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What changed in Theravance Biopharma, Inc.'s 10-K — 2023 vs 2024

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Paragraph-level year-over-year comparison of Theravance Biopharma, Inc.'s 2023 and 2024 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2024 report.

+346 added−329 removedSource: 10-K (2025-03-07) vs 10-K (2024-03-01)

Top changes in Theravance Biopharma, Inc.'s 2024 10-K

346 paragraphs added · 329 removed · 257 edited across 7 sections

Item 1. Business

Business — how the company describes what it does

75 edited+23 added−16 removed94 unchanged
Biggest changeOutside the US, the ability to market a product depends upon receiving a marketing authorization from the appropriate regulatory authorities which are subject to equally rigorous regulatory obligations. The requirements governing the conduct of clinical studies, marketing authorization, pricing and reimbursement vary widely from country to country.
Biggest changeThe requirements governing the conduct of clinical studies, marketing authorization, pricing and reimbursement also vary widely from country to country. In any country, however, the commercialization of pharmaceutical products is permitted only if the appropriate regulatory authority is satisfied that we have presented adequate evidence of the safety, quality and efficacy of the product.
Ampreloxetine is wholly owned by Theravance Biopharma. ​ Based on positive results from a small exploratory Phase 2 study in nOH and discussions with the FDA, we advanced ampreloxetine into a Phase 3 program. We announced the initiation of patient dosing in study in early 2019. The Phase 3 program consisted of two pivotal studies and one non-pivotal study.
Ampreloxetine is wholly owned by Theravance Biopharma. ​ Based on positive results from a small exploratory Phase 2 study in nOH and discussions with the FDA, we advanced ampreloxetine into a Phase 3 program. We announced the initiation of patient dosing in the study in early 2019. The Phase 3 program consisted of two pivotal studies and one non-pivotal study.
The third, non-pivotal study (OAK), was a three and half year long-term extension study. ​ In September 2021, we reported that the SEQUOIA Phase 3 clinical study did not meet its primary endpoint. Most treatment-related adverse events were mild or moderate in severity.
The third, non-pivotal study (OAK), was a three-and-a-half-year long-term extension study. ​ In September 2021, we reported that the SEQUOIA Phase 3 clinical study did not meet its primary endpoint. Most treatment-related adverse events were mild or moderate in severity.
However, if we are unable to obtain contract manufacturing or obtain such manufacturing on commercially reasonable terms, or if manufacturing is interrupted at one of our suppliers, whether due to regulatory or other reasons, we may not be able to develop or commercialize our products as planned. ​ Any inability to acquire sufficient quantities of API or drug product in a timely manner from current or future sources could disrupt our development programs, the conduct of future clinical trials or our commercialization efforts.
However, if we are unable to obtain contract manufacturing or obtain such manufacturing on commercially reasonable terms, or if manufacturing is interrupted at one of our suppliers, whether due to regulatory or other reasons, we may not be able to develop or commercialize our products as planned. ​ Any inability to acquire sufficient quantities of API or drug product in a timely manner from current or future sources could disrupt our development programs, the conduct of clinical trials or our commercialization efforts.
If the RLD has NCE exclusivity and the notice is given and suit filed during the fifth year of exclusivity, the regulatory stay extends until 7.5 years after the RLD approval.
If the RLD has NCE exclusivity and the notice is given and suit filed during the fifth year of exclusivity, the regulatory stay extends until 7.5 years after RLD approval.
For more information, see the risk factor under the heading “Changes in healthcare law and implementing regulations, including government restrictions on pricing and reimbursement, as well as healthcare policy and other healthcare payor cost-containment initiatives, may negatively impact us, our collaboration partners, or those commercializing products with respect to which we have an economic interest or right to receive royalties” of this Annual Report on Form 10-K. ​ Pharmaceutical Pricing We participated in and had certain price reporting obligations under the Medicaid Drug Rebate and other programs and we remain responsible for data reported under those programs in past quarters, as described in greater detail under the risk factor “ If we failed to comply with our reporting and payment obligations under the Medicaid Drug Rebate program or other governmental pricing programs, we could be subject to additional reimbursement requirements, penalties, sanctions and fines, which could have a material adverse effect on our business, financial condition, results of operations and growth prospects” of this Annual Report on Form 10-K. ​ Our ability, and the ability of our collaboration partners, licensees, or those commercializing products with respect to which we have an economic interest or right to receive royalties to commercialize our products successfully, and our ability to attract commercialization partners for our products, depends in significant part on the availability of adequate financial coverage and reimbursement from third-party payors, including, in the US, governmental payors such as the Medicare and Medicaid programs, managed care organizations, and private health insurers.
