Hi, welcome back. I'm joined by Rick and Aziz from Theravance. Welcome both of you. Why don't you introduce yourself and also give us a high-level overview of the portfolio of assets at Theravance?
Sure. Thank you for inviting us, and thanks to Jones for inviting us to present and talk about the company today. Theravance, small company, South San Francisco. We have three primary operating assets that we'll talk through today. The first that I'll cover is a drug, YUPELRI, that was discovered at Theravance. It's been developed by Theravance. It's a once-daily nebulized long-acting muscarinic antagonist. Now, that's a mouthful to treat COPD patients. Now, effectively, it's a bronchodilator. It increases the airway size and capacity of patients when they take it in. It's once a day. It's the only once-a-day long-acting muscarinic antagonist for COPD delivered through a nebulizer. We work with Viatris in the marketing, and we have a 35% profit split. That product right now throws off about $40 million worth of profit a year or two.
It's growing, and it's growing nicely, and we're really still tapping into the market. The second product is Ampreloxetine. This is a neurological product that's in phase III clinical trials. We expect to finish enrollment into the open label period of the phase III study in the middle of this year and then into data. Could it close the trial about 20 weeks later and about 26 weeks later or so having the data? This is a medicine that seeks to treat patients that have multiple system atrophy and neurogenic orthostatic hypotension. MSA is a condition like Parkinson's, but different. We can get into that a little bit. It's a rare condition, 40,000 patients.
There is really nothing to treat these patients today in their neurogenic orthostatic hypotension, which really restricts these patients to a couch or a lazy boy relatively early in the course of their disease. I think we can make a significant difference. That is why we are working on it. We will talk more about it. I will turn it over to Aziz for the other.
Yeah. The last value driver of the company is Trelegy. Trelegy is a product that GSK sells right now for the treatment of COPD and asthma. Generated about $3.5 billion of net sales last year, grew about 28%. Trelegy was originally developed by Theravance. We sold the royalty. We out-licensed to GSK many years ago for a royalty. We sold that royalty a couple of years back, but we retained certain economics on the brand in form of milestones. We have about $150 million of milestones for hitting certain sales targets this year and next year. We actually hit the one from last year, got $50 million bucks in the bank in February. The royalties actually also come back to us in about five years in 2029. We think we'll have those royalties well into the 2030s.
Two substantial major value drivers for Trelegy above and beyond YUPELRI and ampreloxetine. We'll get into the financials in a little bit, but we have an excellent balance sheet, minimal cash burn, and no debt. I think that differentiates ourselves in this capital in the market today. We don't need to raise any money. A really clean financial profile.
Sure. We are probably less than a year away from the phase III data for the NOH opportunity. Let's start there and ampreloxetine. You already mentioned the number of patients that are out there. If there's no drugs, how are they being managed currently?
Yeah, great question there. Manage non-pharmacologic efforts like binders and things around the abdomen to keep pressure into the upper extremities. There are medicines that raise blood pressure that they take, but the problem with the medicines that raise blood pressure either by increasing fluid volume or by adding effectively norepinephrine into the system, those are uncontrolled once they go into the body. It results in not only extremely variable blood pressure, but it also results in supine hypertension. If these patients lay down, those medicines continue to work and, in fact, drive up patients' blood pressure to very high levels, which is not good, obviously, for a patient who's already suffering from multiple system atrophy. The difference with ampreloxetine is it's a norepinephrine reuptake inhibitor at 10 mg once daily, a very long half-life, so no real peak to trough once you get at steady state.
The product generates additional norepinephrine in the peripheral nerves. That is really the difference between MSA and Parkinson's disease. In MSA, the patient's nerves in the periphery are largely intact. The problem with MSA is the central nerves and in the brain, the putamen and the pons are affected. We can take those intact peripheral nerves with a norepinephrine reuptake inhibitor, raise the level of norepinephrine when there is noradrenergic drive, when the patient is sitting up or when the patient is standing, increase levels of norepinephrine such that we get constriction of the blood vessels, driving perfusion into a variety of different organ systems. The benefit is when the patient sits down or lays down and that noradrenergic drive is absent, those norepinephrine levels can fall.
In fact, that's one of the advantages we think that ampreloxetine will have is a lack of supine hypertension, a lack of this high blood pressure when patients are resting. That would be a big deal. Not only on the efficacy side, do we have a chance to have really unparalleled efficacy through measurement of a composite score. We also, on the other side, on the risk side, have a chance to deliver a medicine that does not carry a risk of supine hypertension. Very, very exciting. For me, it's sort of beyond a, you know, I've worked on drug development for a long time. This program is special because my father died of multiple system atrophy. He had terrible neurogenic orthostatic hypotension.
