Okay, let's get started. Good morning, everybody. For those of you who don't know me, I'm Mike DiFiore. I'm one of the Senior Biotech Analyst at Evercore. Welcome to the third day of our conference. With us today is Theravance Biopharma. We have Rick Winningham, CEO of Theravance. Rick, welcome. Thank you so much for taking time to be at our conference this morning.
Thank you, Mike.
Before we get into the nitty-gritty Q&A, I would love to kind of get your overview of the business. Theravance is a very different company than it was a couple of years ago. Maybe talk about that evolution and what the key priorities are now and what to look forward to maybe in the next 12 months.
Sure. And I'd like to thank Evercore for inviting us here today to present. Yes, we've evolved as a company over the past five years. We've narrowed the focus of the company. Obviously, today, Theravance's significant cash balance, a product, Yupelri, that brings in about $50 million a year of operating cash to us. And then, obviously, a Phase 3 neuro product that we'll talk about today that will read out in the first quarter of next year. But all along the way, what we've done is, obviously, the company has no debt today. We've cleaned up the balance sheet, reduced the overall burn rate, again, focused the company, putting us in a terrific position, I think, for the readout that's coming early next year.
Excellent. So obviously, the focus right now is the Phase 3 Cypress study that's going to read out, as you said, in Q1. But in earlier programs, I think that the Redwood trial, the MSA subgroup clearly drove the signal for ampreloxetine. So maybe could you talk about what you think is distinct about MSA in the setting and how that experience led you to design Cypress as an MSA-only study? Yeah.
Yeah, so yeah, a bit of history. We, several years ago, embarked on a phase 3 study in neurogenic orthostatic hypotension across three different patient populations, one of those being Parkinson's disease, one being MSA, and the other being primary autonomic failure. We believed going into that study that MSA patients would show the most significant signal in nOH because MSA patients have intact peripheral nerves, and those intact peripheral nerves are what effectively we leverage with the additional norepinephrine in order to create an increase in blood pressure to perfuse the tissues in the body with blood for these patients, and what we saw in that study was we over-enrolled MSA patients relative to Parkinson's patients and what you'd find just naturally, and we did that because we believed that MSA would show the greatest signal.
When we got the data, Parkinson's patients really were equivocal, but there was a strong, strong signal in MSA. We took that to the FDA. FDA looked at the 170 or the Redwood study and said, well, we'll consider this as a supportive study. If you do one more small study, we'll give you a full approval for neurogenic orthostatic hypotension in MSA patients. And that's where we find ourselves today. So the signal that we saw in MSA patients in the early study was extremely strong. And the biology supports why it would be preferentially more valuable to MSA patients than most Parkinson's patients.
I see. Makes sense. So you've also published kind of an integrated analysis showing that about a one-point change on the OHSA composite is clinically meaningful and how Cypress is FDA aligned on that endpoint. But in the prior Phase 3 Redwood study, the MSA subgroup showed a larger effect on the same scale. So kind of how should we think about the level of effect Cypress is powered to detect and kind of your confidence going into the readout?
Sure. Well, just as a bit of background, Mike, picking up on your comment, yeah, the earlier Redwood study showed a 1.6 change in the composite score, which is a series of different symptoms that the patients experience because of neurogenic orthostatic hypotension, blurred vision, weakness, fatigue, etc . This 1.6 change, again, was quite meaningful, and we did the analysis working at FDA's direction on, well, what is a meaningful change in the composite score? We found that it was a one-point change in a composite score, so obviously, 1.6 for Redwood was more than meaningful, and we've published that data, presented it at conferences, and so we're shooting for a one-point or greater change in the Cypress study. Therefore, we think we've got a very good chance of not only being statistically significant, but delivering a clinically meaningful result as defined by earlier work in the field.
Got it. Got it. In terms of the other endpoints in Redwood, the MSA subgroup saw improvement across several of them, not just OHSA, but OHDAS, OHQ. Were those effects generally consistent in direction and magnitude across symptoms and daily activity measures? Or were there meaningful nuances in that pattern?
Yeah. Well, I think that's a terrific observation. And what was quite powerful about the Redwood study is that if you look at the components of the composite score, each of the components of the composite score favored ampreloxetine. The dizziness, weakness, blurred vision, et cetera, all favored treatment with ampreloxetine. The additional measures, as you mentioned in the OHDAS score, daily activity score, are walking a short time, standing a short time, walking a long period of time, and walking. And so what we found was that, in fact, standing a short period of time and walking for a short period of time both favored ampreloxetine. That's what we would expect to see in the study because of this increased perfusion.
In Cypress, you're saying?
