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Theravance (TBPH) Q1 Earnings Miss, Revenues Beat Estimates

Zacks Equity Research
·5 min read

Theravance Biopharma, Inc. TBPH incurred an adjusted loss of $1.14 per share in first-quarter 2020, wider than the Zacks Consensus Estimate of $1.06 but narrower than the year-ago loss of $1.32.

Adjusted loss in the quarter excluded a loss on extinguishment of debt.

However, total revenues of $19.9 million in the quarter beat the Zacks Consensus Estimate of $18 million. Revenues rose significantly year over year, mainly owing to higher revenues from the collaboration agreements with Mylan MYL and Johnson & Johnson JNJ.

Total revenues in the first quarter comprised collaboration revenues worth $6.6 million from Janssen, a wholly owned subsidiary of J&J, and $11.7 million received from Mylan in relation to Yupelri (revefenacin). Total revenues also included licensing revenues of $1.6 million.

Notably, Theravance has a collaboration deal with Mylan for the development and commercialization of Yupelri approved by the FDA in November 2018. The drug is used for maintenance treatment of adults with chronic obstructive pulmonary disease (COPD). Theravance and Mylan formally launched their sales and marketing efforts for Yupelri in early 2019 and the product witnessed a strong initial sales surge thereafter.

On the first-quarter conference call, management stated that Yupelri witnessed a strong customer acceptance and brand performance across key market metrics. The company also informed that approximately 40,000 patients were prescribed Yupelri since its launch through the first quarter 2020.

Currently, no disruption of supply is expected for Yupelri due to the COVID-19 pandemic. However, the company believes that Yupelri sales could be affected by the COVID-19 outbreak during the second quarter of 2020.

Per the company, Yupelri achieved 87% share of the nebulized LAMA market and a 13.7% stake in the long-acting nebulized market including the DME market as of January 2020.

Shares of Theravance have gained 8.7% in the year so far against the industry’s decrease of 9.9%.

Quarter in Detail

Research & development expenses were $66 million, up 22.6% from the year-ago quarter, primarily due to higher external cost pertaining to pipeline development.

Selling, general & administrative expenses rose 4.3% to $26.3 million due to higher share-based compensation and employee-related expenses.

As of Mar 31 2020, Theravance had cash, cash equivalents, marketable securities worth $492.1 million compared with $285.8 million as of Dec 31, 2019.

Update on Pipeline and Coronavirus Response

Theravance holds an economic interest in royalties earned from GlaxoSmithKline GSK on triple combination COPD treatment Trelegy Ellipta’s global sales. In the first quarter, Glaxo recorded sales of $249 million from Trelegy Ellipta. Theravance is eligible to receive 5.5-8.5% tiered royalties on the product's worldwide net sales.

Due to the coronavirus (COVID-19) impact, Theravance expects some delays in its clinical programs and patient enrollment in studies.

The company has a collaboration pact with Janssen to develop its JAK inhibitor, TD-1473, for the treatment of inflammatory intestinal diseases. A phase II study on TD-1473 for treating Crohn's disease and a phase IIb/III study for ulcerative colitis are underway. Data from the phase IIb portion of the ulcerative colitis and phase II Crohn's disease studies are now expected in 2021, which was earlier awaited in late 2020.

Theravance is also developing TD-5202 (gut-selective irreversible JAK3 inhibitor) in a phase I study for addressing inflammatory intestinal diseases. In February 2020, the company announced encouraging results from the phase I study. Data from the single-ascending dose and multiple-ascending dose studies, which evaluated the safety and tolerability of TD-5202, showed that TD-5202 was generally well-tolerated in healthy patients.

Theravance is evaluating ampreloxetine (TD-9855) in two phase III programs for treating patients with symptomatic neurogenic orthostatic hypotension (nOH).

The company is developing the inhaled, lung-selective pan-Janus kinase (JAK) inhibitor, TD-8236, in a phase I study for treating inflammatory lung diseases with minimal systemic exposure. In December 2019, it dosed the first patient in a phase II allergen challenge study on TD-8236 to address inflammatory lung diseases with data from the same now expected in the second half of the year. This was earlier pending for mid-2020.

Meanwhile, in April 2020, Theravance dosed the first healthy volunteer in a phase I study evaluating its lung-selective nebulized Janus kinase inhibitor, TD-0903, for the potential treatment of hospitalized patients with Acute Lung Injury (ALI) caused by COVID-19.

2020 Outlook

Theravance maintained its financial guidance for 2020.

For the full year, the company anticipates operating loss (excluding non-cash share-based compensation) in the range of $205-$225 million.

Theravance Biopharma Inc Price, Consensus and EPS Surprise

Theravance Biopharma Inc Price, Consensus and EPS Surprise
Theravance Biopharma Inc Price, Consensus and EPS Surprise

Theravance Biopharma Inc price-consensus-eps-surprise-chart | Theravance Biopharma Inc Quote

Zacks Rank

Theravance currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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