TD-1473. I'll start with an overview of our recent progress, and then Brett will share some additional color. Then Renee will review our financial performance. Then we'll open the call for questions. I'll start with our Phase 1b study of TD-1473 in patients with moderate to severe ulcerative colitis. In a separate press release this afternoon, we released -- we announced results from our first cohorts of patients. With four weeks of treatment in a small group of patients, 1473 demonstrated encouraging evidence of localized target engagement. More specifically, we saw improvements in measurements of disease activity without evidence of systemic exposure and with a favorable tolerability profile, all of which is consistent with the desired target product profile of this drug. These early findings represent an important step in our JAK inhibitor program, which is compelling directional evidence of local biological activity of 1473 and the absence of systemic exposure that can lead to unwanted side effects. Systemic exposure is a key question we're seeking to answer in this study, given its bearing on the premise of our program. Data from the first cohort suggests that the concentration of 1473 in the blood in ulcerative colitis patients is low and consistent with what we observed in healthy volunteers. Today's results are in keeping with the distinctive design principles we sought for 1473, to reduce inflammation…

Thanks, Rick, I'll start with our JAK inhibitor program, where our goal is to develop a highly differentiated treatment option for inflammatory bowel diseases, including ulcerative colitis. TD-1473 is designed to remain localized and only act within the gut wall, thereby, maximizing local anti-inflammatory efficacy and minimizing the systemic exposure that would otherwise lead to immunosuppression. The primary purpose of the Phase 1b study, outlined on slide 5, is to evaluate the safety and tolerability of 1473 administered once daily for 28 days and to assist the compound's plasma exposure following oral dosing. In addition, the study incorporates biomarker analysis and clinical, endoscopic and histological assessments to evaluate the biological effect of the drug. At this stage in the program, we are looking for compelling directional evidence across a range of measurements that the drug is having an impact on the disease and behaving in patients as we would expect. These measurements include biomarkers; clinical assessments, including frequency and bloodiness of stool; histological assessments from biopsy samples; and centrally read endoscopy scores. Taken together, these results will inform dose optimization for future clinical development. Today, we reported results from the first cohort of patients, which consisted of 10 patients receiving 80 milligrams of 1473 dosed once daily for 28 days and 3 patients on matched placebo. The number of patients is small, but the data we're seeing from the first cohort is promising, and it's been reviewed with a considerable measure of scrutiny and intensity on a patient-by-patient basis by both internal and external experts in ulcerative colitis. As we've noted on slide 6, data from the first cohort showed positive changes in key disease measures after four weeks of treatment. As noted in our press release today, systemic drug levels were low based on evaluation of plasma levels and…

Thank you, Brett. Revenue for the second quarter of 2017 was $3.5 million, primarily related to U.S. net product sales of VIBATIV. Research and development expenses for the second quarter of 2017 were $42.9 million as compared to $32.1 million in the same period in 2016. The increase in R&D expense is primarily attributed to costs associated with the progression of our key programs. Second quarter R&D expense includes $4.9 million in noncash share-based compensation expense. Selling, general and administrative expenses for the second quarter of 2017 were $24.3 million as compared to $20.3 million for the same period in 2016. The increase in expense is primarily due to employee-related costs, external expenses related to G&A and share-based compensation, partially offset by a reduction in external expenses related to commercialization activities. Second quarter SG&A expense includes $5.5 million in noncash share-based compensation expense. We remain in a well-capitalized position with $498.3 million in cash, cash equivalents and marketable securities at the end of the second quarter. For the full year 2017, based on current plans and expectations, we project our net operating loss, excluding share-based compensation, to be in the range of $205 million to $215 million. This guidance is above previous full year guidance of $195 million to $205 million, primarily driven by our decision to accelerate spending associated with the next phase of development in the JAK inhibitor program. Finally, I'll remind you of our economic interest related to the GSK respiratory program. GSK will pay upward-tiering royalties ranging from 6.5% to 10% on worldwide net sales of the Closed Triple in COPD, if approved, and Theravance Biopharma holds an 85% economic interest in those future potential cash flows. The Closed Triple is currently under review with regulatory authorities in both the US and the EU. Based on time lines provided publicly by GSK, we could expect approvals in both regions before the end of the year and could begin receiving cash flows related to this program as soon as early 2018. GSK is responsible for all development and commercialization costs related to the Closed Triple with no cost being borne by Theravance Biopharma. GSK's ongoing investment in clinical studies for the Closed Triple includes the Phase III impact study in COPD, which is expected to read out later this year. This study in 10,000 patients with COPD is designed to assess the impact of the Closed Triple on exacerbations of COPD. Additionally, in late 2016, GSK initiated the Phase 3 CAPTAIN study to assess the Closed Triple in asthma. This study is expected to read out in 2018 and, if positive, would be followed by regulatory filings also in 2018. Now, I'll turn the call back over to Rick.

