Ladies and gentlemen, good afternoon. I'd like to welcome everyone to the Theravance Biopharma Conference Call. During the presentation, all participants will be in 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 Gail Cohen, Vice President, Corporate Communications and Investor Relations. Thank you. Please go ahead.

Good afternoon and thank you for joining the Theravance Biopharma quarterly conference call to discuss our business. As always, I remind you that this call will contain forward-looking statements, which involve risks and uncertainties, including statements about our development pipeline, expected benefits of our products, the anticipated timing of clinical trials, regulatory filings and expected financial results. Information concerning factors that could cause results to differ materially from our forward-looking statements is described further in our filings with the SEC. Now, I would direct your attention to Slide 3. Joining us are Rick Winningham, Chief Executive Officer; followed by Frank Pasqualone; Chief Commercial Operations Officer; Brett Haumann, Chief Medical Officer; and Andrew Hindman, Chief Financial Officer. Following our prepared remarks, we will open the call to questions. Now, I will hand the call to Rick for opening remarks.

Thanks, Gail. Good afternoon and thank you for joining us. To begin, we're pleased to report Theravance Biopharma has reached an important milestone that will drive us forward in the years to come. During this quarter, our commercial product, YUPELRI achieved stand-alone brand profitability. This measurement is based on accounting for consolidation of our 35% profit split with Mylan, then factoring in additional YUPELRI expenses by Theravance that are not shared with Mylan. The Mylan and Theravance commercial teams accomplished this during an ongoing respiratory pandemic. And while always remaining mindful of the health and safety of our teams and the communities we serve. Frank will share the details on our continued progress with YUPELRI. Regarding our clinical development pipeline, we're updating 2021 timelines for read outs of top line results. Specifically, we expect ampreloxetine's Phase 3 results for symptomatic neurogenic orthostatic hypotension or NOH and TD-1473's Phase 2 results for ulcerative colitis and Crohn's disease will read out during the third quarter 2021, likely in three separate press releases. Brett will share more contexts on these critical milestones. We completed Part C of the ongoing Phase 1 study for TD-8236 at moderate-to-severe asthmatics, as well as the Phase 2a Lung Allergen Challenge study in mild asthmatics. The Phase 1 Part C study demonstrated significant reductions in FeNO, pSTAT1, pSTAT6 biomarkers, even though these patients were already on inhaled corticosteroids. However, the Lung Allergen Challenge study, 8236 did not meet primary endpoint. Given the very recent receipt of these top line results as well as ongoing analysis of the merging data from Part C, including gene expression and cytokine data, we are still consolidating the overall data set to inform the future direction of 8236 development program. Brett will walk through these initial results in more detail. We continue to work as expeditiously as possible to complete the Phase 2 program for TD-0903 as a potential treatment for COVID-associated lung hyperinflammation and Brett will provide a status update on this program as well. And finally, Andrew will walk through the financial update at the end of our presentation. So let's get started with Frank for our commercial update. Frank?

Thanks, Rick. Let's begin with Slide 5. Remember, YUPELRI has indicated for the maintenance treatment of patients with COPD. It's the first and only once daily, nebulized, long-acting muscarinic antagonist that provides a full 24 hours of control for patients. While COVID-19 continues to affect the healthcare landscape, our business began to recover from the effects of the pandemic this quarter. In response to the new environment, our promotional strategy quickly pivoted to increased digital marketing investments, leveraging a hybrid selling model with virtual and in-person interactions. This evolution in our commercial model was on target with YUPELRI returning to growth this quarter. Despite the COVID-19 impact on COPD patients and prescribers, increasing numbers of hospitals are purchasing YUPELRI. Prescribers are becoming more familiar with the brand and YUPELRI is seeing increasing use in key patient types. The Theravance Biopharma and Mylan commercial teams were able to generate quarter-over-quarter net sales growth of 22%, making YUPELRI profitable on a brand basis this quarter for Theravance Biopharma. The team has risen to every challenge presented by COVID-19 with innovation and safety always at the forefront for themselves, the healthcare professional and the patient. Let's move to Slide 6. Theravance Biopharma's implied 35% share of net sales for YUPELRI during Quarter 3 of 2020 was $13 million, up from $5.8 million in Quarter 3 of 2019. Going forward, we will report this metric of our implied 35% share of net sales for YUPELRI. We continue to track key performance metrics, including formulary reviews and wins, patient uptake and market access. Since launch, a total of 560 formulary and non-formulary accounts have ordered YUPELRI, and more than two-thirds of these accounts have reordered at least once. Launched-to-date, formulary wins totaled 191, covering over 360 of these accounts with a formulary win rate of…