The interesting aspect about NOH is it's really a key diagnostic criteria for MSA because this is what shows up first in these patients. I think we have a chance to make a significant difference in these patients with NOH and help them to really maintain their living and their lifestyle relatively unimpeded for a much longer period of time.
Sure. So you have really felt it personally, the patient journey in MSA and people who have orthostatic hypotension. How are these people diagnosed? What proportion of the population actually seek treatment? Are they treated by PCPs or like their specialists?
Yeah, they're usually treated by neurologists. Some patients are treated by cardiologists because obviously they begin to complain of dizziness. The first thought is, oh, well, there's an arrhythmia here. They go to the cardiologist and they're seen there. Now, to be diagnosed with MSA, it's a bit of a journey for any patient. Those 40,000 that I mentioned, those are 40,000 patients that are diagnosed today with MSA. Are there patients that are misdiagnosed and have MSA but are diagnosed with Parkinson's disease? Absolutely. Absolutely, they are. It does take a fairly sophisticated neurologist to do the diagnostic work, one who's familiar with dysautonomia as well as the neurological and motor symptoms. Once they're diagnosed, they can be treated by a neurologist, a community neurologist.
The simpler we can make the treatment, the easier it is for the patient to comply with the treatment and the easier it is for the caregiver to help the patient with the treatment.
Sure. What has been the clinical experience with ampreloxetine thus far in terms of safety and efficacy?
We ran an earlier study, an earlier phase III study. In that phase III study, really at the behest of the FDA, we included Parkinson's patients, we included MSA patients, and we included patients with primary autonomic failure. We believe that MSA patients would show the most robust response to this agent because of intact peripheral nerves. The status of the peripheral nerves in Parkinson's patients is much more variable. We went back and forth several years ago with the FDA, and finally, they were fairly insistent in studying this broad set of patients. We said, we're going to over-enroll the study for MSA patients, and we're going to design the analysis plan pre-specified by subgroup so that we would be able to see what the effect was in each of these diseases. Now, overall, the trial was not successful.
In the MSA population, we saw a nominally and clinically significant benefit to these patients. What we've tried to do today, we took the data into the FDA. They agreed with our interpretation. They said it was a supportive study for an NDA. They wanted us to do one more study that focused on MSA patients. That study that we're currently conducting and about to finish, that study is nearly a replica of the earlier study because we wanted to keep it as close as we could to the earlier design. There's a couple of changes. We've increased the randomized withdrawal, and we can come back to that randomized withdrawal period from six weeks to eight weeks. Because of the earlier study, it looked like patients were still improving at six weeks. We shortened a bit the open label portion.
It's an open label study, and patients stay on drug for a period of time, and then they go into a randomized withdrawal versus placebo for eight weeks and are measured using the OHSA composite score.
Sure. Could you give us any more color on the timeline for the phase III completion and the top-line readout?
Sure. Mid-year is our guidance for completing the open label portion of the study. After the open label portion, that last patient gets about 20 weeks' worth of treatment. After 20 weeks' worth of treatment, they will have finished the randomized withdrawal period. That randomized withdrawal period, that's when we measure the endpoint. A few weeks after the last patient, last visit, and we have all the data, we should have data available top line, certainly, for the results of the study. We're not that far away from phase III data. Given that there's really nothing that treats these patients today, we fully expect, if the study is positive, a priority review. We're already working on the NDA because everything for us to create the NDA is done except this clinical study.
This is a little bit of being free with a little words here by regulatory group would say, but we drop in the clinical data and do our NDA, and then we move forward with the filing.
What are your expectations in terms of efficacy in this particular study in terms of efficacy?
Sure. We saw over a one-point change in the earlier study in MSA patients. That is what we would expect to see this time. A one-point change in the OHSA composite index has been shown, and we have presented this data at the American Autonomic Society, has been shown to be clinically meaningful. Our target really is one point or better in the OHSA composite score. That would be the first drug of its kind to show this sort of benefit to these patients. The improvement, it is not only an improvement in lightheadedness and dizziness, but it is an improvement in vision, in coat hanger pain, in fatigue and weakness, et cetera. There is really an overall improvement in well-being in these patients.
Sure. In terms of safety profile, are there any signals that you would be looking out for?
