Document and Entity Information
Document and Entity Information - shares | 6 Months Ended | |
Jun. 30, 2022 | Aug. 01, 2022 | |
Document and Entity Information | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Jun. 30, 2022 | |
Document Transition Report | false | |
Entity File Number | 001-36033 | |
Entity Registrant Name | THERAVANCE BIOPHARMA, INC. | |
Entity Incorporation, State or Country Code | KY | |
Entity Tax Identification Number | 98-1226628 | |
Entity Address, Address Line One | PO Box 309 | |
Entity Address, Address Line Two | Ugland House, South Church Street | |
Entity Address, City or Town | George Town, Grand Cayman | |
Entity Address, Country | KY | |
Entity Address, Postal Zip Code | KY1-1104 | |
City Area Code | 650 | |
Local Phone Number | 808-6000 | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Title of 12(b) Security | Ordinary Share $0.00001 Par Value | |
Trading Symbol | TBPH | |
Security Exchange Name | NASDAQ | |
Entity Common Stock, Shares Outstanding | 76,427,244 | |
Entity Central Index Key | 0001583107 | |
Current Fiscal Year End Date | --12-31 | |
Document Fiscal Year Focus | 2022 | |
Document Fiscal Period Focus | Q2 | |
Amendment Flag | false |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Jun. 30, 2022 | Dec. 31, 2021 |
Current assets: | ||
Cash and cash equivalents | $ 87,292 | $ 89,959 |
Short-term marketable securities | 45,558 | 83,506 |
Receivables from collaborative arrangements | 12,488 | 14,065 |
Amounts due from TRC, LLC | 43,534 | |
Prepaid clinical and development services | 2,311 | 10,245 |
Other prepaid and current assets | 7,080 | 8,561 |
Total current assets | 154,729 | 249,870 |
Property and equipment, net | 12,531 | 13,657 |
Operating lease assets | 41,112 | 39,690 |
Equity in net assets of TRC, LLC | 148,250 | 67,537 |
Restricted cash | 836 | 837 |
Other assets | 3,303 | 3,228 |
Total assets | 360,761 | 374,819 |
Current liabilities: | ||
Accounts payable | 3,074 | 3,098 |
Accrued personnel-related expenses | 6,958 | 12,796 |
Accrued clinical and development expenses | 7,627 | 17,010 |
Accrued general and administrative expenses | 6,052 | 2,898 |
Accrued interest payable | 3,990 | 3,940 |
Current portion of non-recourse notes due 2035, net | 16,940 | |
Operating lease liabilities | 2,624 | 503 |
Deferred revenue | 24 | 98 |
Other accrued liabilities | 2,275 | 1,304 |
Total current liabilities | 32,624 | 58,587 |
Convertible senior notes due 2023, net | 228,571 | 228,035 |
Non-recourse notes due 2035, net | 396,125 | 371,359 |
Long-term operating lease liabilities | 50,642 | 52,681 |
Long-term deferred revenue | 204 | 310 |
Other long-term liabilities | 2,404 | 2,420 |
Commitments and contingencies | ||
Shareholders' Deficit | ||
Preferred shares, $0.00001 par value: 230 shares authorized, no shares issued or outstanding | ||
Ordinary shares, $0.00001 par value: 200,000 shares authorized; 76,427 and 74,435 shares issued and outstanding at June 30, 2022 and December 31, 2021, respectively | 1 | 1 |
Additional paid-in capital | 1,410,415 | 1,387,469 |
Accumulated other comprehensive loss | (45) | |
Accumulated deficit | (1,760,180) | (1,726,043) |
Total shareholders' deficit | (349,809) | (338,573) |
Total liabilities and shareholders' deficit | $ 360,761 | $ 374,819 |
CONDENSED CONSOLIDATED BALANC_2
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares shares in Thousands | Jun. 30, 2022 | Dec. 31, 2021 |
CONDENSED CONSOLIDATED BALANCE SHEETS | ||
Preferred shares, par value (in dollars per share) | $ 0.00001 | $ 0.00001 |
Preferred shares, shares authorized | 230 | 230 |
Preferred shares, shares issued | 0 | 0 |
Preferred shares, outstanding shares | 0 | 0 |
Ordinary shares, par value (in dollars per share) | $ 0.00001 | $ 0.00001 |
Ordinary shares, authorized shares | 200,000 | 200,000 |
Ordinary shares, shares issued | 76,427 | 74,435 |
Ordinary shares, outstanding shares | 76,427 | 74,435 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | |
Revenue: | ||||
Total revenue | $ 11,050 | $ 12,914 | $ 24,246 | $ 27,171 |
Expenses: | ||||
Research and development (1) | 15,571 | 51,093 | 38,824 | 118,692 |
Selling, general and administrative (1) | 16,986 | 25,931 | 34,828 | 56,481 |
Transaction-related legal expenses (Note 13) | 3,778 | 5,057 | ||
Restructuring and related expenses (1) | 1,594 | 10,918 | ||
Total expenses | 37,929 | 77,024 | 89,627 | 175,173 |
Total share-based compensation expense | 9,709 | 14,941 | 24,254 | 30,773 |
Loss from operations | (26,879) | (64,110) | (65,381) | (148,002) |
Income from investment in TRC, LLC | 28,127 | 21,926 | 53,237 | 38,473 |
Interest expense | (11,884) | (11,612) | (23,539) | (23,485) |
Interest income and other income (expense), net | 2,440 | 1,171 | 2,065 | 937 |
Loss before income taxes | (8,196) | (52,625) | (33,618) | (132,077) |
Provision for income tax benefit (expense) | 5 | 220 | (519) | (7) |
Net loss | (8,191) | (52,405) | (34,137) | (132,084) |
Net unrealized loss on available-for-sale investments | (17) | (9) | (45) | (39) |
Total comprehensive loss | $ (8,208) | $ (52,414) | $ (34,182) | $ (132,123) |
Net loss per share: | ||||
Basic net loss per share | $ (0.11) | $ (0.80) | $ (0.45) | $ (2.03) |
Diluted net loss per share | $ (0.11) | $ (0.80) | $ (0.45) | $ (2.03) |
Shares used to compute basic net loss per share | 76,270 | 65,669 | 75,761 | 65,085 |
Shares used to compute diluted net loss per share | 76,270 | 65,669 | 75,761 | 65,085 |
Research and development | ||||
Expenses: | ||||
Restructuring and related expenses (1) | $ 400 | $ 5,100 | ||
Total share-based compensation expense | 3,556 | $ 7,315 | 8,086 | $ 15,236 |
Selling, general and administrative | ||||
Expenses: | ||||
Restructuring and related expenses (1) | 1,200 | 5,800 | ||
Total share-based compensation expense | 5,794 | 7,626 | 11,292 | 15,537 |
Restructuring and related expenses | ||||
Expenses: | ||||
Total share-based compensation expense | 359 | 4,876 | ||
Viatris collaboration agreement | ||||
Revenue: | ||||
Total revenue | 10,878 | 10,934 | 21,565 | 21,319 |
Collaborative revenue | ||||
Revenue: | ||||
Total revenue | $ 172 | $ 1,980 | 181 | $ 5,852 |
Licensing revenue | ||||
Revenue: | ||||
Total revenue | $ 2,500 |
CONDENSED CONSOLIDATED STATEM_2
CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS' DEFICIT - USD ($) shares in Thousands, $ in Thousands | Ordinary Shares | Additional Paid-in Capital | Accumulated Other Comprehensive Income (Loss) | Accumulated Deficit | Total |
Balances at Dec. 31, 2020 | $ 1 | $ 1,222,818 | $ 47 | $ (1,526,617) | $ (303,751) |
Balances (in shares) at Dec. 31, 2020 | 64,328 | ||||
Increase (Decrease) in Stockholders' Equity | |||||
Net proceeds from sale of ordinary shares | 108,180 | 108,180 | |||
Net proceeds from sale of ordinary shares (in shares) | 7,705 | ||||
Proceeds from ESPP purchases | 2,862 | 2,862 | |||
Proceeds from ESPP purchases (in shares) | 189 | ||||
Employee share-based compensation expense | 30,773 | 30,773 | |||
Issuance of restricted shares (in shares) | 1,587 | ||||
Option exercises | 5 | 5 | |||
Repurchase of shares to satisfy tax withholding | (6,320) | (6,320) | |||
Repurchase of shares to satisfy tax withholding (in shares) | (339) | ||||
Net unrealized gain (loss) on marketable securities | (39) | (39) | |||
Net loss | (132,084) | (132,084) | |||
Balances at Jun. 30, 2021 | $ 1 | 1,358,318 | 8 | (1,658,701) | (300,374) |
Balances (in shares) at Jun. 30, 2021 | 73,470 | ||||
Balances at Mar. 31, 2021 | $ 1 | 1,233,060 | 17 | (1,606,296) | (373,218) |
Balances (in shares) at Mar. 31, 2021 | 65,218 | ||||
Increase (Decrease) in Stockholders' Equity | |||||
Net proceeds from sale of ordinary shares | 108,180 | 108,180 | |||
Net proceeds from sale of ordinary shares (in shares) | 7,705 | ||||
Proceeds from ESPP purchases | 2,862 | 2,862 | |||
Proceeds from ESPP purchases (in shares) | 189 | ||||
Employee share-based compensation expense | 14,941 | 14,941 | |||
Issuance of restricted shares (in shares) | 399 | ||||
Option exercises | 2 | 2 | |||
Repurchase of shares to satisfy tax withholding | (727) | (727) | |||
Repurchase of shares to satisfy tax withholding (in shares) | (41) | ||||
Net unrealized gain (loss) on marketable securities | (9) | (9) | |||
Net loss | (52,405) | (52,405) | |||
Balances at Jun. 30, 2021 | $ 1 | 1,358,318 | 8 | (1,658,701) | (300,374) |
Balances (in shares) at Jun. 30, 2021 | 73,470 | ||||
Balances at Dec. 31, 2021 | $ 1 | 1,387,469 | (1,726,043) | $ (338,573) | |
Balances (in shares) at Dec. 31, 2021 | 74,435 | 74,435 | |||
Increase (Decrease) in Stockholders' Equity | |||||
Proceeds from ESPP purchases | 487 | $ 487 | |||
Proceeds from ESPP purchases (in shares) | 72 | ||||
Employee share-based compensation expense | 24,254 | 24,254 | |||
Issuance of restricted shares (in shares) | 2,109 | ||||
Repurchase of shares to satisfy tax withholding | (1,795) | (1,795) | |||
Repurchase of shares to satisfy tax withholding (in shares) | (189) | ||||
Net unrealized gain (loss) on marketable securities | (45) | (45) | |||
Net loss | (34,137) | (34,137) | |||
Balances at Jun. 30, 2022 | $ 1 | 1,410,415 | (45) | (1,760,180) | $ (349,809) |
Balances (in shares) at Jun. 30, 2022 | 76,427 | 76,427 | |||
Balances at Mar. 31, 2022 | $ 1 | 1,400,566 | (28) | (1,751,989) | $ (351,450) |
Balances (in shares) at Mar. 31, 2022 | 76,081 | ||||
Increase (Decrease) in Stockholders' Equity | |||||
Proceeds from ESPP purchases | 487 | 487 | |||
Proceeds from ESPP purchases (in shares) | 72 | ||||
Employee share-based compensation expense | 9,709 | 9,709 | |||
Issuance of restricted shares (in shares) | 313 | ||||
Repurchase of shares to satisfy tax withholding | (347) | (347) | |||
Repurchase of shares to satisfy tax withholding (in shares) | (39) | ||||
Net unrealized gain (loss) on marketable securities | (17) | (17) | |||
Net loss | (8,191) | (8,191) | |||
Balances at Jun. 30, 2022 | $ 1 | $ 1,410,415 | $ (45) | $ (1,760,180) | $ (349,809) |
Balances (in shares) at Jun. 30, 2022 | 76,427 | 76,427 |
CONDENSED CONSOLIDATED STATEM_3
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2022 | Jun. 30, 2021 | |
Operating activities | ||
Net loss | $ (34,137) | $ (132,084) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Depreciation and amortization | 2,402 | 2,926 |
Amortization and accretion income, net | (31) | 31 |
Share-based compensation | 24,254 | 30,773 |
Gain on disposal of property and equipment | (96) | |
Gain on sale of Velusetrag | (2,721) | |
Amortization of right-of use assets | 1,314 | 1,752 |
Gain from lease modification | (47) | |
Undistributed earnings from TRC, LLC | (37,179) | 2,986 |
Interest shortfall on 2035 notes, net | 7,372 | |
Other | (168) | |
Changes in operating assets and liabilities: | ||
Receivables from collaborative and licensing arrangements | 1,577 | 3,648 |
Prepaid clinical and development services | 7,934 | 4,461 |
Other prepaid and current assets | 2,619 | (1,993) |
Right-of-use lease asstes | (2,689) | |
Other assets | (145) | 997 |
Accounts payable | (26) | 4,026 |