Thanks, Renee. Moving to our commercial infrastructure. The branded antibiotic space has been challenging in 2017 primarily due to the introduction of multiple suppliers of generic daptomycin and its effect on the outpatient market. We continue to focus our label expansion strategies and optimizing our operational effectiveness prior to the potential launch of revefenacin. Our ongoing Phase 3 study in primary bacteremia is progressing. Additionally, our recently completed patient registry study, or TOUR, has provided and will provide valuable information about the use of VIBATIV in real-world clinical settings, including reports of positive clinical responses in patients with bacteremia, endocarditis, osteomyelitis, skin and respiratory infections. We presented 15 TOUR-related abstracts and posters at conferences to-date, and additional publications will detail new findings from the registry over the remainder of 2017. We see the acute care setting as a very important inflection point in patient identification. We look forward to the potential to leverage this organization for the promotion of revefenacin. We're in an exciting period of progress at Theravance Biopharma, driven by the breadth of our portfolio, the productivity of our internal R&D engine and a robust business model. Turning to our list of achieved and expected upcoming milestones on slide 12. Earlier this year, we reported positive findings for our multiple ascending dose study of 1439, our second NEP inhibitor to be evaluated in a Phase 1 program. Results were in line with what we saw on a single-ascending dose study supportive of our target product profile, specifically 24-hour target engagement, nonrenal clearance and a favorable safety and tolerability profile. In the last few weeks, we've reported promising clinical findings in three of our key programs -- revefenacin and the treatment of COPD, positioning us to file for our revafenacin NDA in the fourth quarter; velusetrag in gastroparesis; and…

[Operator Instructions] Our first question comes from Geoff Porges with Leerink.

Appreciate the disclosure of the discontinuations on velusetrag. Can I just follow up on some of the comments on 1473. Wondering if you have the mean change in the partial Mayo in the active and the placebo. I know the numbers are tiny, but I think people a lot of people are looking at that. Secondly, Brett, could you comment on what we’re seeing on the endoscopies, particularly whether there was any difference in the effect seen in the upper bowel versus the lower bowel. Is the dispersal of 1473 and the effect of 1473 consistent across the colon or does it vary by location? And then lastly, or second to last, actually, why 270? Now you've seen that you're not getting any systemic absorption. You don't appear to be getting any systemic effects. Why wouldn't you be taking several steps up? Maybe 160, maybe 240. Why go all the way to 270? It looks as though you made up your mind that 80 as the dose. And then lastly, could you talk a little bit more about the induction maintenance? Is it safe to assume that that's going to be a several-hundred patient study with a 12-week duration and some sort of follow-up? Is that the sort of thing that you have in mind? I know you don't have a firm study design yet, but it would be helpful if you have any color on that. Thanks.

Geoff, this is Rick. And I'll let Brett handle most of these. That was a pretty rich set of questions. So, Brett?

