Q2 2024 Earnings Summary
- Viatris has taken corrective measures to improve the pricing dynamics of YUPELRI, with significant pricing improvement expected in 2025 and beyond, which combined with continued demand growth should lead to increased net sales. ,
- The company has strengthened its intellectual property position on YUPELRI by adding a new patent listed in the FDA Orange Book and settling with four litigants in the ongoing Paragraph IV litigations, enhancing market exclusivity and supporting future sales growth.
- Increased hospital penetration of YUPELRI is key to maintaining a high rate of patient discharges on YUPELRI into the community, supporting continued volume growth and market share expansion.
- Delayed Enrollment and Data Readout for the CYPRESS Study: Theravance Biopharma announced a revision of the anticipated completion date for enrollment in the open-label portion of the CYPRESS study to mid-2025, with top-line data expected approximately six months later. This delay from the previously guided timeline could impact the company's ability to bring ampreloxetine to market as planned, potentially affecting future revenue growth.
- Stagnant YUPELRI Net Sales Despite Volume Growth: Despite reporting strong volume growth and increased demand for YUPELRI, net sales have remained flat at around $55 million per quarter over the last eight quarters. Pricing pressures resulting from shifts in channel mix have impacted net realized prices, and executives indicate that significant pricing improvements may not occur until 2025. This raises concerns about the company's ability to translate demand growth into revenue growth in the near term.
- Ongoing Litigation Risk for YUPELRI: The company is engaged in ongoing Paragraph IV litigations concerning YUPELRI, with a total of eight litigants involved. The uncertainty surrounding the outcome of these lawsuits may pose risks to YUPELRI's patent protection and future revenue streams, potentially impacting the company's financial stability.
-
YUPELRI Revenue Growth
Q: What gives confidence in YUPELRI revenue growth for 2025?
A: Despite recent flat sales, management is confident in revenue growth for 2025, driven by continued demand growth and actions taken by Viatris to improve pricing dynamics. While there might be minor improvements in the second half of 2024, significant pricing improvement is expected in 2025. The brand's volume is growing, and stabilizing and improving price should boost net sales. -
Channel Mix Impact
Q: How does channel mix shift affect YUPELRI's pricing and sales?
A: The shift in channel mix has put pressure on gross to net sales for YUPELRI in the first two quarters of 2024. Different channels have varied discounting ranges, affecting the net realized price. Viatris has taken corrective measures aiming for significant pricing improvement in 2025 and beyond. Continued demand growth and slight pricing improvements are expected to increase net sales in the second half relative to Q2 2024 actuals. -
CYPRESS Study Timeline
Q: When will the CYPRESS study data be available?
A: Enrollment in the open-label portion of the CYPRESS study is expected to complete in mid-2025. Top-line data is anticipated approximately 6 months later, pending sufficient patients progressing to achieve 60 evaluable patients in the randomized withdrawal portion. The data release would therefore likely be in early 2026. -
YUPELRI Patent Litigation
Q: What is the update on Paragraph IV litigations for YUPELRI?
A: Theravance has settled with four original litigants and continues litigation with eight others—seven in New Jersey and one in Pennsylvania. Additionally, Theravance has added another patent for YUPELRI into the Orange Book, strengthening its intellectual property portfolio. -
China Pricing Dynamics
Q: How should we think about YUPELRI's pricing in China?
A: Management cannot comment on pricing dynamics in China at this time. Viatris is expected to provide more information as they approach approval and complete the regulatory process in China.
Research analysts covering Theravance Biopharma.