Accrued personnel-related expenses, accrued clinical and development expenses, and other accrued liabilities | (11,135) | (33,125) |
Accrued interest payable | 50 | (74) |
Deferred revenue | (180) | (5,852) |
Operating lease liabilities | 82 | 1,718 |
Other long-term liabilities | (17) | |
Net cash used in operating activities | (40,799) | (119,978) |
Investing activities | ||
Purchases of property and equipment | (363) | (1,923) |
Purchases of marketable securities | (53,763) | (40,014) |
Maturities of marketable securities | 91,699 | 191,400 |
Proceeds from the sale of property and equipment | 1,866 | |
Net cash provided by investing activities | 39,439 | 149,463 |
Financing activities | ||
Proceeds from the sale of ordinary shares, net | 108,180 | |
Principal payment on 2035 notes | (10,730) | |
Proceeds from ESPP purchases | 487 | 2,862 |
Proceeds from option exercises | 5 | |
Repurchase of shares to satisfy tax withholding | (1,795) | (6,320) |
Net cash (used in) provided by financing activities | (1,308) | 93,997 |
Net increase in cash, cash equivalents, and restricted cash | (2,668) | 123,482 |
Cash, cash equivalents, and restricted cash at beginning of period | 90,796 | 82,300 |
Cash, cash equivalents, and restricted cash at end of period | 88,128 | 205,782 |
Supplemental disclosure of cash flow information | ||
Cash paid for interest | 15,127 | 22,490 |
Cash (received) paid for income taxes, net | $ 25 | $ 12 |
Organization and Summary of Sig
Organization and Summary of Significant Accounting Policies | 6 Months Ended |
Jun. 30, 2022 | |
Organization and Summary of Significant Accounting Policies. | |
Organization and Summary of Significant Accounting Policies | 1. Organization and Summary of Significant Accounting Policies Theravance Biopharma, Inc. (“Theravance Biopharma” or the “Company”) is a biopharmaceutical company primarily focused on the discovery, development, and commercialization of medicines. The Company’s core purpose is to create medicines that make a difference ® On July 20, 2022, the Company successfully completed the sale of its units in Theravance Respiratory Company, LLC, representing its 85% economic interests in the sales-based royalty rights on worldwide net sales of GSK’s TRELEGY ELLIPTA (“TRELEGY”) to Royalty Pharma Investments 2019 ICAV. In conjunction with the closing of the sale, the Company repaid its 9.5% Non-Recourse Notes Due 2035 Note 13. Subsequent Events” Basis of Presentation The Company’s condensed consolidated financial information as of June 30, 2022 and for the three and six months ended June 30, 2022 and 2021 is unaudited but includes all adjustments (consisting only of normal recurring adjustments), which are considered necessary for a fair presentation of the financial position at such date and of the operating results and cash flows for those periods, and have been prepared in accordance with United States (“US”) generally accepted accounting principles (“GAAP”) for interim financial information. Accordingly, they do not include all of the information and notes required by GAAP for complete financial statements. The accompanying unaudited condensed consolidated financial statements should be read in conjunction with the audited consolidated December 31, 2021 financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2021, filed with the Securities and Exchange Commission (“SEC”) on February 28, 2022. The results for the three and six months ended June 30, 2022 are not necessarily indicative of the results to be expected for the year ending December 31, 2022, or for any other interim period or for any future period. These condensed consolidated financial statements include the accounts of the Company and its subsidiaries, and intercompany transactions and balances have been eliminated. Use of Estimates The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses, and related disclosures in the condensed consolidated financial statements and accompanying notes. Management bases its estimates on historical experience and on assumptions believed to be reasonable under the circumstances. Actual results could differ materially from those estimates. Significant Accounting Policies There have been no material revisions in the Company’s significant accounting policies described in Note 1 to the consolidated financial statements included in its Annual Report on Form 10-K for the year ended December 31, 2021. Recently Adopted Accounting Pronouncements In August 2020, the FASB issued ASU 2020-06, Debt - Debt with Conversion and other Options (Subtopic 470-20) and Derivatives and Hedging: Contracts in Entity’s Own Equity (Subtopic 815-40) simplifies the complexity associated with applying GAAP for certain financial instruments with characteristics of liabilities and equity removing certain accounting models which separate the embedded conversion features from the host contract for convertible instruments. The standard also enhances the consistency of earnings-per-share calculations by requiring that an entity use the if-converted method and that the effect of potential share settlement be included in diluted earnings-per-share calculations. beginning after December 15, 2021. The Company evaluated ASU 2020-06 and determined that its adoption did not have an impact on the Company’s condensed consolidated financial statements and related disclosures. Recently Issued Accounting Pronouncements Not Yet Adopted The Company has evaluated other recently issued accounting pronouncements and does not currently believe that any of these pronouncements will have a material impact on its condensed consolidated financial statements and related disclosures. |
Net Loss per Share
Net Loss per Share | 6 Months Ended |
Jun. 30, 2022 | |
Net Loss per Share | |
Net Loss per Share | 2. Net Loss per Share Basic net loss per share is computed by dividing net loss by the weighted-average number of shares outstanding, less ordinary shares subject to forfeiture. Diluted net loss per share is computed by dividing net loss by the weighted-average number of shares outstanding, less ordinary shares subject to forfeiture, plus all additional ordinary shares that would have been outstanding, assuming dilutive potential ordinary shares had been issued for other dilutive securities. Three Months Ended June 30, Six Months Ended June 30, (In thousands, except per share data) 2022 2021 2022 2021 Numerator: Net loss $ (8,191) $ (52,405) $ (34,137) $ (132,084) Denominator: Weighted-average ordinary shares outstanding 76,270 65,669 75,761 65,199 Less: weighted-average ordinary shares subject to forfeiture — — — (114) Weighted-average ordinary shares used to compute basic and diluted net loss per share 76,270 65,669 75,761 65,085 Basic and diluted net loss per share $ (0.11) $ (0.80) $ (0.45) $ (2.03) For the three and six months ended June 30, 2022 and 2021, diluted and basic net loss per share were identical since potential ordinary shares were excluded from the calculation, as their effect was anti-dilutive. Anti-dilutive Securities The following ordinary equivalent shares were not included in the computation of diluted net loss per share because their effect was anti-dilutive: Three Months Ended June 30, Six Months Ended June 30, (In thousands) 2022 2021 2022 2021 Share issuances under equity incentive plans and ESPP 5,660 6,228 6,239 8,307 Share issuances upon the conversion of convertible senior notes 6,676 6,676 6,676 6,676 Total 12,336 12,904 12,915 14,983 |
Revenue
Revenue | 6 Months Ended |
Jun. 30, 2022 | |
Revenue | |
Revenue | 3. Revenue Revenue from Collaborative Arrangements Viatris In January 2015, the Company and Viatris Inc. (“Viatris”) established a strategic collaboration (the “Viatris Agreement”) for the development and commercialization of revefenacin, including YUPELRI ® In the US, Viatris is leading the commercialization of YUPELRI, and the Company co-promotes the product under a profit and loss sharing arrangement (65% to Viatris; 35% to Theravance Biopharma). Outside the US (including China and adjacent territories), Viatris is responsible for development and commercialization and will pay the Company a tiered royalty on net sales at percentage royalty rates ranging from low double-digits to mid-teens. Viatris is the principal in the sales transactions, and as a result, the Company does not reflect the product sales in its condensed consolidated financial statements. As of June 30, 2022, the Company is eligible to receive from Viatris potential global development, regulatory and sales milestone payments totaling up to $257.5 million in the aggregate, with $205.0 million associated with YUPELRI monotherapy, and $52.5 million associated with future potential combination products. Of the $205.0 million associated with monotherapy, $187.5 million relates to sales milestones based on achieving certain levels of net sales and $17.5 million relates to global development and regulatory actions. The $52.5 million associated with future potential combination products relates solely to development and regulatory actions. The Viatris Agreement is considered to be within the scope of ASC 808 and partially within the scope of ASC 606, as the parties are active participants and exposed to the risks and rewards of the collaborative activity with a unit of account provided to Viatris as a customer. Under the terms of the Viatris Agreement, which included the delivery by the Company of a license to Viatris to develop and commercialize revefenacin in exchange for $15.0 million received in 2015, Viatris was responsible for reimbursement of the Company’s costs related to the registrational program up until the approval of the first new drug application in November 2018; thereafter, R&D expenses are shared. Performing R&D services for reimbursement is considered a collaborative activity under the scope of ASC 808. Reimbursable program costs are recognized proportionately with the performance of the underlying services and accounted for as reductions to R&D expense. For this unit of account, the Company did not recognize revenue or analogize to ASC 606 and, as such, the reimbursable program costs are excluded from the transaction price. The Company determined the license to develop and commercialize revefenacin to be a unit of account and a separate performance obligation, for which Viatris is a customer, with the $15.0 million for the delivery of the license representing the transaction price. The future potential milestone amounts for Following the US Food and Drug Administration (“FDA”) approval of YUPELRI in November 2018, net amounts payable to or receivable from Viatris each quarter under the profit-sharing structure are disaggregated according to their individual components. In accordance with the applicable accounting guidance, amounts receivable mounts payable to Viatris, if any, in connection with the commercialization of YUPELRI are recorded within the condensed consolidated statements of operations as a collaboration loss within selling, general and administrative expenses. Any reimbursement from Viatris attributed to the 65% cost-sharing of