Thanks, Rick. And Geoff, thank you. In fact I'll tie your first and your fourth questions together. You asked about changes in partial Mayo, and then you also asked about the design of the induction study. And I think those answers are linked in some way because, as we reported on before, the purpose in this initial Phase 1b study with a small number of patients is to look for evidence of directional effects. So that's consistent biological effect or compelling directional evidence that we're seeking really is best reflected in responder rate. So that's why we reported on the responder analysis that we've described. You're absolutely right that in such a small population, going to formal analysis of mean changes in partial Mayo was never the intent. We were always looking at broader patterns of performance. And in fact, that's what we've reported today. It does bring me on, though, to the intent with the next study, which, as you rightly described, would be a much larger piece of work. It's a formally powered study looking at induction. You'd mentioned 12 weeks. In fact, the convention that we believe we would mirror is that of tofacitinib with 8 weeks induction rather than 12. But our focus is also to extend the duration beyond induction to maintenance. Now this is, obviously, still subject to our interactions with regulators, who will be enormously helpful in defining and agreeing what the scope of that work would be. But really, again, to reiterate, the value in what we've seen here, this compelling directional evidence that we're disclosing today gives us confidence to be planning in earnest for the next study. It relates also to your second question, which - oh, beg your pardon, your third question, which is around doses, and I would…

So, Brett, was there any difference in the pattern of response between the patients who had the relatively localized disease and the patients who had the more extensive or pancolonic disease?

We were impressed by the overall improvements that we've seen, so although we're not reporting on individual patient responses today, the improvements that we're seeing and bear in mind, this is not just on endoscopy but broader, looking at biomarkers, looking at clinical response, were still consistent with what we were seeking to observe, which was this consistent improvement in patients on active therapy.

Thanks Geoff, I'd just also to add to that, I think we're terrifically excited about the 80 milligram dose because we were able to deliver this dose and we were able to get signs of activity. And it really gives us an opportunity to, as Brett said, to explore the dose range given that the PK at 80, as we've noted, is right in line with the healthy volunteers, and that was just great news for us that there wasn't additional absorption of the drug into the bloodstream and, therefore, gives us several degrees of freedom with regard to going forward on optimizing the dose. So next question, operator?

[Operator Instructions] Our next question comes from Umer Raffat with Evercore.

I guess just to start off, Rick and Brett, it seems you guys are not disclosing the average partial Mayo score. Maybe just to start off, I was curious why that is.

So this is Brett. I think the response is very much as I'd mentioned, suggesting this Phase 1 study, as we reported, I think, several times, our purpose is not to focus on one endpoint or to do a statistical assessment of one clinical endpoint. As attractive as that may have - may be, particularly because we've seen that with drugs like tofacitinib - those are subject, obviously, to much larger studies in the evaluation of balanced assessment between active and placebo. And so in the study of this nature, in this early phase of development with only one cohort of data, our view has always been to look at a more holistic approach, a balance of evidence as we've described. And I think we've been very consistent in describing this as we've spoken about this study. So it's on that basis - we're not preoccupied with one symptom endpoint and indeed not in the position to be able to power for any evaluation of any endpoint, including partial Mayo. But what we have reported as you've seen is the partial Mayo response rate, and so we've included that in the list, and it needs to be seen in the context of the other improvements that we were seeing, for example, the improvements on endoscopy, the improvements on biopsy markers and then perhaps most importantly for us is this absence both of drug in the blood and of systemic consequences of that because that's what sets us apart from tofacitinib. This distinction in our minds is not just that we're seeing local effect. It's that we have absence of systemic effect. And drug levels that are entirely consistent with healthy volunteers really reaffirming that patients with an actively inflamed mucosa don't have high levels of drug, which we may have - people may have speculated might have been the case. This study has really helped to confirm that the drug levels are entirely in keeping with we've seen with healthy volunteers.

