Theravance anticipates $150M in milestones as CYPRESS trial nears pivotal data readout

Earnings Call Insights: Theravance Biopharma, Inc. (TBPH) Q2 2025

MANAGEMENT VIEW

* CEO Rick E. Winningham highlighted "an excellent quarter, underscored by disciplined execution across our commercial and development organizations, which drove continued momentum in both YUPELRI and ampreloxetine." Winningham announced the completion of a $225 million sale of the remaining royalty interest in TRELEGY to GSK, describing it as "the first major outcome from our strategic review committee's efforts to unlock shareholder value." He noted YUPELRI net sales reached approximately $66 million, with continued demand growth and favorable net pricing, and reported the product's approval in China, triggering a $7.5 million milestone payment.
* Winningham emphasized the progressing CYPRESS Phase III trial for ampreloxetine, stating enrollment in the open-label portion would complete in the next couple of weeks and top line data is expected approximately six months after. He added, "We ended the quarter with approximately $340 million in cash and no debt. Our operations remain near cash neutral."
* Rhonda F. Farnum, Chief Business Officer, stated "Second quarter net sales increased 22% year-over-year to $66.3 million, our highest Q2 result since launch," and highlighted hospital volume increased 31% compared to Q2 2024. Farnum also discussed YUPELRI's China approval, emphasizing that launch and commercialization will be led by Viatris, with no commercial cost to Theravance.
* Farnum described a "mid-teen year-over-year net sales growth in Q2" for YUPELRI even without nonrecurring pricing benefits. She noted confidence in achieving the $250 million calendar year sales threshold required for a $25 million milestone payment.
* Aine Miller, Senior VP of Development, provided details on CYPRESS, highlighting its design and the role of an external enrollment committee to ensure consistent criteria application. Miller stated, "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."
* CFO Aziz Sawaf reported, "Collaboration revenue grew 31% year-over-year, driven by continued YUPELRI net sales growth, leading to improved brand level profit margins." Sawaf also stated, "Non-GAAP losses improved to $4.2 million compared to $6.3 million in prior year, excluding onetime items."

OUTLOOK

* Winningham indicated, "We are reaffirming all elements of our 2025 financial guidance." Sawaf added, "Excluding the impact of onetime 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."
* Sawaf commented on TRELEGY, "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." He projected an additional $100 million milestone in 2026.
* Farnum stated that no guidance would be given on YUPELRI's China launch timing but pledged to update as Viatris' commercialization plans develop.

FINANCIAL RESULTS

* Sawaf reported that GSK's Q2 sales for TRELEGY reached $1.1 billion, bringing year-to-date sales to approximately $2 billion. He emphasized recognition of a $7.5 million milestone for YUPELRI's China approval and $75 million of other income related to the TRELEGY royalty sale.
* Sawaf stated, "We ended the quarter with approximately $340 million in cash. Excluding large onetime items, cash burn for the quarter was approximately $3 million."
* Collaboration revenue for Q2 was over $17 million excluding the onetime pricing benefit, and share-based compensation expense decreased 16% year-over-year.

Q&A

* Douglas Dylan Tsao, H.C. Wainwright: Asked about factors behind better pull-through and channel mix optimization for YUPELRI. Farnum responded, "That move of volume that continues to move over to specialty pharmacy...is certainly driven by pricing in that channel, but more importantly, the persistency and the support patients receive."
* Tsao also asked about the role of specialty pharmacy in persistence. Farnum replied, "Yes. And dedicated outreach, dedicated personnel for follow-up...far better served relative to conventional retail pharmacy."
* Julian Reed Harrison, BTIG: Inquired about YUPELRI's China outlook and CYPRESS enrollment. Farnum deferred China launch details to Viatris. Miller stated, "We expect the split and the profile to look very similar" to past studies and said "our plan at the moment is to disclose all data at top line readout."
* Debanjana Chatterjee, JonesTrading: Asked about pricing for ampreloxetine and payer dynamics. Farnum responded that rare neuro drug launches average around $380,000 per year and referenced droxidopa at about $280,000 per year, adding that pricing decisions will follow CYPRESS data. On payer engagement, Farnum said, "We are already actively engaging payers...they've reacted very enthusiastically to wanting to learn about this important underserved patient population."
* Ellen Horste, TD Cowen: Asked about SG&A expense trajectory. Sawaf said, "I don't expect the SG&A number to increase at all" before CYPRESS data and that post-readout, SG&A will increase but with a targeted approach.
* David Reed Risinger, Leerink Partners: Questioned YUPELRI collaboration revenue leverage and CYPRESS primary endpoint duration. Sawaf explained, "I don't expect there to be a meaningful gap going forward between the collaboration revenue growth and the net sales growth." Miller confirmed durability is a "central theme" of CYPRESS and expects benefit stability for patients remaining on ampreloxetine.