the Company’s R&D expenses is characterized as a reduction of R&D expense, as the Company does not consider performing research and development services for reimbursement to be a part of its ordinary activities. The following YUPELRI-related amounts were recognized within revenue in the Company’s condensed consolidated statements of operations: Three Months Ended June 30, Six Months Ended June 30, (In thousands) 2022 2021 2022 2021 Viatris collaboration agreement - Amounts receivable from Viatris $ 10,878 $ 10,934 $ 21,565 $ 21,319 Other Collaborative Arrangements The Company recognized revenues from its other collaborative arrangements as follows: Three Months Ended June 30, Six Months Ended June 30, (In thousands) 2022 2021 2022 2021 Alfasigma $ 166 $ 3 $ 169 $ 7 Viatris 6 6 12 12 Janssen — 1,971 — 5,833 Total collaboration revenue $ 172 $ 1,980 $ 181 $ 5,852 All of the recognized revenues from the Company’s other collaborative arrangements presented in the table above were included in deferred revenue at the beginning of the respective periods. Janssen Biotech In February 2018, the Company entered into a global co-development and commercialization agreement with Janssen Biotech, Inc. (“Janssen”) for izencitinib and related back-up compounds for inflammatory intestinal diseases, including ulcerative colitis and Crohn’s disease (the “Janssen Agreement”). The Company received an upfront payment of $100.0 million related to the Janssen Agreement. Following unfavorable Phase 3 clinical trial results for izencitinib announced in August 2021, Janssen terminated the Janssen Agreement effective January 16, 2022. As a result, the Company did not recognize any collaboration revenue related to the Janssen Agreement for the three and six months ended June 30, 2022. For the three and six months ended June 30, 2021, the Company recognized $2.0 million and $5.8 million, respectively, in collaboration revenue related to the Janssen Agreement. Reimbursement of R&D Expenses As noted above, under certain collaborative arrangements the Company is entitled to reimbursement of certain R&D expenses. Activities under collaborative arrangements for which the Company is entitled to reimbursement are considered to be collaborative activities under the scope of ASC 808. For these units of account, the Company does not analogize to ASC 606 or recognize revenue. The Company records reimbursement payments received from its collaboration partners as reductions to R&D expense. The following table summarizes the reductions to R&D expense related to the reimbursement payments: Three Months Ended June 30, Six Months Ended June 30, (In thousands) 2022 2021 2022 2021 Viatris $ 1,543 $ 67 $ 3,079 $ 161 Janssen — 1,193 — 2,525 Total reduction to R&D expense, net $ 1,543 $ 1,260 $ 3,079 $ 2,686 Revenue from Licensing Arrangements Pfizer In December 2019, the Company entered into a global license agreement with Pfizer Inc. (“Pfizer”) for our preclinical skin-selective, locally-acting pan-JAK inhibitor program (the “Pfizer Agreement”). The compounds in this program are designed to target validated pro-inflammatory pathways and are specifically designed to possess skin-selective activity with minimal systemic exposure. Under the Pfizer Agreement, Pfizer has an exclusive license to develop, manufacture and commercialize certain compounds for all uses other than gastrointestinal, ophthalmic, and respiratory applications. The Company received an upfront cash payment of $10.0 million in 2019, and in March 2022, the Company recognized $2.5 million in licensing revenue related to a development milestone payment from Pfizer for the dosing of the first patient in the Phase 1 clinical trial. As of June 30, 2022, the Company is |
Sale of Velusetrag
Sale of Velusetrag | 6 Months Ended |
Jun. 30, 2022 | |
Sale of Velusetrag | |
Sale of Velusetrag | 4. Sale of Velusetrag Velusetrag is an oral, investigational medicine developed for gastrointestinal motility disorders. It is a highly selective agonist with high intrinsic activity at the human 5-HT4 receptor. In 2012, the Company partnered with Alfasigma S.p.A. (“Alfasigma”) in the development of velusetrag and its commercialization in certain countries. In April 2018, Alfasigma exercised its option to continue to develop and commercialize velusetrag, and the Company elected not to pursue further development. Global rights to develop, manufacture and commercialize velusetrag were transferred to Alfasigma under the terms of the collaboration arrangement. On June 30, 2022, the Company entered into an Asset Purchase Agreement (“APA”) to sell all of its velusetrag assets to Alfasigma. In connection with the closing of the transaction, Alfasigma acquired, among other things, (i) intellectual property and (ii) books and records related to velusetrag. As consideration for the velusetrag sale, the Company received an upfront payment of $2.8 million in July 2022, and pursuant to the terms of the APA, the Company is eligible to receive up to $105.0 million in additional future developmental and sales milestones. At the time of the sale, the velusetrag assets had no remaining book value on the Company’s records, and as of June 30, 2022, all of the velusetrag assets were delivered to Alfasigma. For the three and six months ended June 30, 2022, the Company recognized a net gain of $2.7 million, after transaction costs, related to the sale of velusetrag within “interest income and other income (expense), net” on the consolidated statements of operations. |
Cash, Cash Equivalents, and Res
Cash, Cash Equivalents, and Restricted Cash | 6 Months Ended |
Jun. 30, 2022 | |
Cash, Cash Equivalents, and Restricted Cash | |
Cash, Cash Equivalents, and Restricted Cash | 5. Cash, Cash Equivalents, and Restricted Cash The following table provides a reconciliation of cash, cash equivalents, and restricted cash reported within the current period and comparable prior year period condensed consolidated balance sheets that sum to the total of the same such amounts shown on the condensed consolidated statements of cash flows. June 30, (In thousands) 2022 2021 Cash and cash equivalents $ 87,292 $ 204,949 Restricted cash 836 833 Total cash, cash equivalents, and restricted cash shown on the condensed consolidated $ 88,128 $ 205,782 The Company maintains restricted cash for certain lease agreements and letters of credit by which the Company has pledged cash and cash equivalents as collateral. Separately, the Company also maintains restricted cash for debt servicing of its 9.5% non-recourse 2035 notes. See “Note 7. Debt” |
Investments and Fair Value Meas
Investments and Fair Value Measurements | 6 Months Ended |
Jun. 30, 2022 | |
Investments and Fair Value Measurements | |
Investments and Fair Value Measurements | 6. Investments and Fair Value Measurements Available-for-Sale Securities The estimated fair value of marketable securities is based on quoted market prices for these or similar investments obtained from a commercial pricing service. The fair market value of marketable securities classified within Level 1 is based on quoted prices for identical instruments in active markets. The fair value of marketable securities classified within Level 2 is based on quoted prices for similar instruments in active markets; quoted prices for identical or similar instruments in markets that are not active; or model-driven valuations whose inputs are observable or whose significant value drivers are observable. Observable inputs may include benchmark yields, reported trades, broker/dealer quotes, issuer spreads, two-sided markets, benchmark securities, bids, offers and reference data including market research publications. Available-for-sale securities are summarized below: June 30, 2022 Gross Gross Amortized Unrealized Unrealized Estimated (In thousands) Cost Gains Losses Fair Value US government securities Level 1 $ 13,967 $ — $ (12) $ 13,955 Corporate notes Level 2 12,016 — (20) 11,996 Commercial paper Level 2 24,599 — (15) 24,584 Marketable securities 50,582 — (47) 50,535 Money market funds Level 1 41,726 — — 41,726 Total $ 92,308 $ — $ (47) $ 92,261 December 31, 2021 Gross Gross Amortized Unrealized Unrealized Estimated (In thousands) Cost Gains Losses Fair Value US government securities Level 1 $ 29,986 $ — $ (2) $ 29,984 Corporate notes Level 2 5,034 — (2) 5,032 Commercial paper Level 2 48,490 1 (1) 48,490 Marketable securities 83,510 1 (5) 83,506 Money market funds Level 1 50,228 — — 50,228 Total $ 133,738 $ 1 $ (5) $ 133,734 As of June 30, 2022, all of the Company’s available-for-sale securities had contractual maturities within six months, and the weighted-average maturity of marketable securities was approximately four months. There were no transfers between Level 1 and Level Available-for-sale debt securities with unrealized losses are summarized below: June 30, 2022 Less than 12 Months Greater than 12 Months Total Gross Gross Gross Estimated Unrealized Estimated Unrealized Estimated Unrealized (In thousands) Fair Value Losses Fair Value Losses Fair Value Losses US government securities $ 13,954 $ (12) $ — $ — $ 13,954 $ (12) Corporate notes 11,996 (20) — — 11,996 (20) Commercial paper 19,607 (15) — — 19,607 (15) Total $ 45,557 $ (47) $ — $ — $ 45,557 $ (47) December 31, 2021 Less than 12 Months Greater than 12 Months Total Gross Gross Gross Estimated Unrealized Estimated Unrealized Estimated Unrealized (In thousands) Fair Value Losses Fair Value Losses Fair Value Losses US government securities $ 19,991 $ (2) $ — $ — $ 19,991 $ (2) Corporate notes 5,031 (2) — — 5,031 (2) Commercial paper 9,995 (1) — — 9,995 (1) Total $ 35,017 $ (5) $ — $ — $ 35,017 $ (5) The Company invests primarily in high credit quality and short-term maturity T As of June 30, 2022, the Company’s accumulated other comprehensive income (loss) on its condensed consolidated balance sheets consisted of net unrealized gains (losses) on available-for-sale investments. For the three and six months ended June 30, 2022 and 2021, the Company did not sell any marketable securities. |
Debt
Debt | 6 Months Ended |
Jun. 30, 2022 | |
Debt | |