Okay, got it. If I may, I did want a follow-up outside of the actual average. Perhaps maybe, Brett, could you clarify how you defined response on total and partial Mayo score? And also, was there any overlap in the 7 patients that had a 1 point reduction on rectal bleed versus the 3 patients that had the endoscopic reduction? And also, I noticed on the partial Mayo, there was no commentary on the stool frequency or the PGA for that matter, so maybe just some color there. And then finally, any commentary on baseline.

Great, thank you. I've jotted down your comments. I'll try and capture those. And I think what you'd asked about was, obviously, the overlap with patients, so this was around people who'd had rectal bleeding as well as seeing effects on other elements. And it's fair to say, without going into the specifics because we're describing the overall effect, that there are patients who have overlaps of this various elements as you would expect. So in order to qualify, for example, on a total Mayo, and you'd asked about how they were defined, it is actually referenced in our press release as to how these definitions are specified. And they are consistent with the way that tofacitinib has evaluated its Mayo assessment. So without going into the descriptions because they can be fairly convoluted technical descriptions, I would refer you to the publication that we've quoted in our press release because that fully describes the definitions that we were using in our own assessments. But again, back to the point of overlap. There are patients who have both improvements in their rectal bleeding as well as improvements on their endoscopy as you would expect, and these patients then are contributing to the improvements that we see at holistic levels with measures like the full and partial Mayo. Stool frequency, it's a very good point, Umer, I mentioned in our script here, but it's not in the press release, that we are looking at more subtle changes within, for example, stool frequency. One of the things we've recognized with instruments like the Mayo is that the subscore for bowel frequency is relatively insensitive if you're moving from a very high frequency of bowel motions down to a less frequent and the example that I cited, a real one, actually. We saw…

No. Umer, I'd just like to just reconfirm one more time the underlying purpose of this study. The underlying purpose, we were working to get directionally compelling evidence of target engagement in patients with ulcerative colitis. And I think the - we talked several times publicly about the importance of looking at the totality of the data to develop a perspective on compelling directional evidence. And I think with the reductions in rectal bleeding and the endoscopy improvements and seeing some mucosal healing, this was just very, very encouraging to us and probably more to me than any other factor. We achieved that without seeing anything happen differently in these patients than happened in healthy volunteers relative to absorption. And we were meticulous, I would say, in terms of really measuring the effect of any drug in the blood, and we just didn't see anything. And that was quite gratifying in light of the biological activity in ulcerative colitis that we did see.

Rick, if I may, are you aware of any data on the 20 and 270 milligram?

The only data that I'm aware of is that we're enrolling in the next 2 cohorts.

Our next question comes from Brian Skorney with Robert W. Baird.

This is actually Neena on for Brian. So I just had a question about the enrollment time lines for the Phase 1b study of 1473. I know you just mentioned that you're enrolling the other 2 dose cohorts. Now are you having any trouble enrolling patients? And can you walk us through the timeline and what that might mean for enrolling a larger study? It just seems like the timeline here is a little bit longer than we had expected.

Thank you, Neena. This is Brett. That's an excellent question, and we alluded to it in the script. But let me expand on that. I think it's fair to say that our enrollment rate in this 4-week study has been slower than we were expecting. It really appears to be predominantly fueled by the fact that patients in considering their choices when they enroll into a study are presented with the option to join our 4-week study or to go into much longer studies, including induction and maintenance studies that are offering minimums of 6 months therapy, in some cases, much longer, a year or in fact even longer through the use of open-label extension studies. And this is a practice which has become something of a convention in the treatment of patients with ulcerative colitis. The patients in clinical trials expect to be able to have ongoing therapy options through the clinical program. And so I mentioned that because it has not only hampered our enrollment in a 4-week study, but I think it's also educated us that enrollment in larger studies will overcome this. And really, that's the focus with our next piece of work. I don't believe to answer your question directly, that we'll see similar impediments to the enrollment in our next study because there we're offering induction and maintenance. The patients will have the opportunity to be treated for a longer period of time. But I do note that, actually, certainly with this 4-week design, one of the unintended learnings, I think, for us has been that short-term treatment is really not an inducement for patients to participate in clinical programs.