SENTIMENT ANALYSIS

* Analysts expressed a generally positive tone, focusing on pull-through dynamics, commercialization plans, and ampreloxetine market opportunity, with probing on pricing and SG&A discipline. Their questions were constructive and detail-oriented.
* Management maintained a confident and optimistic tone in both prepared remarks and Q&A, reinforcing financial strength, commercial momentum, and the transformative potential of CYPRESS. Winningham and Farnum consistently articulated confidence, with phrases such as "We are confident that CYPRESS is well positioned" and "we remain committed to capital discipline."
* Compared to the previous quarter, both analysts and management signaled increased optimism and momentum, with management expressing greater confidence in upcoming catalysts and financial outlook.

QUARTER-OVER-QUARTER COMPARISON

* YUPELRI net sales growth accelerated from 6% in Q1 to 22% year-over-year in Q2, with hospital channel volume also surging.
* The company completed a $225 million royalty sale of TRELEGY this quarter, significantly boosting the balance sheet compared to Q1.
* Guidance language was reaffirmed, but the outlook for recurring non-GAAP losses and cash burn improved for the second half of 2025.
* Management's tone shifted from cautious optimism in Q1 to pronounced confidence in Q2, particularly regarding the CYPRESS trial and milestone prospects.
* Analysts in Q2 were more focused on channel dynamics, pricing, and SG&A, reflecting the company's progress toward key catalysts.

RISKS AND CONCERNS

* Management cited the timing of the CYPRESS data readout as a key focus, with ongoing attention to enrollment quality and patient retention strategies.
* No guidance yet on YUPELRI's China launch timing due to ongoing Viatris planning.
* Sawaf noted $27 million in taxes related to the TRELEGY royalty sale, fully accrued in Q2.
* No additional details were provided regarding Paragraph IV litigation status in this quarter.

FINAL TAKEAWAY

Theravance Biopharma enters the second half of 2025 with strong commercial growth, a bolstered balance sheet following the TRELEGY royalty sale, and mounting anticipation for the pivotal CYPRESS trial data. Management remains confident in achieving near-term milestones, driving value through disciplined execution, and advancing ampreloxetine as a potential first-in-class therapy for a high unmet need patient population. The company is positioned for a potential value inflection point as it approaches major clinical and financial catalysts in the coming months.

Read the full Earnings Call Transcript [https://seekingalpha.com/symbol/tbph/earnings/transcripts]

MORE ON THERAVANCE BIOPHARMA

* Theravance Biopharma, Inc. (TBPH) Q2 2025 Earnings Call Transcript [https://seekingalpha.com/article/4812832-theravance-biopharma-inc-tbph-q2-2025-earnings-call-transcript]
* Theravance Biopharma Q2 2025 Earnings Preview [https://seekingalpha.com/news/4483317-theravance-biopharma-q2-2025-earnings-preview]
* Theravance higher as China approves Viatris-partnered COPD therapy [https://seekingalpha.com/news/4462644-theravance-stock-rises-china-oks-yupelri]
* Seeking Alpha’s Quant Rating on Theravance Biopharma [https://seekingalpha.com/symbol/TBPH/ratings/quant-ratings]
* Historical earnings data for Theravance Biopharma [https://seekingalpha.com/symbol/TBPH/earnings]