Debt | 7. Debt “Note 13. Subsequent Events” As of June 30, 2022, debt consisted of the following: June 30, (In thousands) 2022 9.5% Non-Recourse 2035 Notes: Principal amount $ 421,050 Less: (21,053) Unamortized debt issuance costs - (2,741) Unamortized debt issuance costs - Modified (1,131) 396,125 3.25% Convertible 2023 Notes: Principal amount 230,000 Unamortized debt issuance costs (1,429) 228,571 Total debt $ 624,696 9.5% Non-Recourse Notes Due 2035 On February 21, 2020, Theravance Biopharma R&D, Inc. (“Theravance R&D”), a wholly-owned subsidiary of the Company, and Triple Royalty Sub II LLC (the “Issuer II” or “Triple II”), a wholly-owned subsidiary of Theravance Biopharma R&D, entered into certain note purchase agreements (“Note Purchase Agreements”) with certain note purchasers (“Note Purchasers”), relating to the private placement by Issuer II of $400.0 million 9.5% Fixed Rate Term Notes due on or before 2035 (the “Non-Recourse 2035 Notes”). Ninety-five percent of the Non-Recourse 2035 Notes were sold to the Note Purchasers pursuant to the Note Purchase Agreements. The remaining 5% of the Non-Recourse 2035 Notes (the “Retained Notes”) were retained by the Company to comply with Regulation RR — Credit Risk Retention (17 C.F.R. Part 246). The Retained Notes were eliminated in the Company’s condensed consolidated financial statements. The Non-Recourse 2035 Notes were secured by all of Issuer II’s right, title and interest as a holder of certain membership interests (the “Issuer II Class C Units”) in Theravance Respiratory Company, LLC (“TRC”). TRC holds the right to receive upward-tiering royalties ranging from 6.5% to 10% on worldwide net sales of TRELEGY, and, prior to July 20, 2022, the Company held an 85% economic interest in TRC. The Issuer II Class C Units represented 75% of the Company's 85% economic interest, which equated to 63.75% of the economic interests in TRC. The source of principal and interest payments for the Non-Recourse 2035 Notes were the future royalty payments generated from the TRELEGY program, and as a result, the holders of the Non-Recourse 2035 Notes had no recourse against the Company even if the TRELEGY payments were insufficient to cover the principal and interest payments for the Non-Recourse 2035 Notes. Prior to and including the December 5, 2024 payment date, in the event that the distributions received by the Issuer II from TRC in a quarter were less than the interest accrued for that quarter, the principal amount of the Non-Recourse 2035 Notes increased by the interest shortfall amount for that quarter. While the holders of the Non-Recourse 2035 Notes had no recourse against the Company, the terms of the Non-Recourse 2035 Notes also provided that the Company, at its option, could satisfy the quarterly interest payment obligations by making a capital contribution to the Issuer II. For the three and six months ended June 30, 2022, $2.7 million and $7.4 million, respectively, of net interest shortfall was added to the Non-Recourse 2035 Notes. As of June 30, 2022, the Non-Recourse 2035 Notes’ issuance-to-date net interest shortfall was $30.7 million and the issuance-to-date net principal paydown was $10.7 million. The Non-Recourse 2035 Notes were not convertible into Company equity and had no security interest in nor rights under any agreement with GSK. The Non-Recourse 2035 Notes were redeemable by Issuer II on and after February 28, 2022, in whole or in part, at specified redemption premiums. The Non-Recourse 2035 Notes bore an annual interest rate of 9.5%, with interest and principal paid quarterly beginning June 5, 2020. Issuer II redeemed the Non-Recourse 2035 Notes on July 20, 2022 and none of the Non-Recourse 2035 Notes currently remain outstanding. As of June 30, 2022, the net principal and estimated fair value of the Non-Recourse 2035 Notes were $400.0 million and $380.0 million, respectively. The inputs to determine fair value of the Non-Recourse 2035 Notes are categorized as Level 2 inputs. Level 2 inputs include quoted prices for similar instruments in active markets; quoted prices for identical or similar instruments in markets that are not active; and model-derived valuations whose inputs are observable or whose significant value drivers are observable. 3.25% Convertible Senior Notes Due 2023 The Company had $230.0 million of 3.25% convertible senior notes due in 2023 (“Convertible Senior 2023 Notes”) outstanding as of June 30, 2022. For each of the three and six months ended June 30, 2022 and 2021, the Company recognized $1.9 million and $3.7 million, respectively, in contractual interest expense related to the Convertible Senior 2023 Notes. For each of the three and six months ended June 30, 2022 and 2021, the Company recognized $0.3 million and $0.5 million, respectively, in amortization of debt issuance costs related to the Convertible Senior 2023 Notes. As of June 30, 2022, the Convertible Senior 2023 Notes had an estimated fair value of $210.5 million. The estimated fair value was primarily based upon the underlying price of Theravance Biopharma’s publicly traded shares and other observable inputs as of June 30, 2022. The inputs to determine fair value of the Convertible Senior 2023 Notes are categorized as Level 2 inputs. Level 2 inputs include quoted prices for similar instruments in active markets; quoted prices for identical or similar instruments in markets that are not active; and model-derived valuations whose inputs are observable or whose significant value drivers are observable. |
Leases
Leases | 6 Months Ended |
Jun. 30, 2022 | |
Leases | |
Leases | 8. Leases Dublin Lease In April 2017, the Company leased approximately 6,100 square feet of office space in Dublin, Ireland, under a non-cancelable operating lease that expires in April 2027 (“Dublin Lease”). In May 2022, the Company entered into an agreement under which it assigned the Dublin Lease (“Lease Assignment”) to an unaffiliated company. The Company determined that the Lease Assignment would be accounted for as a lease modification under ASC 842, Leases Following the completion of the Lease Assignment, in May 2022, the Company entered into a new operating lease agreement for approximately South San Francisco Sublease In June 2022, the Company entered into a non-cancelable agreement under which it subleased approximately 78,000 square feet of its South San Francisco office and laboratory space to an unaffiliated company. The sublease term continues through May 2030, consistent with the expiration of the Company’s head lease, and the subtenant has no option to extend the sublease. Under the terms of the sublease, the Company is entitled to receive an initial monthly base rent of $0.5 million which will be subject to annual increases of 3%, as well as the subtenant’s proportionate share of the property’s operating expenses. The Company expects to receive a total of $51.8 million in base rent over the sublease term which represents a $13.6 million premium over its proportionate lease payment obligations under the head lease. Under the terms of the head lease, 50% of the sublease premium, equal to $6.8 Sublease income related to this sublease agreement, including base rent and certain sublease transaction cost reimbursements from the landlord, was $0.3 million for the three and six months ended June 30, 2022. The following table summarizes the future undiscounted cash inflows relating to the sublease agreement as of June 30, 2022: (In thousands) Year ending December 31: 2022 $ 3,562 2023 6,509 2024 6,509 2025 6,509 2026 6,509 Thereafter 22,241 Total operating sublease receipts $ 51,839 |
Theravance Respiratory Company,
Theravance Respiratory Company, LLC | 6 Months Ended |
Jun. 30, 2022 | |
Theravance Respiratory Company, LLC | |
Theravance Respiratory Company, LLC | 9. Theravance Respiratory Company, LLC See “Note 13. Subsequent Events” Through the Company’s 85% equity interest in TRC, the Company was entitled to receive an 85% economic interest in any future payments made by GSK under the strategic alliance agreement and under the portion of the collaboration agreement assigned to TRC (net of TRC expenses paid and the amount of cash, if any, expected to be used by TRC pursuant to the TRC LLC Agreement over the next four fiscal quarters). The primary drug program assigned to TRC is Trelegy In May 2014, the Company entered into the TRC LLC Agreement with Innoviva, Inc. (“Innoviva”) that governs the operation of TRC. Under the TRC LLC Agreement, Innoviva was the manager of TRC, and the business and affairs of TRC were managed exclusively by the manager, including (i) day to day management of the drug programs in accordance with the applicable GSK agreements; (ii) preparing an annual operating plan for TRC; and (iii) taking all actions necessary to ensure that the formation, structure and operation of TRC complies with applicable law and partner agreements. The Company was responsible for its proportionate share of TRC’s administrative expenses incurred, and communicated to the Company, by Innoviva. The Company analyzed its ownership, contractual and other interests in TRC to determine if it was a variable-interest entity (“VIE”), whether the Company had a variable interest in TRC and the nature and extent of that interest. The Company determined that TRC was a VIE. The party with the controlling financial interest, the primary beneficiary, is required to consolidate the entity determined to be a VIE. Therefore, the Company also assessed whether it is the primary beneficiary of TRC based on the power to direct TRC’s activities that most significantly impact TRC’s economic performance and its obligation to absorb TRC’s losses or the right to receive benefits from TRC that could potentially be significant to TRC. Based on the Company’s assessment, the Company determined that it was not the primary beneficiary of TRC, and, as a result, the Company does not consolidate TRC in its condensed consolidated financial statements. The Company’s maximum exposure to loss, as a result of its involvement with TRC, were the amounts recorded in the condensed consolidated balance sheets within “Equity in net assets of TRC, LLC”, as noted below. For the three and six months ended June 30, 2022, the Company recognized net royalty income of $28.1 million and $53.2 million, respectively, in the condensed consolidated statements of operations within “Income from investment in TRC, LLC”. These amounts were recorded net of the Company’s share of (i) TRC’s expenses of $0.1 million and $0.3 million for the three and six months ended June 30, 2022, respectively, and (ii) net unrealized losses of $8.1 million and $7.7 million for the three and six months ended June 30, 2022, respectively, which were associated with the estimated fair market value of certain equity investments previously made by TRC. For the three and six months ended June 30, 2021, the Company recognized net royalty income of $21.9 million and $38.5 million, respectively. These amounts were recorded net of the Company’s share of TRC’s expenses of $0.3 million and $3.1 million for the three and six months ended June 30, 2021 and were primarily comprised of TRC legal and related fees associated with previous arbitration proceedings between Innoviva, as the manager of TRC, and TRC and the Company. For the three and six months ended June 30, 2022, the Company received $9.5 million and $16.1 million, respectively, from TRC related to TRELEGY royalties. The Company has also recorded $148.3 million as a long-term asset within “Equity in net assets of TRC, LLC” in the condensed consolidated balance sheets, which represented its share of TRC’s net assets. TRC’s summarized income statement information is presented below: Three Months Ended June 30, Six Months Ended June 30, (In thousands) 2022 2021 2022 2021 Royalty revenue and gross profit $ 42,720 $ 26,386 $ 72,029 $ 48,470 Income from continuing operations 42,581 26,050 71,693 44,853 Net income 33,091 25,796 62,632 44,116 |
Share-Based Compensation
Share-Based Compensation | 6 Months Ended |