Yeah, it's a great question. Of course, since supine hypertension is an adverse event of special interest, we're always on the lookout for that. We just presented this week at the American Academy of Neurology the analysis of supine hypertension from the earlier phase III study, which really showed that there was not an increase in treatment emergent supine hypertension with the administration of ampreloxetine. That's important because almost all of these patients struggle with supine hypertension at baseline because their autonomic nervous system is failing. What we want to make sure to do is to not significantly worsen the problem of supine hypertension. Thus far, we haven't seen it. The reason that we haven't seen it is biology.
Once that noradrenergic drive is gone, i.e., they're laying down for a period of time, that norepinephrine is no longer being produced and going into the nerves and then the vasculature. Without that norepinephrine being there, the reuptake inhibitor really doesn't increase those levels. I think the story overall is a pretty strong story because we've measured norepinephrine levels. We get clinically significant increases in norepinephrine levels. Those increase, in fact, go to an improvement in blood pressure, three-minute standing blood pressure. It shows an improvement in the composite index, and we don't see an increase in supine hypertension, all consistent with the biology. Now we just have to show it in the phase III program.
Sure. Assuming positive data and that you get priority review and the drug is out there in the market, help us understand your commercial strategy a little bit better. I was also curious, is there any way you could kind of get these patients that are being misdiagnosed at the moment somehow to raise awareness there to get these people on ampreloxetine as well?
Yeah, I think there's a dramatic change in MSA patients and caregivers in their overall level of education over the past three to five years about the disease, about clinical trials, about treatment, et cetera. That is happening because for the first time, there are clinical trials like ampreloxetine to treat the primary negative symptom of MSA. There are disease-modifying trials underway. Patients are becoming more educated. That more educated patient population for us is going to be a huge benefit because we're going to be able to communicate with advocacy organizations about the benefits and risks of ampreloxetine and help them inform the patient community.
That should overall not only help inform those patients that have the disease and have been diagnosed, but those patients that are on the periphery that in fact have a problem, they do not think it is Parkinson's disease, and they can go into more advanced settings to be diagnosed. I think that it is very exciting because for the first time, this set of patients with multiple system atrophy has a degree of hope for better therapy.
Fingers looking forward to the data. Let's move on to your commercial asset, YUPELRI and Trelegy. YUPELRI, you co-promote with Viatris. It has been on the market for about five years and is still growing. What's driving this growth and how do you see the trajectory evolving in the next couple of years?
Aziz, would you like to go ahead?
Yeah, sure. As you mentioned, Trelegy, excuse me, YUPELRI generated a little under $240 million of net sales last year, $239 million. That represented just under 10% growth. The brand continues to grow. Last quarter was $67 million. We do see sometimes a little bit of a dip in Q1 due to seasonality and kind of inventory dynamics. We expect that to happen again. We do continue to see growth into 2025 and well and beyond. We do not provide financial guidance given we have kind of restrictions on what we can say due to the relationship with Viatris. We do expect to see continued growth for YUPELRI. One thing that is specific to potentially 2025 and beyond is that we do have a $25 million milestone if we achieve greater than $250 million of net sales in any given year.
That would only mean 4% growth versus 2024. That's definitely kind of in the viewpoint above and beyond the Trelegy milestones, which I'll speak to in a little bit. From a profitability perspective, as Rick had mentioned earlier, we generated around $40 million of cash profit last year. That is essentially funding the ampreloxetine CYPRESS study that Rick had mentioned earlier and the G&A costs. At a bottom line, at the corporate perspective, we're burning minimal cash. It's a really beautiful product from a sales perspective, but from a bottom line perspective, even more so. That's the big picture. Anything else on the kind of drivers?
Yeah, the market.
I will talk about Trelegy.
Yeah, I'll bring it back on Trelegy, because Trelegy and YUPELRI really represent two distinct segments of the asthma and COPD market. One of them is the handheld segment. Trelegy is the premier product in that handheld segment. There is the 10% of the COPD market where patients use nebulizers. This has not changed in three decades because there is a set of COPD patients, because of age, motor dexterity, cognition, that simply do not operate a handheld device. Even as simple as the Trelegy Ellipta is, they cannot operate it consistently well. Those patients are candidates for nebulization. Even though we are 5+ years in the market, we are still just scratching the surface of getting these patients on nebulization for maintenance therapy. Our responsibility is the hospital. We grew the hospital nearly 50% in the fourth quarter last year, unit volume.