Thanks, Frank. Moving to Slide 7, I'll provide a brief update on our pipeline. Like the commercial team that Frank spoke about, the clinical development teams have adopted innovative approaches in response to the pandemic. As an example, for ampreloxetine, our once-daily norepinephrine reuptake inhibitor in development for the treatment of patients with symptomatic NOH, we worked with the US FDA to decentralize our ongoing trials to allow this fragile patient population to participate in the program without traveling to the clinic. The decentralized approach is now being rolled out across the Phase 3 program in the US and globally in an effort to overcome the challenges that patients face regarding travel, healthcare access and participation in clinical trials. We continue to see high rates of site activity, screening and randomization into the program, and we expect to report results from the 4-week SEQUOIA study in the third quarter of 2021. Turning to TD-1473, our gut-selective pan-JAK inhibitor for the treatment of inflammatory bowel disease in partnership with Janssen. We have two studies in progress. RHEA is a Phase 2b/3 study or 1473 in patients with moderately to severely active ulcerative colitis and DIONE is a Phase 2 study in patients with Crohn's disease. We expect the ulcerative colitis study and the Crohn's study to read out in the third quarter of 2021. Turning to Slide 8. TD-8236, our lung-selective inhaled pan-JAK inhibitor in development for the treatment of inflammatory lung diseases including steroid resistant asthma. We completed Part C of the study, enrolling the asthma patients that we believe will benefit most from 8236, namely patients with moderate to severe asthma who remain poorly controlled despite being treated with inhaled steroids. We deliberately enrolled patients with allergic or T2-dominant as well as non-allergic or non-T2-dominant asthma, knowing that patients…

Thanks, Brett. And before moving into our financials, let's start with an update on GSK's TRELEGY. As a reminder, TRELEGY is the first and only once-daily single inhaler triple combination therapy approved for the treatment of COPD and recently approved for the treatment of asthma. After the September 9th FDA approval, GSK immediately initiated commercial activities to support the US launch of this additional indication. Also, as a reminder, Theravance Biopharma received an upward tiering royalties on global net sales of TRELEGY. At present, 75% of the income from our economic interest is pledged to service principal and interest payments on our outstanding non-recourse notes, and the remaining 25% of income is retained by us. During GSK's recent earnings call, they noted that TRELEGY continued to grow nicely. Quarterly net sales up 45% year-over-year, generating global quarterly net sales of USD252 million. GSK also noted it received a CRL from the FDA for their separate supplemental NDA filing that had sought to secure an all-cause mortality benefit claim in COPD. Moving to Slide 19. I'll begin with the financial highlights for the third quarter and then close with our updated 2020 financial guidance. Total revenue for the third quarter 2020 was $18.3 million as compared to $12.4 million for Q3 2019. And the operating loss was $76.6 million or $61.1 million, excluding share-based compensation expense. This compares to $65.2 million and $52.2 million for the same respective figures during Q3 2019. We ended the quarter with cash, cash equivalents and marketable securities of $358.3 million. And regarding updated 2020 financial guidance, we are modifying our full year 2020 operating loss, excluding share-based compensation to a range of $225 million to $235 million compared to our previous range of $205 million to $225 million. This increase in the top end of the range is due predominantly to the acceleration of TD-0903 into the clinic. And as a reminder, our operating loss guidance does not include royalty income for TRELEGY, which we recognize in our statement of operations as income from investment in TRC LLC, nor does our guidance include benefits from potential future business development activities. Finally, our guidance could change due to factors such as the timing and cost of clinical development programs, ongoing COVID-19 risks and challenges or other operating factors that could impact our full year 2020 financial results. With that, I'll turn the call back to Rick for closing remarks.