Jun. 30, 2022 | |
Share-Based Compensation | |
Share-Based Compensation | 10 . Share-Based Compensation Performance-Contingent Awards The Company periodically grants performance-contingent share-based awards to employees. For the three and six months ended June 30, 2022, the Company recognized Share-Based Compensation Modification Due to Corporate Restructuring As a result of the Company’s corporate restructuring announcement in September 2021 (see “Note 12. Corporate Restructuring Update” based compensation expenses of $0.4 million and $1.7 million for the three and six months ended June 30, 2022, respectively, and impacted approximately 45 terminated employees who met the conditions of the acceleration and departed the Company in the first half of 2022. |
Income Taxes
Income Taxes | 6 Months Ended |
Jun. 30, 2022 | |
Income Taxes | |
Income Taxes | 11. Income Taxes For the three months ended June 30, 2022, the Company recognized an income tax benefit of $5,000, and for the six months ended June 30, 2022, the Company recognized an income tax expense of $0.5 million. The income tax expense for the three months ended June 30, 2022 was primarily attributed to the Company’s estimate of contingent liabilities for uncertain tax positions taken with respect to transfer pricing for the reporting period. No provision for income taxes has been recognized on undistributed earnings of the Company’s foreign subsidiaries as the Company considers such earnings to be indefinitely reinvested. The Company follows the accounting guidance related to accounting for income taxes which requires that a company reduce its deferred tax assets by a valuation allowance if, based on the weight of available evidence, it is more likely than not that some portion or all of its deferred tax assets will not be realized. As of June 30, 2022, the Company’s deferred tax assets were offset in full by a valuation allowance. The Company records liabilities related to uncertain tax positions in accordance with the income tax guidance which clarifies the accounting for uncertainty in income taxes recognized in an enterprise’s financial statements by prescribing a minimum recognition threshold and measurement attribute for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. Resolution of one or more of these uncertain tax positions in any period may have a material impact on the results of operations for that period. The Company includes any applicable interest and penalties within the provision for income taxes in the condensed consolidated statements of operations. The Company was recently under Internal Revenue Service (“IRS”) examination for the tax year ended December 31, 2018. On July 21, 2022, the IRS informed the Company that the examination was completed and no adjustments to its 2018 tax return were necessary. The Company’s future income tax expense may be affected by such factors as changes in tax laws, its business, regulations, tax rates, interpretation of existing laws or regulations, the impact of accounting for share-based compensation, the impact of accounting for business combinations, its international organization, shifts in the amount of income before tax earned in the US as compared with other regions in the world, and changes in overall levels of income before tax. |
Corporate Restructuring Update
Corporate Restructuring Update | 6 Months Ended |
Jun. 30, 2022 | |
Corporate Restructuring Update | |
Corporate Restructuring Update | 12. Corporate Restructuring Update On September 15, 2021, the Company announced a strategic update and corporate restructuring (the “Restructuring”) to focus on leveraging its expertise in developing and commercializing respiratory therapeutics. As part of the Restructuring, the Company initiated a reduction in workforce of approximately 75%. Approximately 75% of the total reduction in workforce occurred in November 2021, For the three and six months ended June 30, 2022, the Company incurred Restructuring and related expenses of $1.6 million and $10.9 million, respectively, of which Since the Restructuring announcement in September 2021, the Company has incurred total Restructuring and related expenses of $31.1 million of which general and administrative expenses. Of the total $31.1 million, cash-related expenses were $17.6 million and non-cash expenses were $13.5 million, which were primarily related to the modification of equity-based awards. The Company estimates that it will incur total Restructuring and related expenses of approximately $31.9 million comprised of $17.6 million in cash expenses and $14.3 million in non-cash expenses. These expenses are primarily comprised of severance and other related costs which are being Selected information relating to accrued cash-related Restructuring expenses was as follows: (In thousands) Balance at December 31, 2021 $ 9,550 Net accruals 6,275 Cash paid (15,233) Balance at June 30, 2022 $ 592 The Company expects to recognize the remaining Restructuring and related expenses of approximately $0.8 million in the third quarter of 2022. The remaining Restructuring and related expense estimate is comprised of non-cash expenses and is subject to a number of assumptions, and the actual amount may differ. We may also incur additional costs not currently contemplated due to events that may occur as a result of, or that are associated with, the Restructuring. The Company also evaluated the impact of the Restructuring on the carrying value of its long-lived assets, such as property and equipment and operating lease assets. This process included evaluating the estimated remaining lives, significant changes in the use, and potential impairment charges related to its long-lived assets. Based on its evaluation, the Company determined that its long-lived assets were not impaired as of June 30, 2022, and it has not recognized any impairment charges related to its long-lived assets since the Restructuring announcement. |
Subsequent Events
Subsequent Events | 6 Months Ended |
Jun. 30, 2022 | |
Subsequent Events | |
Subsequent Events | 13. Subsequent Events Sale of Theravance Respiratory Company, LLC On July 20, 2022, the Company completed the sale of its 2,125 Class B Units and 6,375 Class C Units (collectively, the “Issuer II Class C Units”) of TRC to Royalty Pharma Investments 2019 ICAV, an Irish collective asset-management vehicle (“Royalty Pharma”), pursuant to the Equity Purchase and Funding Agreement, dated as of July 13, 2022 (including the schedules and exhibits thereto, the “Purchase Agreement”), by and between the Company and Royalty Pharma (collectively with the other transactions contemplated by the Purchase Agreement, the “Transaction”). The Issuer II Class C Units represent the right to receive 85% of the royalty payments on worldwide net sales of Assigned Collaboration Products (as defined in the Purchase Agreement) pursuant to the terms of that certain Collaboration Agreement, dated as of November 14, 2002, by and between Innoviva, Inc. (formerly known as Theravance, Inc.), a Delaware corporation (“Innoviva”), and Glaxo Group Limited, a private company limited by shares registered under the laws of England and Wales (“GSK”) (as amended, the “Collaboration Agreement”). At the closing of the sale of the Issuer II Class C Units and the other transactions contemplated by the Purchase Agreement (the “Closing”), the Company received approximately $1.1 billion in cash. From and after January 1, 2023, for any calendar year starting with the year ending December 31, 2023 and ending with the year December 31, 2026, upon certain milestone minimum royalty amounts for the Assigned Collaboration Products being met, Royalty Pharma is obligated to make certain cash payments to the Company (the “Milestone Payments”), which are not to exceed $250.0 million in aggregate. Additionally, the Company will receive from Royalty Pharma 85% of the royalty payments on the Assigned Collaboration Products payable (a) for sales or other activities occurring on and after January 1, 2031 related to the Assigned Collaboration Products in the US, and (b) for sales or other activities occurring on and after July 1, 2029 related to the Assigned Collaboration Products outside of the US. The Purchase Agreement contains customary representations and warranties of the Company and Royalty Pharma, including with respect to organization, authorization, intellectual property matters and tax matters, and certain covenants with respect to confidentiality, taxes and actions and conduct relating to preservation of TRC prior to the Closing. The Company and Royalty Pharma will each indemnify the other against damages arising from breaches of representations, warranties and covenants under the Purchase Agreement. Effective as of the Closing, the Company consented to certain amendments to the Collaboration Agreement and the Extension Agreement, dated as of March 3, 2014, by and between the Company and GSK, as well as the termination of the Master Agreement, dated as of March 3, 2014, by and between Innoviva, the Company and GSK, and further released Innoviva, Innoviva TRC Holdings LLC, a Delaware limited liability company, Royalty Pharma and TRC for claims relating to TRC or the ownership of TRC by the Company or Innoviva prior to the Closing. Ampreloxetine Funding In connection with the Transaction, the Company also received an additional $25.0 million in cash in exchange for certain royalty rights to ampreloxetine, and is entitled to receive an additional $15.0 million upon the first regulatory approval of any pharmaceutical product that contains ampreloxetine as an active pharmaceutical ingredient by either (a) the US Food and Drug Administration or (b) the first of (i) the European Medicines Agency or (ii) all four of Germany, France, Italy and Spain. In exchange for the Ampreloxetine Purchase Price, the Company will make quarterly royalty payments to Royalty Pharma equal to the amount of Ampreloxetine Net Sales (as defined in the Purchase Agreement) recognized during the applicable quarter multiplied by 2.5% for the first $500.0 million in Ampreloxetine Net Sales and 4.5% for Ampreloxetine Net Sales in excess of $500.0 million. These royalty payments from the Company to Royalty Pharma will continue until, on a country by country and product by product basis, the later of (a) the expiration of all valid and enforceable claims of any patent, or pending claim of a good faith patent application during the five For the three and six months ended June 30, 2022, the Company incurred $3.8 million and $5.1 million, respectively, in legal expenses related to the Transaction. Repayment of Debt Immediately after announcing the Transaction, the Company initiated a multi-step process to eliminate its outstanding debt. The first step of the process was the repayment of the Company’s Non-Recourse 2035 Notes for approximately $420.0 million, which was completed on July 20, 2022. On July 26, 2022, the Company initiated the second step of the process by launching a tender offer to retire $230.0 million in principal amount of the Company's 2023 Convertible Senior Notes, at par, that is expected to be completed in August 2022. |
