Q4 2024 Earnings Summary
- Theravance Biopharma is experiencing significant growth in hospital sales of YUPELRI, with hospital doses up 49% year-over-year in Q4 2024, driven by effective execution and strategic focus on large hospital systems. This has resulted in a doubling of market share in accounts with therapeutic interchange protocols, indicating strong future growth potential.
- The company is making strong progress with Ampreloxetine, having received positive feedback from the FDA during a recent Type C meeting, reaffirming alignment on key requirements for approval. Theravance is preparing for an expedited NDA filing and plans to request priority review, which could accelerate time to market upon positive results from the CYPRESS study.
- Theravance anticipates approval of YUPELRI in China by mid-2026, following the submission made in June 2024, which would trigger a $7.5 million milestone and earn high royalties of 14% to 20% on potential sales, providing a new revenue stream and expanding the global footprint of YUPELRI.
- Dependence on Ampreloxetine's Success: Theravance Biopharma's future growth is heavily reliant on the success of the CYPRESS study for Ampreloxetine. The company's plans to complete the NDA filing and request priority review hinge on positive study results. Investing in NDA preparations and pre-launch activities before knowing the study outcome introduces significant risk if the results are unfavorable.
- Uncertainty in Non-Hospital YUPELRI Sales Performance: Analysts expressed concerns over the lack of detailed disclosure regarding non-hospital sales of YUPELRI, which account for approximately 90% of the total brand volume. The company's focus on hospital sales growth, which represents only about 10% of volume, may indicate potential underlying issues or slower growth in the core non-hospital market.
- Increased SG&A Expenses Amid Uncertainty: Despite no planned increase in full-time employees prior to the CYPRESS data readout, Theravance expects SG&A expenses to rise to a range of $50 million to $60 million in 2025, up from $53 million in 2024. This increase is due to measured investments in Ampreloxetine pre-launch activities, which could strain financials if the CYPRESS study does not yield positive results.
| Metric | YoY Change | Reason |
|---|---|---|
Total Revenues | +6.7% (from $17,565K to $18,754K) | Revenue increased modestly as the rise in total revenues was largely driven by higher Viatris Collaboration revenue, which built on previous increases in YUPELRI net sales and overall market traction. |
Viatris Collaboration Revenue | Increased from $17,360K to $18,754K | The growth reflects continued strong performance in YUPELRI sales; this incremental boost in collaborative revenue builds on prior success and higher customer demand noted in earlier periods. |
Total Expenses | +17%+ (from $23,805K to $27,954K) | Operating expenses surged significantly due to increases in both R&D (up 14%) and SG&A expenses (up nearly 19%), which pressure margins despite the modest revenue gains seen in previous periods. |
Net Loss | +82% (from $8,510K to $15,527K) | Net loss widened dramatically as the substantial rise in operating costs outpaced revenue growth, compounding the impact of higher R&D and SG&A spending from earlier trends into a significantly larger loss. |
Research & Development Expenses | +14% (from $8,313K to $9,453K) | R&D spending increased due to ongoing investments in clinical studies and research initiatives, indicating a continued commitment to product development even after previous periods of streamlining. |
Selling, General & Administrative Expenses | +19% (from $15,492K to $18,501K) | SG&A costs rose notably because of elevated pre-launch medical affairs and commercialization efforts, partly countered by cost-saving measures in G&A; however, the net effect was a significant expense increase relative to the previous year. |
Cash and Cash Equivalents | -4.5% (from $39,545K to $37,797K) | Cash balances declined moderately as a result of ongoing capital management activities such as share repurchases and other financing uses consistent with the company’s previous period strategies. |
Short-term Marketable Securities | -19.5% (from $62,881K to $50,553K) | A substantial drop in marketable securities suggests a shift in the investment strategy or asset reallocation, impacting liquidity compared to the previous period’s higher levels. |
| Metric | Period | Previous Guidance | Current Guidance | Change |
|---|---|---|---|---|
R&D Expense (excl. SBC) | FY 2025 | no prior guidance | Expected to be between $32 million and $38 million | no prior guidance |
SG&A Expense (excl. SBC) | FY 2025 | no prior guidance | Expected to be between $50 million and $60 million | no prior guidance |
Share-Based Compensation | FY 2025 | no prior guidance | Expected to decrease year-over-year to between $18 million and $20 million | no prior guidance |
Non-GAAP Losses | FY 2025 | no prior guidance | Expected to be similar to 2024 levels, at $16 million | no prior guidance |
Cash Burn | FY 2025 | no prior guidance | Expected to be similar to 2024 levels, at $14 million | no prior guidance |
TRELEGY Milestones Accounting | FY 2025 | no prior guidance | No other income will be recognized in 2024 and 2025 unless cumulative milestones exceed $194 million; achieving the remaining $150 million will result in $6 million of other income in 2026 | no prior guidance |
| Topic | Previous Mentions | Current Period | Trend |
|---|---|---|---|
YUPELRI Sales Performance and Channel Dynamics | Consistently reported across Q1–Q3 with strong net sales, robust volume growth, improved hospital and community channel performance, and evolving pricing strategies ( ) | Q4 highlights net sales of $67 million (10% YOY growth), a 49% YOY increase in hospital doses, and favorable pricing due to an improved channel mix ( ) | Consistent strong growth with continued positive sentiment and further refinement of channel dynamics. |