In Cypress. That's right. So we saw this in Redwood. We would expect to see that in Cypress, and this is very meaningful because walking a short period of time for patients means the difference between being able to get up and cook, to shave, to walk to the garden, et cetera, so the clinical meaningfulness of achieving a one-point change in the composite should feed into, in fact, the patients being able to walk for a short period of time and stand for a short period of time, getting more out of their life. I mean, the problem with NOH and these patients is it really robs them of what I'd call functional survival is that severe NOH and MSA patients it restricts them to a La-Z-Boy or a couch, and they really have to disengage with life. What we're trying to do is give them the tool, an ampreloxetine, to meaningfully engage in life and enjoy the period of time that they have.
Got it. Got it. Obviously, Cypress is designed as a pivotal study, and much of that NDA work is already complete. What aspects of, I guess, the cumulative safety exposure and prior efficacy data kind of give you confidence that a positive Cypress readout would be sufficient for an NDA in this rare population?
A great question. We've had ampreloxetine over time in more than 800 patients through Phase 1, Phase 2, and the earlier Phase 3 program that focused on both Parkinson's disease and MSA. We've got a large number of exposures in human beings. The clinical preclinical program is already complete. And in fact, most of the NDA that we have today is already complete. We've been working on it through the course of this year, putting ourselves in a position that with positive Cypress data, what we need to do is update, obviously, the clinical study reports, the summary of efficacy and safety for the Cypress data, but be able to move to a filing relatively quickly after we have knock on wood the positive Cypress results. But all the CMC work, the preclinical safety, all that's completed, and all that has been already put into an NDA that is awaiting Cypress data.
Got it. Got it. When we think about, I guess, the clinically meaningful thresholds for OHQ and OHSA, I think you published these thresholds that kind of make the benefit clearer to interpret. Just a bit more broadly, how deliberately was the overall Cypress design from the choice of endpoints to the 20-week randomized withdrawal structure? How important were these in shaping around what his physicians and payers will even need to see?
Sure. Well, it's a great question. And what we've tried to do with Cypress is to replicate, to really mimic the Redwood study in MSA patients. And a core piece of what is missing is the ability to deliver chronic therapy to these patients that sees their symptoms improve over a period of time. So as you mentioned, we've got effectively a 12-week open label period in Cypress where everyone gets ampreloxetine. During that open label period, we go to an enrichment phase where patients have to improve by two points, at least two points on one of the OHSA symptoms, which is dizziness. If they improve by two points, they continue on to a randomized withdrawal where half the patients are withdrawn from ampreloxetine and the other patients continue on ampreloxetine. And what we're looking to see is worsening, a worsening of those patients that are moved to placebo.
That's what we saw in the earlier study with Redwood. This really, the delivery of data out of Cypress will give something to the treatment community, to the market that's never been seen before, which is actually a chronic therapy, therapy over 20 weeks, as you point out, where we have been able to change the symptoms of NOH and enrich the, again, what I'd call functional survival of patients with NOH and MSA.
Got it. And just given the paucity of available treatments and incumbent treatments, you're kind of establishing a bar with Cypress.
Yes, that's right. It will establish a new bar, not only in the data, but this study has been a very difficult study to do, to execute, because you have MSA patients. MSA patients are not well. It takes very sophisticated investigators that we've worked with all over the world in order to execute this study. I myself have spent a lot of time with individual investigators at their clinical sites just reinforcing how important the execution of this study is to the overall results, and I'm very pleased with where we are today going into the readout in the first quarter, and as you point out, the ability to deliver a medicine to treat this disease in a chronic fashion will be something that does not exist today.
Got it. Got it. More of a commercial question. Have you already started payer discussions around this? I know just from speaking to you in the past, Rick, I know you kind of already have, you're not using a CRO, right?
That's right.
You already have relationships at these sites. I guess that's part of your pre-commercial plan in a sense, right?
We wanted to develop good relationships with the individual investigators, both in the U.S. and Europe and then select centers in Asia, because these were largely going to be eventually the prescribers of the medicine, and we wanted them to know Theravance Biopharma to understand what we stood for and the importance of this study. I think relative to payers, again, we really go back to there's nothing that treats these patients today on a chronic basis. Our initial discussions with payers that have been effectively driven by Redwood, the Redwood study, have been very good with regard to, this is a rare neurological condition. It affects 40,000 patients in the United States and generally in line with rare neurological pricing of medicines, and we've got a KOL event coming up in December, December the 8th. We'll not only feature a key opinion leader in Horacio Kaufmann at that event, but also Rhonda Farnum, our Head of Commercial and Chief Business Officer, will talk more about the commercial strategies for ampreloxetine.
Excellent. Excellent. Looking forward to that. Last question on ampreloxetine for folks less familiar with the story. How does it differ from the incumbents? I know the incumbent products have a black box warning that they have an increased risk of boosting supine hypertension. Is that a risk with ampreloxetine?