For more information, see the risk factor under the heading “Changes in healthcare law and implementing regulations, including government restrictions on pricing and reimbursement, as well as healthcare policy and other healthcare payor and distributor cost containment initiatives, may negatively impact us, our collaboration partners, or those commercializing products with respect to which we have an economic interest or right to receive royalties” of this Annual Report on Form 10-K. ​ Pharmaceutical Pricing We participated in and had certain price reporting obligations under the Medicaid Drug Rebate and other programs and we remain responsible for data reported under those programs in past quarters, as described in greater detail under the risk factor “ If we failed to comply with our reporting and payment obligations under the Medicaid Drug Rebate program or other governmental pricing programs, we could be subject to additional reimbursement requirements, penalties, sanctions and fines, which could have a material adverse effect on our business, financial condition, results of operations and growth prospects” of this Annual Report on Form 10-K. ​ Our ability, and the ability of our collaboration partners, licensees, or those commercializing products with respect to which we have an economic interest or right to receive royalties to commercialize our products successfully, and our ability to attract commercialization partners for our products, depends in significant part on the availability of adequate financial coverage and reimbursement from third-party payors, including, in the US, governmental payors such as the Medicare and Medicaid programs, managed care organizations, and private health insurers.
The reimbursement environment is described in greater detail under the risk factor “Changes in healthcare law and implementing regulations, including government restrictions on pricing and reimbursement, as well as healthcare policy and other healthcare payor cost-containment initiatives, may negatively impact us, our collaboration partners, or those commercializing products with respect to which we have an economic interest or right to receive royalties” of this Annual Report on Form 10-K. ​ Coverage and Reimbursement Market acceptance and sales of any one or more of our product candidates will depend on reimbursement policies and may be affected by future healthcare reform measures in the US.
The reimbursement environment is described in greater detail under the risk factor “Changes in healthcare law and implementing regulations, including government restrictions on pricing and reimbursement, as well as healthcare policy and other healthcare payor and distributor cost containment initiatives, may negatively impact us, our collaboration partners, or those commercializing products with respect to which we have an economic interest or right to receive royalties” of this Annual Report on Form 10-K. ​ Coverage and Reimbursement Market acceptance and sales of any one or more of our product candidates will depend on reimbursement policies and may be affected by future healthcare reform measures in the US.
We may need to conduct expensive pharmacoeconomic studies in order to demonstrate the medical necessity and cost-effectiveness of our products, in addition to the costs required to obtain FDA approvals. Any approved products we commercialize may not be considered by payers to be medically necessary or cost-effective for particular diseases or conditions.
We may need to conduct expensive pharmacoeconomic studies in order to demonstrate the medical necessity and cost-effectiveness of our products, in addition to the costs required to obtain FDA approvals. Any products we commercialize may not be considered by payers to be medically necessary or cost-effective for particular diseases or conditions.
For more information, see the risk factor under the heading “ There is a single source of supply for a number of our product candidates and for YUPELRI, and our business will be harmed if any of these single-source manufacturers are not able to satisfy demand and alternative sources are not available ” of this Annual Report on Form 10-K. ​ Government Regulation The development and commercialization of pharmaceutical products and our product candidates by us, our collaboration partners and licensees, and those commercializing products in which we have an economic interest, such as GSK, are subject to extensive regulation by governmental authorities in the US and other countries.
For more information, see the risk factor under the heading “ There is a single source of supply for our product candidate and for YUPELRI, and our business will be harmed if any of these single-source manufacturers are not able to satisfy demand and alternative sources are not available ” of this Annual Report on Form 10-K. ​ Government Regulation The development and commercialization of pharmaceutical products and our product candidates by us, our collaboration partners and licensees, and those commercializing products in which we have an economic interest, such as GSK, are subject to extensive regulation by governmental authorities in the US and other countries.