Ampreloxetine Development and CYPRESS Study Outcomes | Updates in Q1–Q3 emphasized dependency on CYPRESS study results, pre-launch investment challenges, noted delays in Q2, and positive regulatory alignment in Q3 ( ) | Q4 notes an expedited NDA filing plan contingent on favorable CYPRESS results, on-track enrollment, and clearer regulatory milestones with no mention of prior delays ( ) | Progressing steadily with improved regulatory outlook and greater timeline clarity. |
Regulatory Milestones and International Expansion | Earlier quarters (Q1–Q3) mentioned China regulatory filings, anticipated milestone payments, and potential TRELEGY milestones, though with less detail ( ) | Q4 provides more specifics, noting a China approval timeline (mid-2026) that triggers a $7.5 million milestone along with defined royalty ranges, plus additional TRELEGY milestone opportunities ( ) | An increased focus with greater specificity on international opportunities and milestone-driven value. |
Pricing Dynamics and Revenue Realization Challenges | Q2 reported pricing headwinds due to channel mix shifts and corrective moves; Q3 indicated sequential ASP improvements, while Q1 had largely positive sentiment with little mention of issues ( ) | Q4 emphasizes that corrective pricing measures and improved channel mix have resulted in favorable pricing dynamics, with record net sales, although seasonal dips are anticipated ( ) | A shift from earlier pricing challenges toward improved realization resulting from effective corrective strategies. |
Operational Efficiency and Cost Management | Q1 highlighted operating leverage improvements with disciplined expense management; Q2 and Q3 reported stable or reduced SG&A and share‐based costs, reflecting effective cost control ( ) | Q4 indicates slight SG&A increases driven by measured investments (e.g., market research and prelaunch activities) while maintaining overall cost discipline and similar expected cash burn ( ) | Steady focus on efficiency with minor expense increases amid strategic investments, maintaining overall cost discipline. |
Litigation and Intellectual Property Concerns | Q2 noted ongoing litigation with eight litigants and the addition of a new patent in the FDA Orange Book ( ); other periods rarely mentioned this topic. | Q4 does not reference any litigation or IP concerns. | De-emphasized in the current period, suggesting these issues may be resolved or lower priority. |
Strategic Alternatives and Shareholder Value Initiatives | Only Q3 discussed the formation of a Strategic Review Committee (with independent directors and Lazard as an advisor) to explore unlocking asset value ( ) | Q4 does not mention any related initiatives. | Not recurring in Q4; emphasis appears to have shifted away from strategic alternatives. |
Competitive Landscape Pressures | Q3 mentioned emerging therapies (e.g., ensifentrine) and anecdotal reports of concomitant use with YUPELRI, indicating potential competitive dynamics ( ) | Q4 does not address any competitive landscape pressures such as emerging therapies. | This topic is not recurring in Q4, suggesting that competitive concerns may have diminished or become less of a focus. |
Cybersecurity Impact on Prescription Trends | Q1 highlighted a 9% decline in retail prescriptions linked to a cyber incident at Change Healthcare, with a subsequent rebound observed in April ( ) | Q4 does not mention cybersecurity or its impacts on prescription trends. | Previously raised issues appear to have been resolved, with no current impact on performance. |
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Ampreloxetine CYPRESS Trial
Q: What is the bar for success in the CYPRESS readout?
A: Management stated that a 1-point change in the OHSA composite score is considered clinically meaningful. Achieving a 1-point improvement that is statistically significant in patients during the randomized withdrawal would constitute success. They plan to hold off on increasing the size of the organization until after the CYPRESS data, investing in writing the NDA in 2025 to expedite filing if results are positive. -
YUPELRI Hospital Channel Growth
Q: Is the hospital channel growth sustainable into 2025?
A: The team is executing their strategy effectively, focusing on larger systems with therapeutic interchange upon initial formulary approval, which doubles market share in those accounts. Despite Q1 typically being a softer quarter, high hospital census due to RSV and flu provides a tailwind. They are pleased with the 49% growth in the hospital channel in Q4 and expect continued benefits from their strategy. , -
Gross to Net Improvements
Q: What's the outlook for gross to net improvements in 2025?
A: The company attributes improvements to contracting discipline and effective pricing strategy, coupled with an improved channel mix favoring higher-margin volumes. They had anticipated more progress in 2025 but are pleased with the current trajectory and expect continued improvement. -
YUPELRI in China
Q: What are the next steps for YUPELRI in China?
A: They are awaiting regulatory feedback from Viatris's submission. They expect a 2-year window from submission to approval, with planning assumptions based on this timeline. Approval would trigger a $7.5 million milestone and high royalties of 14%-20% on sales. The submission was made in June 2024, so approval is anticipated by mid-2026. -
Non-Hospital Sales and Trends
Q: What percentage of sales are non-hospital, and why are they declining?
A: The hospital business accounts for about 10% of total YUPELRI volume, while 90% comes from the community setting, including long-term care. Management indicated that non-hospital demand increased by 11% for the full year and is not declining. They focus on ensuring patients have a good experience in the hospital to continue therapy post-discharge. , -
Q4 Revenue Anomalies
Q: Were there any anomalies benefiting Q4 net revenue?
A: Management stated that year-end inventory levels were similar to previous years, and there was no unusual channel stocking. They believe the results reflect the team's execution and strategy. -
SG&A and OpEx for 2025
Q: Will SG&A increase ahead of CYPRESS data?
A: SG&A is increasing modestly in 2025, with the midpoint guidance at $55 million, up from $53 million in 2024. The company is making measured investments in medical affairs, market access, and market research, but no incremental FTEs are planned prior to the CYPRESS data readout.