To date, we have not seen a shift in supine hypertension in patients on ampreloxetine. If you look at the patients that come into the study, all the patients have a degree of supine hypertension because they have dysautonomia, their autonomic nervous system because the disease is failing. So what we look at is this is the baseline condition of the patient. This is baseline supine hypertension. Do we make the baseline supine hypertension worse? And we evaluate that by looking at shift tables. And as we've presented at both the American Academy of Neurology as well as the American Autonomic Society, we don't. We don't. And there's a biological reason for not making supine hypertension worse with ampreloxetine in that when the patient is lying down, they lack the noradrenergic drive that in fact is adding norepinephrine into that synapse.
So that only happens when they begin to go from a lying down to a sitting position and then sitting to standing. And then that's where ampreloxetine blocks the reuptake of norepinephrine, adding to vasoconstriction and driving the blood into the muscles. But when patients are lying down, we have not seen an increase in supine hypertension, which, as you point out, is a very big deal.
Sure. Sure. Maybe in the last couple of minutes we have left, I want to transition to Yupelri. It's obviously providing good cash flow currently. You said that more than 80% of hospital-initiated Yupelri patients walk out with a prescription, but that there's still work to do to ensure first fill and kind of a five to seven-month persistence. So maybe talk about that for a little bit.
Yeah. A great question. So we co-promote in the United States Yupelri with Viatris. Viatris covers the community physicians, and we cover our job as the hospital. And to be successful in the hospital, we have to get the medicine on formulary. And more and more, we get therapeutic interchange in those formularies, which is a patient comes in, they might be on another drug of the same class, that patient is shifted to Yupelri because of the clinical data. And then they take Yupelri when they're in a compromised health position in the hospital, and then that prescription follows them to the outpatient setting where we work with Viatris to make sure that, in fact, those patients stay on therapy. I think this is. We've continued to add more and more and more patients being treated in the hospital.
And as we've added more of those patients, obviously, the points you made is that more of those patients are being discharged with a prescription for ampreloxetine. And we're becoming more and more effective in working with Viatris to get those first fills coming out of the hospital, really leveraging historically durable medical equipment suppliers, but more and more specialty pharmacy in order to ensure that the patient gets a first-time fill and to provide services that can keep that patient on medicine and breathing better for a longer period of time.
Interesting. So maybe in terms of thinking about kind of just maximizing or minimizing hospital-to-home friction, I mean, would you say it's fair to say that you're kind of in the early innings of that and there's a lot more work to do?
Yes. Yes. I think we've made a lot of progress. Obviously, in the middle of we had COVID to deal with shortly after the launch, but we've continued to progress, getting more and more and more hospitals to move to this therapeutic interchange and to get the prescription of Yupelri given to the patient as they're discharged. And then the integration with Viatris in the community has just continued to improve. And you see that in our growth rates, both in terms of being able to get a little bit improvement in price and then volume growth.
I see. You've also called out channel mix improvements and fulfillment optimization as key drivers of Yupelri's margin expansion. Where do you think you are on that curve today? I mean, is it early days or closer to kind of steady state? And how should we think about the sustainability of those benefits over the next few years?
So I think we're sort of in the middle innings of this. I think that we've made progress here, but we have a lot more progress that we can make. And I think that's going to benefit, obviously benefit the brand, but also benefit patients in terms of continuity of care and staying on Yupelri longer. If you look at the overall information, clinical information package for Yupelri, obviously provide great benefit to FEV1 and helping the patients breathe every day. But also as a part of our safety study in the registration, we looked at Yupelri versus tiotropium, which is Spiriva, which is the largest single muscarinic antagonist in the market. And what we saw that Yupelri provides at least as good, if not better benefit in terms of reducing sudden worsening of COPD or exacerbation.
We've really got a very, very compelling medical package for Yupelri, and that really facilitates its use in the hospital. It's the reason we get on formulary in the hospital is that medical, the medical data, and then facilitates obviously its use in the community because physicians and patients can count on the benefit from Yupelri.
Got it. Last 30 seconds, kind of my capstone question. I ask a lot of companies if there's any nuance or maybe underappreciated aspect of the business from the street perspective, where would you want the street to kind of better focus on?
I think Theravance is a company with an extraordinarily strong financial foundation, $330 million in cash plus $175 million in near-term, near certain milestones that's going to come over the next 15 months. And you build on that, the cash flow of Yupelri, and then the terrific value that is capable with positive Cypress data. We're just set up in a very unique situation with financial strength, a core experience and success in commercializing a product, and then the advent, hopefully, of a rare neurological drug that can really provide a small number of patients significant benefit in an orphan disease.
Excellent. Well, unfortunately, we're at time, Rick, but this has been immensely helpful. Thank you.