Thanks, Andrew. I sincerely appreciate the work of Theravance Biopharma team and what they've been able to deliver for their passion, dedication and their commitment. Our teams focused on execution across all disciplines, continuing to make progress and carrying momentum forward through these last few months of the year and onto and into 2021. With YUPELRI now profitable on a brand basis and TRELEGY continuing to lead the market as a single inhaler triple therapy, growing market share and the potential to increase growth with the new asthma indication, our financial complexion is changing. Adding to the financial dynamic is a clear pathway that we've now laid out for our late-stage clinical program readouts, advancing our pioneering science that may lead to transformative medicines that have the potential to impact the lives of patients significantly. With data coming in NOH, ulcerative colitis, Crohn's disease and lung hyperinflammation due to COVID-19, over the next few quarters with Janssen's potential opt-in expected in late 2021 for TD-1473, and then Janssen covering the next phase of trial expenditures, the financial outlook is increasingly appealing. Theravance Biopharma is an attractive combination of future revenue, pioneering science and rare disease and IBD catalysts in 2021 with a research development engine that harnesses our deep knowledge of chemistry and biology to develop organ-selective treatments that target where the disease is active. I couldn't be more optimistic and excited about 2021 and beyond. And I'll now hand the call back to the operator for questions.

Thank you, sir. [Operator Instructions] We have our first question from the line of Marc Frahm with Cowen.

Hey. Thanks for taking my questions. First, just to start off with the TD-1473 and refinement of when that data would come. Can you just talk about what assumptions are kind of built into getting to that Q3 data release? And you know has there been increased COVID impact in the last few months since the last earnings call when you thought things have recovered?

Thanks, Marc. I'll make a couple of comments and shift it over to Brett. I think that you know over the last few months, we've seen significant sort of continuation of an uptick in the UC study as well as Crohn's study. Our teams have gotten much more agile, I believe, in handling challenges that COVID may pose in any given site around the world. And I think it's the combination of the progress to-date that, plus the ability to handle the challenges that COVID provides on a site-by-site basis that gave rise to the guidance of the third quarter. And again, we'd expect those to be two separate releases. But Brett, do you want to add to that?

Thanks, Rick. And Marc, thanks for the question. Just to add to what Rick was describing, you're right, certainly in the first wave of the pandemic, we did experience a disruption from COVID. And you may recall that we took a conscious decision ourselves to suspend screening for new patients coming in. That lasted about four weeks. But as we were able to open individual sites, we did see a reemergence of activity. Now that didn't occur overnight. We saw a sort of a ramping up of productivity through the remainder of the summer. I think it's fair to say that now we're seeing levels of activity that resemble those that we saw pre-pandemic. But we are conscious that the upcoming winter may present challenges in isolated pockets around the world. We are seeing lockdowns, for example, in parts of Europe. We've compensated for that on a number of fronts. Obviously, I think the sites are more prepared this time to deal with the challenges. PPE and so on, is much more freely available. Testing is more freely available. We also have a large network of sites in more than 20 countries around the world on the 1473 program. So we think even if there are isolated pockets, we should still be able to compensate for that with productivity in other parts of the world. The remaining parts of the timeline though that you were asking to that lead to the third quarter relate to the lead times. Once we enroll the last patient, it takes two months for us to follow the last patient through the UC study and three months to follow the last patient through the Crohn's study, because that's the duration of treatment. And then the last activity that we have really it focuses on cleaning the data and on analyzing it. And there are some challenges that have been presented with COVID or by COVID in terms of getting the appropriate people to the sites to monitor the studies. We are dealing with that. But certainly, we want to make sure that we're emphasizing the quality of the data as we clean those final patients. And so that's also incorporated into those timelines that lead to the third quarter predictions.