Significant uncertainty exists as to the coverage and reimbursement status of any drug products for which we obtain regulatory approval. In the US and markets in other countries, sales of any products for which we receive regulatory approval for commercial sale will depend in part on the availability of reimbursement from third-party payers.
Significant uncertainty exists as to the coverage and reimbursement status of any drug products. In the US and markets in other countries, sales of any products for which we receive regulatory approval for commercial sale will depend in part on the availability of reimbursement from third-party payers.
In the US, numerous federal and state laws and regulations, including state data breach notification laws, state health information and/or genetic privacy laws, and federal and state consumer protection laws (e.g., Section 5 of the Federal Trade Commission Act (“FTC Act”)), govern the collection, use, disclosure, and protection of health-related and other personal information.
In the US, numerous federal and state laws and regulations, including state data breach notification laws, state health information and/or genetic privacy laws, and federal and state consumer protection laws (e.g., Section 5 of the Federal Trade Commission Act (“FTC Act”) and the Health Breach Notification Rule), govern the collection, use, disclosure, and protection of health-related and other personal information.
As noted above, Viatris is responsible for all aspects of development and commercialization of nebulized revefenacin in the China Region, including pre- and post-launch activities and product registration and all associated costs. ​ Under the terms of the Viatris Agreement, as amended, as of December 31, 2023, we were eligible to receive from Viatris potential global development, regulatory and sales milestone payments (excluding the China Region) of up to $205.0 million in the aggregate with $160.0 million associated with YUPELRI monotherapy and $45.0 million associated with future potential combination products.
As noted above, Viatris is responsible for all aspects of development and commercialization of nebulized revefenacin in the China Region, including pre- and post-launch activities and product registration and all associated costs. ​ Under the terms of the Viatris Agreement, as amended, as of December 31, 2024, we were eligible to receive from Viatris potential global development, regulatory and sales milestone payments (excluding the China Region) of up to $205.0 million in the aggregate with $160.0 million associated with YUPELRI monotherapy and $45.0 million associated with future potential combination products.
These laws and related risks are described in greater detail under the risk factor “If we fail to comply with data protection laws and regulations, we could be subject to government enforcement actions (which could include civil or criminal penalties), private litigation and/or adverse publicity, which could negatively affect our operating results and busines s” of this Annual Report on Form 10-K. ​ Patents and Proprietary Rights We will be able to protect our technology from unauthorized use by third parties only to the extent that our technology is covered by valid and enforceable patents or is effectively maintained as trade secrets.
These laws and related risks are described in greater detail under the risk factor “If we fail to comply with data protection laws and regulations, we could be subject to government enforcement actions (which could include civil or 13 Table of Contents criminal penalties), private litigation and/or adverse publicity, which could negatively affect our operating results and busines s” of this Annual Report on Form 10-K. ​ Patents and Proprietary Rights We will be able to protect our technology from unauthorized use by third parties only to the extent that our technology is covered by valid and enforceable patents or is effectively maintained as trade secrets.
Segment Information,” to our consolidated financial statements in this Annual Report on Form 10-K. ​ Corporation Information Theravance Biopharma was incorporated in the Cayman Islands in July 2013 under the name Theravance Biopharma, Inc. Theravance Biopharma began operating as an independent, publicly-traded company on June 2, 2014 following a spin-off from Innoviva, Inc.
Note 3. Segment Information,” to our consolidated financial statements in this Annual Report on Form 10-K. ​ Corporation Information Theravance Biopharma was incorporated in the Cayman Islands in July 2013 under the name Theravance Biopharma, Inc. Theravance Biopharma began operating as an independent, publicly-traded company on June 2, 2014 following a spin-off from Innoviva, Inc.
Of the $160.0 million associated with monotherapy, $10.0 million relates to regulatory actions in the EU and $150.0 million relates to sales milestones based on achieving certain levels of annual US net sales as follows: ​ ​ ​ YUPELRI US Net Sales Sales Milestones (In a Calendar Year) Due from Viatris $250.0 million $25.0 million $500.0 million $50.0 million $750.0 million $75.0 million ​ As of December 31, 2023, w e were also eligible to receive additional potential development and sales milestones of up to $52.5 million related to Viatris’ development and commercialization of nebulized revefenacin in the China Region with $45.0 million associated with YUPELRI monotherapy and $7.5 million associated with future potential combination products.