Organization and Summary of S_2
Organization and Summary of Significant Accounting Policies (Policies) | 6 Months Ended |
Jun. 30, 2022 | |
Organization and Summary of Significant Accounting Policies. | |
Basis of Presentation | Basis of Presentation The Company’s condensed consolidated financial information as of June 30, 2022 and for the three and six months ended June 30, 2022 and 2021 is unaudited but includes all adjustments (consisting only of normal recurring adjustments), which are considered necessary for a fair presentation of the financial position at such date and of the operating results and cash flows for those periods, and have been prepared in accordance with United States (“US”) generally accepted accounting principles (“GAAP”) for interim financial information. Accordingly, they do not include all of the information and notes required by GAAP for complete financial statements. The accompanying unaudited condensed consolidated financial statements should be read in conjunction with the audited consolidated December 31, 2021 financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2021, filed with the Securities and Exchange Commission (“SEC”) on February 28, 2022. The results for the three and six months ended June 30, 2022 are not necessarily indicative of the results to be expected for the year ending December 31, 2022, or for any other interim period or for any future period. These condensed consolidated financial statements include the accounts of the Company and its subsidiaries, and intercompany transactions and balances have been eliminated. |
Use of Estimates | Use of Estimates The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses, and related disclosures in the condensed consolidated financial statements and accompanying notes. Management bases its estimates on historical experience and on assumptions believed to be reasonable under the circumstances. Actual results could differ materially from those estimates. |
Significant Accounting Policies | Significant Accounting Policies There have been no material revisions in the Company’s significant accounting policies described in Note 1 to the consolidated financial statements included in its Annual Report on Form 10-K for the year ended December 31, 2021. |
Recently Adopted Accounting Pronouncements and Recently Issued Accounting Pronouncements Not Yet Adopted | Recently Adopted Accounting Pronouncements In August 2020, the FASB issued ASU 2020-06, Debt - Debt with Conversion and other Options (Subtopic 470-20) and Derivatives and Hedging: Contracts in Entity’s Own Equity (Subtopic 815-40) simplifies the complexity associated with applying GAAP for certain financial instruments with characteristics of liabilities and equity removing certain accounting models which separate the embedded conversion features from the host contract for convertible instruments. The standard also enhances the consistency of earnings-per-share calculations by requiring that an entity use the if-converted method and that the effect of potential share settlement be included in diluted earnings-per-share calculations. beginning after December 15, 2021. The Company evaluated ASU 2020-06 and determined that its adoption did not have an impact on the Company’s condensed consolidated financial statements and related disclosures. Recently Issued Accounting Pronouncements Not Yet Adopted The Company has evaluated other recently issued accounting pronouncements and does not currently believe that any of these pronouncements will have a material impact on its condensed consolidated financial statements and related disclosures. |
Net Loss per Share (Tables)
Net Loss per Share (Tables) | 6 Months Ended |
Jun. 30, 2022 | |
Net Loss per Share | |
Schedule of basic and diluted net loss per share | Three Months Ended June 30, Six Months Ended June 30, (In thousands, except per share data) 2022 2021 2022 2021 Numerator: Net loss $ (8,191) $ (52,405) $ (34,137) $ (132,084) Denominator: Weighted-average ordinary shares outstanding 76,270 65,669 75,761 65,199 Less: weighted-average ordinary shares subject to forfeiture — — — (114) Weighted-average ordinary shares used to compute basic and diluted net loss per share 76,270 65,669 75,761 65,085 Basic and diluted net loss per share $ (0.11) $ (0.80) $ (0.45) $ (2.03) |
Schedule of anti-dilutive securities | Three Months Ended June 30, Six Months Ended June 30, (In thousands) 2022 2021 2022 2021 Share issuances under equity incentive plans and ESPP 5,660 6,228 6,239 8,307 Share issuances upon the conversion of convertible senior notes 6,676 6,676 6,676 6,676 Total 12,336 12,904 12,915 14,983 |
Revenue (Tables)
Revenue (Tables) | 6 Months Ended |
Jun. 30, 2022 | |
Revenue | |
Schedule of revenue recognized from collaborative arrangements | Three Months Ended June 30, Six Months Ended June 30, (In thousands) 2022 2021 2022 2021 Viatris collaboration agreement - Amounts receivable from Viatris $ 10,878 $ 10,934 $ 21,565 $ 21,319 |
Schedule of collaborative amounts were recorded in the Company's condensed consolidated statements of operations | Three Months Ended June 30, Six Months Ended June 30, (In thousands) 2022 2021 2022 2021 Alfasigma $ 166 $ 3 $ 169 $ 7 Viatris 6 6 12 12 Janssen — 1,971 — 5,833 Total collaboration revenue $ 172 $ 1,980 $ 181 $ 5,852 |
Summary of the reductions to R&D costs related to reimbursement payments | Three Months Ended June 30, Six Months Ended June 30, (In thousands) 2022 2021 2022 2021 Viatris $ 1,543 $ 67 $ 3,079 $ 161 Janssen — 1,193 — 2,525 Total reduction to R&D expense, net $ 1,543 $ 1,260 $ 3,079 $ 2,686 |
Cash, Cash Equivalents, and R_2
Cash, Cash Equivalents, and Restricted Cash (Tables) | 6 Months Ended |
Jun. 30, 2022 | |
Cash, Cash Equivalents, and Restricted Cash | |
Schedule of reconciliation of cash, cash equivalents, and restricted cash | June 30, (In thousands) 2022 2021 Cash and cash equivalents $ 87,292 $ 204,949 Restricted cash 836 833 Total cash, cash equivalents, and restricted cash shown on the condensed consolidated $ 88,128 $ 205,782 |
Investments and Fair Value Me_2
Investments and Fair Value Measurements (Tables) | 6 Months Ended |
Jun. 30, 2022 | |
Investments and Fair Value Measurements | |
Schedule of available-for-sale securities | June 30, 2022 Gross Gross Amortized Unrealized Unrealized Estimated (In thousands) Cost Gains Losses Fair Value US government securities Level 1 $ 13,967 $ — $ (12) $ 13,955 Corporate notes Level 2 12,016 — (20) 11,996 Commercial paper Level 2 24,599 — (15) 24,584 Marketable securities 50,582 — (47) 50,535 Money market funds Level 1 41,726 — — 41,726 Total $ 92,308 $ — $ (47) $ 92,261 December 31, 2021 Gross Gross Amortized Unrealized Unrealized Estimated (In thousands) Cost Gains Losses Fair Value US government securities Level 1 $ 29,986 $ — $ (2) $ 29,984 Corporate notes Level 2 5,034 — (2) 5,032 Commercial paper Level 2 48,490 1 (1) 48,490 Marketable securities 83,510 1 (5) 83,506 Money market funds Level 1 50,228 — — 50,228 Total $ 133,738 $ 1 $ (5) $ 133,734 |
Schedule of Available for sale debt securities with unrealized losses | June 30, 2022 Less than 12 Months Greater than 12 Months Total Gross Gross Gross Estimated Unrealized Estimated Unrealized Estimated Unrealized (In thousands) Fair Value Losses Fair Value Losses Fair Value Losses US government securities $ 13,954 $ (12) $ — $ — $ 13,954 $ (12) Corporate notes 11,996 (20) — — 11,996 (20) Commercial paper 19,607 (15) — — 19,607 (15) Total $ 45,557 $ (47) $ — $ — $ 45,557 $ (47) December 31, 2021 Less than 12 Months Greater than 12 Months Total Gross Gross Gross Estimated Unrealized Estimated Unrealized Estimated Unrealized (In thousands) Fair Value Losses Fair Value Losses Fair Value Losses US government securities $ 19,991 $ (2) $ — $ — $ 19,991 $ (2) Corporate notes 5,031 (2) — — 5,031 (2) Commercial paper 9,995 (1) — — 9,995 (1) Total $ 35,017 $ (5) $ — $ — $ 35,017 $ (5) |
Debt (Tables)
Debt (Tables) | 6 Months Ended |
Jun. 30, 2022 | |
Debt | |
Schedule of debt | June 30, (In thousands) 2022 9.5% Non-Recourse 2035 Notes: Principal amount $ 421,050 Less: (21,053) Unamortized debt issuance costs - (2,741) Unamortized debt issuance costs - Modified (1,131) 396,125 3.25% Convertible 2023 Notes: Principal amount 230,000 Unamortized debt issuance costs (1,429) 228,571 Total debt $ 624,696 |
Leases (Tables)
Leases (Tables) | 6 Months Ended |
Jun. 30, 2022 | |
Sublease | |
Lessor, Lease, Description [Line Items] | |
Schedule of future undiscounted cash inflows relating to sublease agreement | (In thousands) Year ending December 31: 2022 $ 3,562 2023 6,509 2024 6,509 2025 6,509 2026 6,509 Thereafter 22,241 Total operating sublease receipts $ 51,839 |
Theravance Respiratory Compan_2
Theravance Respiratory Company, LLC (Tables) | 6 Months Ended |
Jun. 30, 2022 | |
Theravance Respiratory Company, LLC | |
Summary financial information | Three Months Ended June 30, Six Months Ended June 30, (In thousands) 2022 2021 2022 2021 Royalty revenue and gross profit $ 42,720 $ 26,386 $ 72,029 $ 48,470 Income from continuing operations 42,581 26,050 71,693 44,853 Net income 33,091 25,796 62,632 44,116 |
Corporate Restructuring Update
Corporate Restructuring Update (Tables) | 6 Months Ended |
Jun. 30, 2022 | |
Corporate Restructuring Update | |
Schedule of information related to accrued restructuring, severance costs and one-time termination | (In thousands) Balance at December 31, 2021 $ 9,550 Net accruals 6,275 Cash paid (15,233) Balance at June 30, 2022 $ 592 |
Organization and Summary of S_3
Organization and Summary of Significant Accounting Policies (Details) $ in Millions | Jul. 20, 2022 USD ($) | Jun. 30, 2022 | Feb. 21, 2020 |
Non-Recourse 2035 Notes | |||
Organization and Summary of Significant Accounting Policies | |||
Interest rate (as a percent) | 9.50% | 9.50% | |
Non-Recourse 2035 Notes | Subsequent Events | |||
Organization and Summary of Significant Accounting Policies | |||
Interest rate (as a percent) | 9.50% | ||
Repayments of long-term debt | $ 420 | ||
Royalty Pharma | Subsequent Events | Purchase Agreement to Sell Units in Theravance Respiratory Company, LLC | |||
Organization and Summary of Significant Accounting Policies | |||
Percentage of Right to Receive Royalty Transferring | 85 |
Net Loss per Share (Details)
Net Loss per Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | |
Numerator: | ||||
Net loss | $ (8,191) | $ (52,405) | $ (34,137) | $ (132,084) |
Denominator: | ||||
Weighted-average ordinary shares outstanding | 76,270 | 65,669 | 75,761 | 65,199 |
Less: weighted-average ordinary shares subject to forfeiture | (114) | |||
Weighted-average shares used to compute basic net loss per share | 76,270 | 65,669 | 75,761 | 65,085 |
Weighted-average shares used to compute diluted net loss per share | 76,270 | 65,669 | 75,761 | 65,085 |
Basic net loss per share | $ (0.11) | $ (0.80) | $ (0.45) | $ (2.03) |
Diluted net loss per share | $ (0.11) | $ (0.80) | $ (0.45) | $ (2.03) |