The only thing - this is Rick. The only thing I would add is that, of course, we were enrolling patients with moderate to severe disease. We were enrolling them on a new therapy, obviously, without evidence that we were going to have biological activity, certainly, because we just tested in healthy volunteers. Now I think we have a level of evidence, of target engagement in these patients. And importantly, I think, again, as I've said and Brett said, we have no systemic exposure that's greater than the small amount - very small amount we saw in healthy volunteers. So we look forward to pushing the 1b along and preparing to go into the induction and maintenance study.

Our next question comes from Louise Chen with Cantor Fitzgerald.

The first question I had here was on the second and third cohort. Are you going to be looking at similar endpoints to what you showed in the first cohort and that means there won't be any mean change in partial Mayo score included there? And then on the induction and maintenance study, what are you going to be exploring there in terms of endpoints? And how many patients do you plan to enroll? And then last question is just on TD-9855, why you move that study out in terms of the readout into next year? And then also the advantage of your 20 weeks of treatment versus what you see on the market today.

Sure. I'll take the 9855 question then give the JAK question to Brett. So 9855, the key here for us is to show duration benefit. If we were to get patients out with the responses at 20 weeks, that would be a remarkable duration benefit for patients with neurogenic orthostatic hypertension, given the current label drugs only have activity for 2 weeks. So we're hoping to see an extended duration out to far beyond what existing medicines have seen, and that's the reason really for pushing it out into 2018 is expanding it this out to 20 weeks. I did mention in the script, we'll be seeking an accelerated pathway for this orphan disease. So back to Brett on the - on what we're looking for in the next 2 cohorts in the JAK program.

Thanks, Rick. Louise, great questions, actually. For your first question, are we looking at the same endpoints in the second and third cohort? The answer is yes. We'll continue to use the same approach that we've applied in the first cohort because that will give us a frame of reference to compare against when we look at the low dose compared to [Technical Difficulty] dose and then, of course, the high dose. Bear in mind that our overarching purpose in this is still to look for that totality of evidence, looking at all endpoints to see whether we're seeing that consistency of response and by extending it now to the three doses whether there any patterns that tell us that higher or lower doses will be less or more beneficial. So we find this all. We believe this is still very instructive to the next piece of work. That brings me onto your second question. The induction and maintenance studies are going to be much like you've seen with competitors in this class, with other people who've set the precedent. So the purpose of new program is particularly instructive to us. We're interested in the 8-week induction. We note that they looked at things like partial Mayo as a driver of their powering, and of course, we would look to do the same so that it creates a frame of reference. I will note though that the industry standard and the regulatory view is shifting a little bit in terms of the rigor of the partial Mayo and whether there are alternates with some changes on the partial Mayo. And I mentioned earlier the main one that's being debated is the utility of the PGA, the physician global assessment. And so although standing here today we see partial Mayo as a really important element of that study, I couldn't today confirm whether that's likely to be our primary endpoint because really that's the purpose of engaging regulators as we begin to plan for the study in earnest now. So it is our intention fueled by the confidence we've seen here to engage with regulators to define the endpoints, the duration, the extension from induction into maintenance, which is a purpose we are focused on with that study. You also asked about sample size. And again, that would be really finalized when we're talking to regulators about endpoints and powering. It often stems from that. But I think it would be fair to say today that you should expect to see hundreds of patients in that study as opposed to the very small numbers we have here because if we're pursuing those endpoints and looking at mean changes and deltas, we need the power to be able to detect that. And for that, we would need hundreds of patients. So expect it to be a larger, more significant piece of work.

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

Thank you very much, operator. I'd like to thank everyone for participating in our call today. And thank you for the energy over the past several weeks as we've read out three very important studies to the company's future. We look forward in the upcoming weeks and months keeping you updated on our progress. Thank you.

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