Of the $160.0 million associated with monotherapy, $10.0 million relates to regulatory actions in the EU and $150.0 million relates to sales milestones based on achieving certain levels of annual aggregate US net sales as follows: ​ ​ ​ YUPELRI US Net Sales Sales Milestones (In a Calendar Year) Due from Viatris $250.0 million $25.0 million $500.0 million $50.0 million $750.0 million $75.0 million ​ As of December 31, 2024, w e were also eligible to receive additional potential development and sales milestones of up to $52.5 million related to Viatris’ development and commercialization of nebulized revefenacin in the China Region with $45.0 million associated with YUPELRI monotherapy and $7.5 million associated with future potential combination products.
We continue to focus on employee wellness and safety, policy updates based on Centers for Disease Control and Prevention (“CDC”), county, federal, and state guidelines, and ongoing employee communication. ​ Financial Information About Geographic Areas Information on our total revenues attributed to geographic areas and customers who represented at least 10% of our total revenues is included in “Item 8, Note 3.
We continue to focus on employee wellness and safety, policy updates based on Centers for Disease Control and Prevention (“CDC”), county, federal, and state guidelines, and ongoing employee communication. ​ Financial Information About Geographic Areas Information on our total revenues attributed to geographic areas and customers who represented at least 10% of our total revenues is included in “Item 8.
In May 2023, we announced that the FDA granted Orphan Drug Designation status to ampreloxetine for the treatment of symptomatic nOH in patients with MSA. ​ In July 2022, Royalty Pharma Investments 2019 ICAV (“Royalty Pharma”) agreed to invest up to $40.0 million to advance the development of ampreloxetine in MSA in exchange for unsecured low single-digit royalties.
In May 2023, we announced that the FDA granted Orphan Drug Designation status to ampreloxetine for the treatment of symptomatic nOH in patients with MSA. In July 2022, Royalty Pharma Investments (“Royalty Pharma”) agreed to invest up to $40.0 million to advance the development of ampreloxetine in MSA in exchange for unsecured low single-digit royalties.
We strive to build and foster a culture where all employees feel empowered to be their authentic selves. Our Diversity, Equity & Inclusion Council and Women’s Leadership Network are Company-sponsored, employee-led groups that aim to improve attraction, retention, development, inclusion, and engagement of a diverse and global workforce.
We strive to build and foster a culture where all employees feel empowered to be their authentic selves. ​ Our Diversity, Equity, Inclusion & Belonging Council and Women’s Leadership Network are Company-sponsored, employee-led groups open to all that aim to improve attraction, retention, development, inclusion, and engagement of a diverse and global workforce.
Of the $45.0 million associated with monotherapy, $7.5 million relates to regulatory approval in the China Region and $37.5 million relates to sales milestones based on achieving certain levels of cumulative net sales in the China Region as follows: ​ ​ ​ YUPELRI China Region Net Sales Sales Milestones (Cumulative) Due from Viatris $100.0 million $2.5 million $200.0 million $5.0 million $400.0 million $10.0 million $800.0 million $20.0 million ​ With respect to the China Region royalties, we are eligible to receive low double-digit tiered royalties on net sales of nebulized revefenacin as follows: ​ ​ ​ YUPELRI China Region Net Sales Thresholds Royalty Rate (Annual) Due from Viatris ≤ $75.0 million 14% > $75.0 million to ≤ $150.0 million 17% > $150 million 20% ​ 6 Table of Contents In November 2023, we learned that Viatris’ Phase 3 study of YUPELRI in China was positive, and the data were consistent with previous findings of YUPELRI’s strong efficacy.