We are doing that because patients, physicians, respiratory therapists can count on the efficacy of YUPELRI in the institution. When a patient has a good experience with YUPELRI in the institution, they leave with a prescription, and many of those prescriptions are filled. Now Trelegy.
Yeah, Trelegy, a bit more detail on the milestones and royalties. As I mentioned earlier, we have $150 million more milestones for achieving certain sales targets in 2025 and 2026. We hit the milestone of $50 million last year. We got that in February. As I mentioned earlier, the product generated about $3.5 billion of net sales last year. We only need to hit $3.4 billion this year to hit the first $50 million of the $150 million. This brand already grew 28% last year. We think that's highly probable we achieve that one. The year after, in 2026, we get a $100 million milestone if we hit another $3.5 billion of net sales, which we kind of just hit last year. Basically, if the product continues at its current rate, we're going to hit both of those.
We think those are highly probable. The royalties, as I mentioned before, 5.5%-8.5% tiered royalties come back to us ex-U.S. on Trelegy starting in mid-2029 and in the U.S. starting in 2031. We think the duration of those royalties will last well into the 2030s. If you just look at consensus, it is still talking about a multi-billion dollar product. 5.5%-8.5% royalties is a massive amount of incremental income. When you think about the portfolio of the company, you have two kind of cash-flowing assets, YUPELRI and Trelegy with long duration. You have a big bet on ampreloxetine plus our financial profile. It is a unique portfolio, especially in this time in the market.
Sure. You mentioned the hospital segment of the business. I would say that's probably a stickier business segment for you. Maybe you could elaborate a little bit more on that. Also, how do you actually plan to follow these patients once they leave the hospital?
Yeah, it's a great question. Particularly as patients leave the hospital, this is where the partnership with Viatris really comes into focus because over time, we're improving sort of, it's probably wrong to call it a handoff, but really the continuity of care from the hospital to the community. Our hospital, we have a relatively small sales force, about 14 account managers, a few national account directors, an outstanding medical group that focuses messaging on the hospital that we can save the hospital money, save their respiratory therapy time by implementing YUPELRI as their preferred LAMA, long-acting muscarinic antagonist. We've been successful in not only getting them formulary, but also achieving therapeutic substitution so that when a LAMA is written, any drug of this class is written in the hospital, YUPELRI is substituted. It's a very easily five to eight-minute nebulization for the patient.
You can be confident that the patient is getting the medicine, which is why respiratory therapists and pulmonologists like it. It has been a very effective strategy in the hospital. We are using that hospital growth to really drive the community use of YUPELRI.
Do you see any threat to YUPELRI's market presence from any other COPD therapies that have been approved or anything else that's in development?
The previous presenter talked about Ohtuvayre. Obviously, Verona has done an outstanding job with that. We are glad to see them in the market because it increases the noise level about nebulization. Ohtuvayre is added on to therapy, so it is not really competing with YUPELRI. It is being added to YUPELRI in some instances and being added to Trelegy in other instances. That additional noise about nebulization is very helpful for YUPELRI. YUPELRI, the chemical revefenacin, is a unique LAMA in that we could have developed it as an MDI or a DPI or a nebulizer. We developed it as a nebulizer because that was the one space in the market with the greatest need. There was not going to be another LAMA, long-acting muscarinic antagonist, developed in a nebulizer for the market because of the physical chemistry constraints that are present in these structures.
I don't think there's going to be a competitor in the near term for YUPELRI. I just hope the continued noise level of nebulization gets louder and louder because it helps us out.
Sure. We have about a minute left in our session. Is there anything else you would like to highlight to investors that we haven't discussed today?
Aziz, anything?
No, I think that just to cover the financials, we ended last year with $88 million of cash. We got the milestone of $50 million earlier. Pro forma, $138 million. We've guided to minimal cash burn this year, similar to last year where we burned $14 million for the year. Most of that will be kind of front-loaded in the first half. We have no debt. Kind of supporting my earlier statements around no need to raise capital. I think we have a nice portfolio of kind of cash-generating assets and a huge big bet on a rare neurology disease, which could really transform the company. We're immensely excited about the next 12 months.
Yeah, I don't think we could be more excited. I mean, the ability to make a difference to these patients and their caregivers in MSA is just a great opportunity.
Thank you so much for that. Thank you all for being here. We are concluding the morning session for the healthcare track, but do not forget to join us for the next exciting lineup of chats and panels that we have for the afternoon session. Enjoy your lunch.