Okay, great. Thanks for that details. And then maybe on 8236, you studied some other doses, I believe in trials tonight as well. Did you see a dose response on FeNO across those other doses? And then maybe can you speak to the kind of weight of evidence that of longer-term you know success on longer-term trials on things like exacerbations for FeNO versus the LAR within this drug?

Brett, do you want to take that?

Thanks, Rick. So Marc, you asked about other doses. You may recall that in the Part B of the study, we looked at a range of doses from 150 micrograms all the way up to 4,000 micrograms in mild asthmatics. These are not patients with hugely elevated levels to begin with, but we did see evidence of some dose dependency. The 150-microgram dose did not produce much aberration in nitric oxide. Those levels remained high in those patients. But as we push to doses above 150 micrograms, we began to see improvements. And there were actually very little difference between the 1,500 and the 4,000 micrograms, which led us to the selection of doses that we took. So we have seen some dose dependency. And in fact, you see again in the LAR study in the Lung Allergen Challenge that the 150-microgram dose doesn't produce any changes in nitric oxide, whereas the 1,500 microgram dose does. So I think that reproducibility gives us some confidence that we are engaging in biology. We're just not having the effect on the late asthmatic response. In terms of weighted evidence, it is dependent on the mechanism as to whether nitric oxide or LAR is predictive of protecting against exacerbations in the long-term. As I mentioned, NUCALA, as an example, doesn't modify expression of the LAR that actually has been approved for reducing exacerbations in moderate to severe asthmatics. And there are other therapies like inhaled corticosteroids that do both. They suppress nitric oxide and improve on LAR. So it's mechanism-dependent.

Okay, thank you.

Your next question comes from the line of Anupam Rama with JPMorgan.

Hey, guys. Thanks for taking our questions. This is Matt Bannon on for Anupam. So just following up on your response there, Brett, you mentioned that dose responses kind of taper out between 1,500 and 4,000 micrograms in terms of FeNO response. But is there any reason to believe that there might be some threshold to overcome in terms of the late asthmatic response, in which case you could use one of those higher doses in another follow-on study? I know that some drugs like NUCALA have been improved in the absence of this type of data, but that might be interesting. And secondly, we noticed that GSK received a Complete Response Letter from the FDA for including all-cause mortality on TRELEGY COPD label. So just wondering if GSK has informed you of the nature of the CRL and if they plan on resubmitting? Thanks so much.

Yeah, I'll take the GSK question. No, they haven't informed us on the nature of the CRL. Brett can comment on dose dependency of LAR. Just before Brett does, I'd say you know that this is the first JAK inhibitor, inhaled JAK inhibitor that's been in this type of a study. And when you look across the range of mechanisms that have been evaluated in this type of study, you see the relative to LAC, you see a range of outcomes, something like an anti-TSLP antibody you know not showing much of an effect at 42 days in Lung Allergen Challenge study. But at 84 days, showing a significant effect. So there's a number of different things probably going on here. Part of it might be dosed, but I think there's other parameters. Brett?

Thanks, Rick and absolutely I agree. You know the lack of precedents in this space was something that we were aware of you know coming into the Lung Allergen Challenge. The threshold idea is a very interesting one matter. And obviously, that's something that we're considering. I think it would be premature for us to speculate on exactly what the root cause is right now, because we're continuing to assimilate the data. We've got additional data coming through particularly from our moderate-to-severe asthmatics, the cytokine data, the gene expression data, and I think that will give us a sense of modulation across a range of other parameters. So we're certainly going to be diving into that. And we do expect to report on that data. We haven't given exact timing for that, but we certainly do want to put this out in the public domain, probably through a scientific congress in the course of next year.

Great. We'll look forward to it. Thanks, guys.

Your next question comes from the line of Vikram Purohit with Morgan Stanley.

Hi. Thanks for taking my question. I had a question on the royalty dispute on TRELEGY ELLIPTA royalties with Innoviva. Could you just walk us through the nature of the current dispute? And also talk about what might be the central issue to be discussed during the arbitration proceeding that your release mentioned that's scheduled for the first quarter of '21?