Of the $45.0 million associated with monotherapy, $7.5 million relates to regulatory approval in the China Region and $37.5 million relates to sales milestones based on achieving certain levels of cumulative net sales in the China Region as follows: ​ ​ ​ YUPELRI China Region Net Sales Sales Milestones (Cumulative) Due from Viatris $100.0 million $2.5 million $200.0 million $5.0 million $400.0 million $10.0 million $800.0 million $20.0 million ​ With respect to the China Region royalties, we are also eligible to receive tiered royalties on net sales of nebulized revefenacin as follows: ​ ​ ​ YUPELRI China Region Net Sales Thresholds Royalty Rate (Annual) Due from Viatris ≤ $75.0 million 14% > $75.0 million to ≤ $150.0 million 17% > $150 million 20% ​ 6 Table of Contents In November 2023, we learned that Viatris’ Phase 3 study of YUPELRI in China was positive, and the data were consistent with previous findings of YUPELRI’s strong efficacy.
Also, we do not know whether any of our patent applications will result in any issued patents or, if issued, whether the scope of the issued claims will be sufficient to protect our proprietary position. ​ Patent Term Restoration, Regulatory Exclusivities, and Hatch-Waxman Litigation Depending upon the timing, duration, and specifics of FDA approval of our product candidates, some of our US patents may be eligible for limited patent term extension under the Drug Price Competition and Patent Term Restoration Act of 1984, referred to as the Hatch-Waxman Act.
Also, we do not know whether any of our patent applications will result in any issued patents or, if issued, whether the scope of the issued claims will be sufficient to protect our proprietary position. 14 Table of Contents ​ Patent Term Restoration, Regulatory Exclusivities, and Hatch-Waxman Litigation Depending upon the timing, duration, and specifics of FDA approval of our product candidates, some of our US patents may be eligible for limited patent term extension under the Drug Price Competition and Patent Term Restoration Act of 1984, referred to as the Hatch-Waxman Act.
Our patent rights relating to ampreloxetine include an issued US composition of matter patent that expires in 2030 and an issued US method of treatment patent that expires in 2037 (in each case, not including any patent term extensions that may be available under the Drug Price Competition and Patent Term Restoration Act of 1984).
For example, our patent rights relating to ampreloxetine include an issued US composition of matter patent that expires in 2030 and an issued US method of treatment patent that expires in 2037 (in each case, not including any patent term extensions that may be available under the Drug Price Competition and Patent Term Restoration Act of 1984).
The Inflation Reduction Act of 2022 (the “IRA”) establishes a new manufacturer discount program, Part B and Part D inflation rebates, and a Drug Price Negotiation Program under which the prices for Medicare units of certain high Medicare spend drugs without generic or biosimilar competition will be capped by reference to, among other things, a specified non-federal average manufacturer price, with negotiated prices set to take effect starting in 2026.
The Inflation Reduction Act of 2022 (the “IRA”) establishes a new manufacturer discount program, Part B and Part D inflation rebates, and a Drug Price Negotiation Program under which the prices for Medicare units of certain high Medicare spend drugs without generic or biosimilar competition will be capped by reference to, among other things, a specified non- 12 Table of Contents federal average manufacturer price, with negotiated prices set to take effect starting in 2026.
Alternatively, we may monetize or divest an asset that we designate as outside our core business, where we believe the program is optimized by leveraging partner capabilities and removing or limiting our research and development costs. ​ 9 Table of Contents Manufacturing We rely on a network of third-party contract manufacturing organizations to produce the active pharmaceutical ingredients (“API”) and drug products required for our clinical trials.
Alternatively, we may monetize or divest an asset that we designate as outside our core business, where we believe the program is optimized by leveraging partner capabilities and removing or limiting our research and development costs. ​ Manufacturing We rely on a network of third-party contract manufacturing organizations to produce the active pharmaceutical ingredients (“API”) and drug products required for our clinical trials.
This could subject a company to a range of penalties that could have a significant commercial impact, including civil and criminal fines and agreements that materially restrict the manner in which a company promotes or distributes a drug. 11 Table of Contents ​ We, our collaboration partners and licensees are also subject to various laws and regulations regarding laboratory practices, the experimental use of animals and the use and disposal of hazardous or potentially hazardous substances in connection with our drug development.
This could subject a company to a range of penalties that could have a significant commercial impact, including civil and criminal fines and agreements that materially restrict the manner in which a company promotes or distributes a drug. ​ We, our collaboration partners and licensees are also subject to various laws and regulations regarding laboratory practices, the experimental use of animals and the use and disposal of hazardous or potentially hazardous substances in connection with our drug development.