Net Loss per Share - Anti-dilut
Net Loss per Share - Anti-dilutive Securities (Details) - shares shares in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | |
Anti-Dilutive Securities | ||||
Anti-dilutive securities (in shares) | 12,336 | 12,904 | 12,915 | 14,983 |
Share issuances under equity incentive plans and ESPP | ||||
Anti-Dilutive Securities | ||||
Anti-dilutive securities (in shares) | 5,660 | 6,228 | 6,239 | 8,307 |
Share issuances upon the conversion of convertible senior notes | ||||
Anti-Dilutive Securities | ||||
Anti-dilutive securities (in shares) | 6,676 | 6,676 | 6,676 | 6,676 |
Revenue - Viatris Agreement (De
Revenue - Viatris Agreement (Details) - USD ($) $ in Thousands | 1 Months Ended | 3 Months Ended | 6 Months Ended | ||
Feb. 28, 2018 | Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | |
Collaborative Arrangements and Co-Promote Agreement | |||||
Revenues | $ 11,050 | $ 12,914 | $ 24,246 | $ 27,171 | |
Percentage of profit share | 35% | ||||
Research and development | 15,571 | 51,093 | $ 38,824 | 118,692 | |
Collaborative revenue | |||||
Collaborative Arrangements and Co-Promote Agreement | |||||
Revenues | 172 | 1,980 | 181 | 5,852 | |
Revefenacin Monotherapy (TD-4208) | |||||
Collaborative Arrangements and Co-Promote Agreement | |||||
Upfront payment receivable | 205,000 | ||||
Revefenacin Monotherapy (TD-4208) | Success Based Development Regulatory And Sales Milestones | |||||
Collaborative Arrangements and Co-Promote Agreement | |||||
Upfront payment receivable | 17,500 | ||||
Revefenacin Monotherapy (TD-4208) | Sales milestones | |||||
Collaborative Arrangements and Co-Promote Agreement | |||||
Upfront payment receivable | 187,500 | ||||
Future potential combination products | |||||
Collaborative Arrangements and Co-Promote Agreement | |||||
Upfront payment receivable | 52,500 | ||||
YUPELRI Monotherapy | |||||
Collaborative Arrangements and Co-Promote Agreement | |||||
Upfront payment receivable | 205,000 | ||||
Collaborative Arrangement | |||||
Collaborative Arrangements and Co-Promote Agreement | |||||
Revenues | 172 | 1,980 | |||
Collaborative Arrangement | Alfasigma license option | |||||
Collaborative Arrangements and Co-Promote Agreement | |||||
Revenues | 166 | 3 | |||
Collaborative Arrangement | Collaborative revenue | |||||
Collaborative Arrangements and Co-Promote Agreement | |||||
Revenues | 181 | 5,852 | |||
Collaborative Arrangement | Collaborative revenue | Alfasigma license option | |||||
Collaborative Arrangements and Co-Promote Agreement | |||||
Revenues | 169 | 7 | |||
Janssen | Collaborative Arrangement | |||||
Collaborative Arrangements and Co-Promote Agreement | |||||
Revenues | 1,971 | ||||
Janssen | Collaborative Arrangement | Collaborative revenue | |||||
Collaborative Arrangements and Co-Promote Agreement | |||||
Revenues | 5,833 | ||||
Janssen | Development and Commercialization Agreement | |||||
Collaborative Arrangements and Co-Promote Agreement | |||||
Upfront payment receivable | $ 100,000 | ||||
Revenue from collaborative arrangements | 2,000 | 5,800 | |||
Viatris | |||||
Collaborative Arrangements and Co-Promote Agreement | |||||
Upfront payment receivable | $ 257,500 | ||||
Percentage of profit share | 65% | ||||
Viatris | YUPELRI Monotherapy | |||||
Collaborative Arrangements and Co-Promote Agreement | |||||
Revenues | $ 17,200 | $ 14,600 | $ 32,500 | $ 27,500 | |
Percentage of profit share | 35% | 35% | 35% | 35% | |
Viatris | Collaborative Arrangement | Collaborative revenue | |||||
Collaborative Arrangements and Co-Promote Agreement | |||||
Revenues | $ 10,878 | $ 10,934 | $ 21,565 | $ 21,319 | |
Other | Collaborative Arrangement | |||||
Collaborative Arrangements and Co-Promote Agreement | |||||
Revenues | $ 6 | $ 6 | |||
Other | Collaborative Arrangement | Collaborative revenue | |||||
Collaborative Arrangements and Co-Promote Agreement | |||||
Revenues | $ 12 | $ 12 |
Revenue - Development and Comme
Revenue - Development and Commercialization Agreement (Details) - USD ($) $ in Thousands | 1 Months Ended | 3 Months Ended | 6 Months Ended | 12 Months Ended | |||
Mar. 31, 2022 | Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | Dec. 31, 2019 | Dec. 31, 2015 | |
Collaborative Arrangements and Co-Promote Agreement | |||||||
Milestone payment | $ 11,050 | $ 12,914 | $ 24,246 | $ 27,171 | |||
Percentage of profit share | 35% | ||||||
Collaborative Arrangement | |||||||
Collaborative Arrangements and Co-Promote Agreement | |||||||
Milestone payment | 172 | 1,980 | |||||
Viatris | |||||||
Collaborative Arrangements and Co-Promote Agreement | |||||||
Percentage of profit share | 65% | ||||||
Viatris | Revefenacin Monotherapy (TD-4208) | |||||||
Collaborative Arrangements and Co-Promote Agreement | |||||||
Initial cash payment | $ 15,000 | ||||||
Transaction price | $ 15,000 | ||||||
Viatris | YUPELRI Monotherapy | |||||||
Collaborative Arrangements and Co-Promote Agreement | |||||||
Milestone payment | $ 17,200 | $ 14,600 | $ 32,500 | $ 27,500 | |||
Percentage of profit share | 35% | 35% | 35% | 35% | |||
Pfizer | |||||||
Collaborative Arrangements and Co-Promote Agreement | |||||||
Initial cash payment | $ 10,000 | ||||||
Milestone payment | $ 2,500 | ||||||
Pfizer | Sales milestones | |||||||
Collaborative Arrangements and Co-Promote Agreement | |||||||
Initial cash payment | $ 237,500 |
Revenue - Reimbursement of R an
Revenue - Reimbursement of R and D Costs (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | |
Research and Development Reimbursement | ||||
Total reduction to R and D expense | $ 1,543 | $ 1,260 | $ 3,079 | $ 2,686 |
Janssen | ||||
Research and Development Reimbursement | ||||
Total reduction to R and D expense | 1,193 | 2,525 | ||
Viatris | ||||
Research and Development Reimbursement | ||||
Total reduction to R and D expense | $ 1,543 | $ 67 | $ 3,079 | $ 161 |
Sale of Velusetrag (Details)
Sale of Velusetrag (Details) - Sale of Velusetrag. - Disposed of by Sale - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |
Jun. 30, 2022 | Jun. 30, 2022 | Jul. 31, 2022 | |
Sale of Velusetrag | |||
Remaining book value of assets | $ 0 | $ 0 | |
Gain on sale of velusetrag assets | 2,700 | 2,700 | |
Maximum | |||
Sale of Velusetrag | |||
Future developmental and sales milestones | $ 105,000 | $ 105,000 | |
Subsequent Events | |||
Sale of Velusetrag | |||
Consideration from sale of velusetrag assets | $ 2,800 |
Cash, Cash Equivalents, and R_3
Cash, Cash Equivalents, and Restricted Cash (Details) - USD ($) $ in Thousands | Jun. 30, 2022 | Dec. 31, 2021 | Jun. 30, 2021 | Dec. 31, 2020 |
Cash and cash equivalents | $ 87,292 | $ 89,959 | $ 204,949 | |
Restricted cash | 836 | 833 | ||
Total cash, cash equivalents, and restricted cash shown on the condensed consolidated statements of cash flows | $ 88,128 | $ 90,796 | $ 205,782 | $ 82,300 |
9.5% non-recourse notes due 2035 | ||||
Interest rate (as a percent) | 9.50% |
Investments and Fair Value Me_3
Investments and Fair Value Measurements - Available-for-sale securities (Details) - USD ($) $ in Thousands | Jun. 30, 2022 | Dec. 31, 2021 |
Available for sale securities: | ||
Amortized Cost | $ 92,308 | $ 133,738 |
Gross Unrealized Gains | 1 | |
Gross Unrealized Losses | (47) | (5) |
Estimated Fair Value | 92,261 | 133,734 |
Debt Securities, Available-for-sale, Unrealized Gain (Loss) [Abstract] | ||
Estimated Fair Value lesser than 12 months | 45,557 | 35,017 |
Estimated Fair Value Total | 45,557 | 35,017 |
Gross unrealized lesser than 12 months | (47) | (5) |
Gross unrealized loss, Total | (47) | (5) |
Marketable securities | ||
Available for sale securities: | ||
Amortized Cost | 50,582 | 83,510 |
Gross Unrealized Gains | 1 | |
Gross Unrealized Losses | (47) | (5) |
Estimated Fair Value | 50,535 | 83,506 |
U.S. government securities | ||
Debt Securities, Available-for-sale, Unrealized Gain (Loss) [Abstract] | ||
Estimated Fair Value lesser than 12 months | 13,954 | 19,991 |
Estimated Fair Value Total | 13,954 | 19,991 |
Gross unrealized lesser than 12 months | (12) | (2) |
Gross unrealized loss, Total | (12) | (2) |
U.S. government securities | Quoted Prices in Active Markets for Identical Assets, Level 1 | ||
Available for sale securities: | ||
Amortized Cost | 13,967 | 29,986 |
Gross Unrealized Losses | (12) | (2) |
Estimated Fair Value | 13,955 | 29,984 |
U.S. corporate notes | ||
Debt Securities, Available-for-sale, Unrealized Gain (Loss) [Abstract] | ||
Estimated Fair Value lesser than 12 months | 11,996 | 5,031 |
Estimated Fair Value Total | 11,996 | 5,031 |
Gross unrealized lesser than 12 months | (20) | (2) |
Gross unrealized loss, Total | (20) | (2) |
U.S. corporate notes | Significant Other Observable Inputs, Level 2 | ||
Available for sale securities: | ||
Amortized Cost | 12,016 | 5,034 |
Gross Unrealized Losses | (20) | (2) |
Estimated Fair Value | 11,996 | 5,032 |
U.S. commercial paper | ||
Debt Securities, Available-for-sale, Unrealized Gain (Loss) [Abstract] | ||
Estimated Fair Value lesser than 12 months | 19,607 | 9,995 |
Estimated Fair Value Total | 19,607 | 9,995 |
Gross unrealized lesser than 12 months | (15) | (1) |
Gross unrealized loss, Total | (15) | (1) |
U.S. commercial paper | Significant Other Observable Inputs, Level 2 | ||
Available for sale securities: | ||
Amortized Cost | 24,599 | 48,490 |
Gross Unrealized Gains | 1 | |
Gross Unrealized Losses | (15) | (1) |
Estimated Fair Value | 24,584 | 48,490 |
Money market funds | Quoted Prices in Active Markets for Identical Assets, Level 1 | ||
Available for sale securities: | ||
Amortized Cost | 41,726 | 50,228 |
Estimated Fair Value | $ 41,726 | $ 50,228 |
Investments and Fair Value Me_4
Investments and Fair Value Measurements - Convertible senior notes (Details) $ in Thousands | 6 Months Ended |
Jun. 30, 2022 USD ($) | |
Maturity period for marketable securities | |
Maximum contractual maturity period | 6 months |
Weighted average contractual maturity period | 4 months |
Fair value transfers | |
Fair value of assets transferred from Level 1 to Level 2 | $ 0 |
Fair value of assets transferred from Level 2 to Level 1 | 0 |
Unrealized losses | |
Net unrealized losses | $ 0 |
Debt (Details)
Debt (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | Feb. 21, 2020 | |
Debt Instrument [Line Items] | |||||
Total long-term debt | $ 624,696 | $ 624,696 | |||
Long-term debt interest expense | |||||
Total debt interest expense | 11,884 | $ 11,612 | 23,539 | $ 23,485 | |
Principal payment on notes | 10,730 | ||||
9.5% Non-Recourse 2035 Notes | |||||
Debt Instrument [Line Items] | |||||
Principal amount | 421,050 | 421,050 | $ 400,000 | ||
Less: 5% retained by the Company | (21,053) | (21,053) | |||
Unamortized debt issuance costs | (2,741) | (2,741) | |||
Total long-term debt | $ 396,125 | $ 396,125 | |||
Long-term debt interest expense | |||||
Interest rate (as a percent) | 9.50% | 9.50% | 9.50% | ||
Percentage of note to be sold | 95% | ||||
Percentage of note to be retained | 5% | ||||
Net principal | $ 400,000 | $ 400,000 | |||
Estimated fair value | 380,000 | 380,000 | |||
9.0% Non-Recourse 2033 Notes | |||||