Sure. Yeah, thanks for the question. The dispute, as we outlined it that I think at June, early June 8-K, had to do with plan to invest in two private companies with funds from the LLC. We said at that time in June that based on the plans that were laid out, we might dispute that, and the dispute mechanism in the LLC really is arbitration. Now also in the LLC agreement, there's high levels of confidentiality with regard to, sort of the process of arbitration, but what we can say is, what we did say, which is that, you know we would expect the arbitration to be concluded in the first quarter of the year. And you know beyond that, I would point people to the LLC agreement, which is filed unredacted as part of the 2014 separation papers between Theravance Biopharma and the company that's now Innoviva. So that's about what I can say. We're going to obviously protect our rights to the royalty stream to the utmost.

Okay, understood. Thank you for that. And as a follow-up on a separate topic. On the ampreloxetine Phase 3 study, could you talk a bit about the effect that you might be seeing already from the protocol adjustment that you announced last quarter? And if that's been positive for the study so far?

Yeah. I think the protocol adjustments we announced last quarter are just beginning to take shape. But clearly, the performance of the study you know in the third quarter and particularly in the late third quarter, showed significant improvement. I think this is both because of you know sort of just the underlying dynamics of the study and the maturation of the study in the clinical sites and also you know the ongoing work, both decentralization and other work that we're doing with the sites. Brett, any other comments on that?

Just to expand on that, you know we've been really thoroughly pleased with the response of our investigators. So we thought initially might be - sort of resistance to ideas of taking those patients out of the clinics, but the opposite has been true. We've actually had investigators really embrace this. The protocols now are flexible in how they can choose to see their patients at the clinic or at home. What we've also realized is that, they're able to access a type of patient who probably was not previously willing to come into the clinic to participate in a clinical trial. So we think it's actually improving not only the ability of the sites to perform, but it's also increasing our ability to access patients that we would not otherwise have been recruiting. So we do think that this is really value-added and we've been very pleased with the response of our clinical trial units.

Okay, got it. Thanks for that.

Your next question comes from the line of Douglas Tsao with H.C. Wainwright.

Hi. Good afternoon, and thanks for taking the questions. Just you know maybe on 8236, you know, it seems - it sounds like disappointing that we didn't see an effect in the LAR study. But obviously, the effect on - FeNO has been pretty consistent and pretty strong. So just maybe help clarify sort of how you're thinking about the path forward you know in terms of the milestones or sort of additional work that we can do because, obviously, you know I don't think the LAR is necessarily you know a gating item for approval, right? You know it certainly seems like there's potentially a path forward for the asset, and so just clarity on that would be helpful.

Yeah, Doug, thanks. I think you know, as Brett had mentioned, we've got a lot of data left to analyze, particularly out of the Phase 1c patient, moderate to severe patient cohort, which is a target - a primary target of course of the medicine. So we'll be doing that over the next couple of months. And I think it's important to understand that you know we've got 8236 that we've just finished up with the 1c in the LAR. And on the other hand, we've got a large study that's ongoing with a nebulized JAK inhibitor in a hyperinflammatory state in the lung. And I think both sets of data are going to provide really a rich set of information on the use of JAK inhibitors in inflammatory states, because, you know, of course, in something like 0903, we'll be looking at blood cytokine levels, biomarkers for inflammation that contribute to lung injury. And we know today that the hyperinflammatory state associated with COVID is associated with elevated serum markers of interferon as well as a cascade of - interleukins and chemokines that drive ALI. So I think when you look at the very large set of information from the 1c to the LAR to the hyperinflammation state that we're treating in COVID, there's going to be a rich set of data to evaluate that will guide us on the next steps for 8236 and then also obviously for 0903.

And so Rick, would it be fair to say that perhaps by the time you report 1Q earnings next year, you might have a little bit more of a roadmap for 8236 as well as 0903?