FDA’s PDUFA performance goal is to review and act on 90 percent of priority new molecular entity (“NME”) NDA submissions within 6 months of the 60-day filing date, and to review and act on 90 percent of standard NME NDA submissions within 10 months of the 60-day filing 10 Table of Contents date.
FDA’s PDUFA performance goal is to review and act on 90 percent of priority new molecular entity (“NME”) NDA submissions within 6 months of the 60-day filing date, and to review and act on 90 percent of standard NME NDA submissions within 10 months of the 60-day filing date.
We believe that we and our partners have in-house expertise to manage this network of third-party manufacturers, and we believe that we will be able to continue to negotiate third-party manufacturing arrangements on commercially reasonable terms and that it will not be necessary for us to rely on internal manufacturing capacity in order to develop or, potentially, commercialize our products.
We believe that we and our partners have in-house expertise to manage this network of third-party manufacturers, and we believe that we will be able to continue to negotiate third-party manufacturing arrangements on commercially reasonable terms and that it will not be necessary for 9 Table of Contents us to rely on internal manufacturing capacity in order to develop or, potentially, commercialize our products.
We are committed to creating/driving shareholder value. ​ We follow these core guiding principles in our mission to drive value creation: ​ ● Focus on insight and innovation; ● Outsource non-core activities; ● Create and foster an integrated environment; and ● Aggressively manage uncertainty. We manage our pipeline with the goal of optimizing program value and allocation of resources.
We are committed to creating/driving shareholder value. ​ We follow these core guiding principles in our mission to drive value creation: ​ ● Focus on insight and innovation; ● Outsource non-core activities; ● Create and foster an integrated environment; and ● Aggressively manage uncertainty. We manage our programs with the goal of optimizing value and allocation of resources.
Droxidopa has never demonstrated 16 Table of Contents a durable effect on nOH symptoms including failure of a confirmatory study known as RESTORE which was required by the FDA as a condition of an accelerated approval. Northera ® , marketed by Lundbeck NA Ltd., is the branded version of droxidopa and became generic in 2021 .
Droxidopa has never demonstrated a durable effect on nOH symptoms including failure of a confirmatory study known as RESTORE which was required by the FDA as a condition of an accelerated approval. Northera ® , marketed by Lundbeck NA Ltd., is the branded version of droxidopa and became generic in 2021 .
Healthcare providers are permitted to prescribe drugs for “off-label” uses - that is, uses not approved by the FDA and not described in the product’s labeling - because the FDA does not regulate the practice of medicine. However, FDA regulations impose restrictions on manufacturers’ communications regarding off-label uses.
Healthcare providers are permitted to prescribe drugs for “off-label” uses - that is, uses not approved by the FDA and not described in the product’s labeling - because the FDA does not 11 Table of Contents regulate the practice of medicine. However, FDA regulations impose restrictions on manufacturers’ communications regarding off-label uses.
However, our understanding of whether and when our products are likely to be subject to selection for negotiation could evolve as the Drug Price Negotiation Program is implemented. We further expect continued scrutiny on pricing from Congress, agencies, and 12 Table of Contents other bodies with respect to drug pricing.
However, our understanding of whether and when our products are likely to be subject to selection for negotiation could evolve as the Drug Price Negotiation Program is implemented. We further expect continued scrutiny on pricing from Congress, agencies, and other bodies with respect to drug pricing.
In addition, we provide a variety of programs and services that meet our employees' needs and encourage work-life balance. These services include competitive and affordable healthcare and additional insurance benefits for both full-time and part-time employees, including eligible dependents.
In addition, we provide a variety of programs and services that meet our employees' needs and encourage work-life balance. These services 18 Table of Contents include competitive and affordable healthcare and additional insurance benefits for both full-time and part-time employees, including eligible dependents.
The patent term restoration period is generally one-half the time between the effective date of 14 Table of Contents an IND and the submission date of an NDA, plus the time between the submission date of an NDA and the approval of that application, except that the period is reduced by any time during which the applicant failed to exercise due diligence.
The patent term restoration period is generally one-half the time between the effective date of an IND and the submission date of an NDA, plus the time between the submission date of an NDA and the approval of that application, except that the period is reduced by any time during which the applicant failed to exercise due diligence.