Debt Instrument [Line Items] | |||||
Unamortized debt issuance costs | (1,131) | (1,131) | |||
Long-term debt interest expense | |||||
Total debt interest expense | $ 1,900 | $ 300 | $ 3,700 | $ 500 | |
Interest rate (as a percent) | 9% | 9% | |||
3.25% Convertible Senior Notes Due 2023 | |||||
Debt Instrument [Line Items] | |||||
Principal amount | $ 230,000 | $ 230,000 | |||
Unamortized debt issuance costs | (1,429) | (1,429) | |||
Total long-term debt | $ 228,571 | $ 228,571 | |||
Long-term debt interest expense | |||||
Interest rate (as a percent) | 3.25% | 3.25% | |||
Notes fair value | $ 210,500 | $ 210,500 | |||
TRC | |||||
Long-term debt interest expense | |||||
Percentage of economic interest | 85% | ||||
Net interest shortfall | $ 2,700 | $ 7,400 | |||
Percentage of equity interest | 85% | 85% | |||
Net interest shortfall | $ 30,700 | $ 30,700 | |||
Net principal paydown | $ 10,700 | $ 10,700 | |||
TRC | Minimum | |||||
Long-term debt interest expense | |||||
Upward tiering royalties (as a percent) | 6.50% | ||||
TRC | Maximum | |||||
Long-term debt interest expense | |||||
Upward tiering royalties (as a percent) | 10% | ||||
TRC | Issuer II Class C Units | |||||
Long-term debt interest expense | |||||
Percentage of economic interest | 75% | ||||
Theravance Biopharma R&D, Inc. | |||||
Long-term debt interest expense | |||||
Percentage of economic interest | 63.75% | ||||
Theravance Biopharma R&D, Inc. | 9.5% Non-Recourse 2035 Notes | |||||
Long-term debt interest expense | |||||
Interest rate (as a percent) | 5% | 5% |
Leases (Details)
Leases (Details) $ in Thousands | 1 Months Ended | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2022 USD ($) ft² | May 31, 2022 USD ($) ft² | Jun. 30, 2022 USD ($) ft² | Jun. 30, 2022 USD ($) ft² | Jun. 30, 2021 USD ($) | Apr. 30, 2017 ft² | |
Lessee, Lease, Description [Line Items] | ||||||
Decrease in operating lease liabilities | $ (82) | $ (1,718) | ||||
Gain on lease modification | 47 | |||||
Sublease | ||||||
Lessee, Lease, Description [Line Items] | ||||||
Expects to receive base rent | $ 51,839 | $ 51,839 | $ 51,839 | |||
Dublin | ||||||
Lessee, Lease, Description [Line Items] | ||||||
Area of leased space | ft² | 700 | 6,100 | ||||
Decrease in operating lease assets | $ 1,400 | |||||
Decrease in operating lease liabilities | 1,500 | |||||
Loss on sale of furniture and equipment | 100 | |||||
Operating lease expenses | $ 400 | |||||
Option to terminate | true | |||||
Lease term | 2 years | |||||
Lease termination notice period | 3 months | |||||
South San Francisco | ||||||
Lessee, Lease, Description [Line Items] | ||||||
Area of subleased property | ft² | 78,000 | 78,000 | 78,000 | |||
South San Francisco | Sublease | ||||||
Lessee, Lease, Description [Line Items] | ||||||
Option to terminate sublease | false | |||||
Monthly base rent | $ 500 | |||||
Increase in annual base rent (as a percent) | 3% | |||||
Expected sublease income | $ 300 | $ 300 | ||||
Premium component in sublease income | $ 13,600 | |||||
Percentage of excess sublease income over lease obligations received to be shared with lessor | 50% | |||||
Premium component in sublease income to be shared with lessor | $ 6,800 | |||||
Percentage of excess sublease income over lease obligations to be retained | 50% | |||||
Expects to receive base rent | $ 51,800 | $ 51,800 | $ 51,800 |
Leases - Future Undiscounted Ca
Leases - Future Undiscounted Cash Inflows Relating to Sublease Agreement (Details) - Sublease $ in Thousands | Jun. 30, 2022 USD ($) |
Future Undiscounted Cash Inflows | |
2022 | $ 3,562 |
2023 | 6,509 |
2024 | 6,509 |
2025 | 6,509 |
2026 | 6,509 |
Thereafter | 22,241 |
Total operating sublease receipts | $ 51,839 |
Theravance Respiratory Compan_3
Theravance Respiratory Company, LLC (Details) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2022 USD ($) | Jun. 30, 2021 USD ($) | Jun. 30, 2022 USD ($) item | Jun. 30, 2021 USD ($) | |
TRC | ||||
Theravance Respiratory Company, LLC | ||||
Percentage of equity interest | 85% | 85% | ||
Percentage of economic interest | 85% | |||
Number of fiscal quarters | item | 4 | |||
Royalty payments | $ 28.1 | $ 21.9 | $ 53.2 | $ 38.5 |
Royalty expenses | 0.1 | $ 0.3 | 0.3 | $ 3.1 |
Long-term asset | 148.3 | 148.3 | ||
Net unrealized loss | 8.1 | 7.7 | ||
Payment received | $ 9.5 | $ 16.1 | ||
NDA Group | ||||
Theravance Respiratory Company, LLC | ||||
Percentage of equity interest | 85% | 85% |
Theravance Respiratory Compan_4
Theravance Respiratory Company, LLC - Summary financial information (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | Dec. 31, 2021 | |
Summary financial information | |||||
Current assets | $ 154,729 | $ 154,729 | $ 249,870 | ||
Current liabilities | 32,624 | 32,624 | $ 58,587 | ||
Revenues | 11,050 | $ 12,914 | 24,246 | $ 27,171 | |
Net income | (8,191) | (52,405) | (34,137) | (132,084) | |
TRC | |||||
Summary financial information | |||||
Income from continuing operations | 42,581 | 26,050 | 71,693 | 44,853 | |
Net income | $ 33,091 | 25,796 | $ 62,632 | 44,116 | |
Percentage of equity interest | 85% | 85% | |||
TRC | Royalties | |||||
Summary financial information | |||||
Revenues | $ 42,720 | $ 26,386 | $ 72,029 | $ 48,470 |
Share-Based Compensation - Perf
Share-Based Compensation - Performance Contingent Awards (Details) $ in Thousands | 1 Months Ended | 3 Months Ended | 6 Months Ended | ||
Sep. 30, 2021 USD ($) | Jun. 30, 2022 USD ($) | Jun. 30, 2021 USD ($) | Jun. 30, 2022 USD ($) employee shares | Jun. 30, 2021 USD ($) | |
Share-Based Compensation | |||||
Incremental Share-Based Compensation expense | $ 400 | $ 1,700 | |||
Cumulative compensation cost | $ 800 | ||||
Total share-based compensation expense | 9,709 | $ 14,941 | 24,254 | $ 30,773 | |
Research and development | |||||
Share-Based Compensation | |||||
Total share-based compensation expense | 3,556 | 7,315 | 8,086 | 15,236 | |
Selling, general and administrative | |||||
Share-Based Compensation | |||||
Total share-based compensation expense | 5,794 | 7,626 | $ 11,292 | 15,537 | |
Restructuring and related expenses | |||||
Share-Based Compensation | |||||
Incremental Share-Based Compensation expense | $ 2,500 | ||||
Number of employees reduction in workforce | employee | 45 | ||||
Total share-based compensation expense | 359 | $ 4,876 | |||
Performance-Contingent Awards - RSUs | |||||
Share-Based Compensation | |||||
RSUs outstanding (in shares) | shares | 305,000 | ||||
Performance-Contingent Awards - RSUs. | |||||
Share-Based Compensation | |||||
Total share-based compensation expense | $ 100 | $ 100 | $ 200 | $ 600 | |
Maximum potential expense | Performance-Contingent Awards - RSUs. | |||||
Share-Based Compensation | |||||
Total share-based compensation expense | $ 2,500 |
Income Taxes - Components of pr
Income Taxes - Components of provision for income taxes (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | |
Provision for income tax benefit (expense) | ||||
Income tax benefit (expense) | $ 5 | $ 220 | $ (519) | $ (7) |
Provision for income taxes on undistributed earnings of foreign subsidiaries | $ 0 | $ 0 |
Corporate Restructuring Updat_2
Corporate Restructuring Update (Details) - USD ($) $ in Thousands | 1 Months Ended | 3 Months Ended | 6 Months Ended | 9 Months Ended | 10 Months Ended | |||
Nov. 30, 2021 | Sep. 15, 2021 | Sep. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2022 | Jun. 30, 2022 | Jun. 30, 2022 | Sep. 30, 2022 | |
Corporate Restructuring | ||||||||
Reduction in workforce (as a percent) | 75% | 75% | ||||||
Cash expenses related to the costs of employee severance | $ 17,600 | $ 17,600 | $ 17,600 | $ 17,600 | ||||
Restructuring costs | 1,594 | 10,918 | 31,100 | |||||
Non-cash charges related to modification of equity-awards for terminated and remaining employee | $ 14,300 | |||||||
Restructuring and related expenses percentage | 97% | |||||||
Forecast | ||||||||
Corporate Restructuring | ||||||||
Cash expenses related to the costs of employee severance | $ 800 | |||||||
Research and development | ||||||||
Corporate Restructuring | ||||||||
Restructuring costs | 400 | $ 5,100 | 15,700 | |||||
Selling, general and administrative | ||||||||
Corporate Restructuring | ||||||||
Restructuring costs | $ 15,400 | 1,200 | 5,800 | $ 15,400 | ||||
Severance | ||||||||
Corporate Restructuring | ||||||||
Employee-related separation costs | 1,600 | 10,900 | ||||||
Restructuring costs | 31,100 | |||||||
Cash charges related to modification of equity-awards for terminated and remaining employee | 1,200 | 6,000 | 17,600 | |||||
Non-cash charges related to modification of equity-awards for terminated and remaining employee | $ 400 | 4,900 | $ 13,500 | |||||
Minimum | ||||||||
Corporate Restructuring | ||||||||
Employee-related separation costs | $ 31,900 |
Corporate Restructuring Updat_3
Corporate Restructuring Update - Accrued restructuring, severance costs and one-time termination costs (Details) $ in Thousands | 6 Months Ended |
Jun. 30, 2022 USD ($) | |
Restructuring Reserve [Roll Forward] | |
Balance at December 31, 2021 | $ 9,550 |
Net accruals | 6,275 |
Cash paid | (15,233) |
Balance at March 31, 2022 | $ 592 |
Subsequent Events (Details)
Subsequent Events (Details) - Purchase Agreement to Sell Units in Theravance Respiratory Company, LLC - Royalty Pharma - Subsequent Events $ in Millions | Jul. 20, 2022 USD ($) shares |
Subsequent Event [Line Items] | |
Percentage of Right to Receive Royalty Transferring | 85 |
Proceeds from sale of units. | $ | $ 1,100 |
Consideration Receivable at closing | $ | $ 250 |
Class B Units | |
Subsequent Event [Line Items] | |
Units issued | shares | 2,125 |
Class C Units | |
Subsequent Event [Line Items] | |
Units issued | shares | 6,375 |
Subsequent Events - Ampreloxeti
Subsequent Events - Ampreloxetine Funding (Details) $ in Thousands | 3 Months Ended | 6 Months Ended | |
Jul. 20, 2022 USD ($) | Jun. 30, 2022 USD ($) | Jun. 30, 2022 USD ($) | |
Subsequent Event [Line Items] | |||
Legal expenses | $ 3,778 | $ 5,057 | |
Ampreloxetine Royalty Rights | Subsequent Events | |||
Subsequent Event [Line Items] | |||
Consideration Receivable at closing | $ 25,000 | ||
Consideration received at the time of first approval | $ 15,000 | ||
Patent Application Period | 5 years | ||
Ampreloxetine Royalty Rights | Net Sales Upto First 500 Million | Subsequent Events | |||
Subsequent Event [Line Items] | |||
Consideration received | $ 500,000 | ||
Royalty Payment Percentage Multiplied with Net Sales | 2.5 | ||
Ampreloxetine Royalty Rights | Net Sales In Excess of 500 Million | Subsequent Events | |||
Subsequent Event [Line Items] | |||
Consideration received | $ 500,000 | ||
Royalty Payment Percentage Multiplied with Net Sales | 4.5 |
Subsequent Events - Repayment o
Subsequent Events - Repayment of Debt and Return of Shareholder Capital (Details) - Subsequent Events - USD ($) $ in Millions | Jul. 20, 2022 | Jul. 26, 2022 |
Non-Recourse 2035 Notes | ||
Subsequent Event [Line Items] | ||
Repayments of long-term debt | $ 420 | |
3.25% Convertible Senior Notes Due 2023 | ||
Subsequent Event [Line Items] | ||
Retirement of debt | $ 230 |