Yeah, I think we said that we would be reporting the Phase 2 data of 0903 in the second quarter. And you know depending on the timing of the earnings call, we should have finished all of the evaluation of the other biomarkers in the Phase 1c study as well as the gene expression data. So I think we'll have a much better understanding of this you know how the effects of the JAK inhibitors in the lung. Brett, do you want to add anything?

Just that we're going to be really drawing on external expertise as well. You know we've got a panel of experts externally who can help us interpret other mechanisms as well as this one, and it's our plan to incorporate their thinking into our planning as well. So not much else to add beyond that.

Yeah. I think that this is just a you know very exciting time for us, because you know an inhaled JAK inhibitor you know hasn't been administered to humans to treat inflammation. And the information that we're gaining is really the first set of information that people have been able to attain. And therefore, I think it really puts us on the cutting-edge of how to use a tool like a JAK inhibitor in inflammatory states of the lung.

Absolutely. Thank you so much for the additional information.

Yeah.

Our next question comes from the line of Alan Carr with Needham & Company.

Hi, and thanks for taking my questions. Just a follow-on this a little bit more, Brett. What do you think you'd need to see out of the biomarker data and gene expression data that has convinced you that more work you know that another Phase 2 would be appropriate here?

Brett, do you want to take that?

Thanks, Rick and hi, Alan. You know I think for me, the cytokine data will be particularly important. We have expected to see down-regulation of key cytokines that might be implicated in the inflammatory cascade, the [indiscernible] that these moderate to severe asthmatics have. The limitation with the allergen challenge study is that it's not in that population. It's in a milder population. And what we're effectively trying to do is to blunt a very abnormal insult in the lung. These patients inhaled huge amounts of allergen and suddenly get the insult in the lung. Although it's experimental, it's not quite how it works in the real world with moderate to severe. So we do want to look at both the gene expression data and particularly the cytokines in these moderate to severe as to see whether we are down-regulating the expression of those mediators. Bear in mind, we're treating for slightly longer 14 days in the allergen challenge, but still the insult is much harder. I think even after seven days in the moderate to severe group in Part C, we should be able to untangle some of these pathways with a bit more detail.

And then with respect to your COVID trial, I guess, maybe a similar question there. What are you hoping to see from that in the second quarter that would justify more development there? And thinking in the context of other competitive programs.

Well, again, I'd say the COVID study is a proxy for an treating an acute hyperinflammatory state of the lung. And while - you know we're using the SARS-CoV-2 infection to effectively identify the patients with the acute hyperinflammatory state, the similar states occur in a number of different acute diseases. So I think you know our ability to really improve things like - you know improving oxygen, reduction in hospital stay, prevention of progression into mechanical ventilation, and then the exploratory data set of blood cytokine levels and biomarkers of inflammation and lung injury will also be very important and providing us a picture of what 0903 can do in this sort of a condition. Brett?

Just to add to what Rick was saying, Alan, you know with - we're encouraged by the signals that have already been reported with baricitinib, for example, as a JAK inhibitor that's been used in COVID-19. The NIAID study that recently reported one of the ACCT [sic - ACTT] studies show the additional improvements in terms of time to recovery and discharge from hospital when baricitinib was added to remdesivir. So over and above the benefits that remdesivir was demonstrating, baricitinib seems to have done more. And that's encouraging for the mechanism. We actually think that with 0903, we'll get much higher concentrations of drug in the lung relative to an oral dose of baricitinib. So we think that the opportunity to dampen that cytokine storm in its source of origin, you know that the pulmonary lining is effectively where the cytokine storm is triggered. We think that, that should bode well for 0903's efficacy. And then recognizing you know that baricitinib is an oral therapy with systemic effects, we don't believe that we'll run that risk with 0903. We don't think we'll see the risk of opportunistic infections that baricitinib would have or indeed the predisposition to thrombosis, which we know systemic JAK inhibitors have. That's particularly important in COVID-19, because the disease itself appears to increase coagulation states. So being able to target the lung with an organ-selective approach with a lung-selective approach is something we're really quite enthusiastic about. We think that this has got real potential in COVID-19.

Thanks for taking my questions.

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

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

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