The expanded indication is expected to be a maintenance treatment for patients with moderate-to-severe COPD, who are uncontrolled with current SOC triple therapy (LAMA + LABA + ICS) and have evidence of Type 2 inflammation and frequent exacerbation history.
The expanded indication is for maintenance treatment for patients with moderate-to-severe COPD, who are uncontrolled with current SOC triple therapy (LAMA + LABA + ICS) and have evidence of Type 2 inflammation and frequent exacerbation history.
These clinical trials are intended to establish the overall risk/benefit profile of the product and provide an adequate basis for product labeling. ​ The results of product development, preclinical studies and clinical studies must be submitted to the FDA as part of an NDA.
These clinical trials are intended to establish the overall risk/benefit profile of the product and provide an adequate basis for product labeling. ​ 10 Table of Contents The results of product development, preclinical studies and clinical studies must be submitted to the FDA as part of an NDA.
In addition, we have an easily accessible hotline available to employees wishing to report complaints anonymously. 17 Table of Contents ​ Diversity, Equity, and Inclusion As an equal-opportunity employer, we strive to build and maintain a culture of diversity, equity, and inclusion through both our business and human resources practices and policies.
In addition, we have an easily accessible hotline available to employees wishing to report complaints anonymously. ​ Diversity, Equity, Inclusion & Belonging As an equal-opportunity employer, we strive to build and maintain a culture of diversity, equity, inclusion and belonging through both our business and human resources practices and policies.
(collectively, the “generic companies”), that they have each filed with FDA an ANDA, for a generic version of YUPELRI. The notices from the generic companies each included a Paragraph IV certification with respect to five of our patents listed in FDA’s Orange Book for YUPELRI.
(collectively, the “generic companies”), that they have each filed with the FDA an ANDA, for a generic version of YUPELRI. The notices from the generic companies each included a paragraph IV certification with respect to five of our patents listed in the FDA’s Orange Book for YUPELRI on the date of our receipt of the notice.
We also match contributions to tax-qualified defined contribution savings (401k) plans, offer an employee share purchase plan (“ESPP”), and provide training and development programs designed to improve workplace performance while supporting flexible, hybrid-remote working. ​ Understanding the importance of goal setting and ongoing career development conversations, we require managers and employees to play an active role in the PULSE performance management process at monthly, quarterly, and annual frequencies.
We also match contributions to tax-qualified defined contribution savings (401k) plans and provide training and development programs designed to improve workplace performance while supporting flexible, hybrid-remote working. ​ Understanding the importance of goal setting and ongoing career development conversations, we require managers and employees to play an active role in the PULSE performance management process at monthly, quarterly, and annual frequencies.
Where it is necessary to share our proprietary information or data with outside parties, our policy is to make available only that information and data required to accomplish the desired purpose and only pursuant to a duty of confidentiality on the part of those parties. ​ As of December 31, 2023, we owned a total of 176 issued US patents and 1,002 granted foreign patents, as well as additional pending US patent applications and foreign patent applications.
Where it is necessary to share our proprietary information or data with outside parties, our policy is to make available only that information and data required to accomplish the desired purpose and only pursuant to a duty of confidentiality on the part of those parties. ​ As of December 31, 2024, we owned a total of 177 issued US patents and 1,070 granted foreign patents, as well as additional pending US patent applications and foreign patent applications.
Our corporate address in the Cayman Islands is P.O. Box 309, Ugland House, 18 Table of Contents Grand Cayman, KY1-1104, Cayman Islands, and the address of our wholly-owned US operating subsidiary is Theravance Biopharma US, Inc., 901 Gateway Boulevard, South San Francisco, California 94080, which also serves as our principal executive office.
Our corporate address in the Cayman Islands is P.O. Box 309, Ugland House, Grand Cayman, KY1-1104, Cayman Islands, and the address of our wholly-owned US operating subsidiary is Theravance Biopharma US, LLC, 901 Gateway Boulevard, South San Francisco, California 94080, which also serves as our principal executive office.
For proprietary know-how that is not patentable, processes for which patents are difficult to enforce and any other elements 13 Table of Contents of our drug discovery process that involve proprietary know-how and technology that is not covered by patent applications, we rely on trade secret protection and confidentiality agreements to protect our interests.
For proprietary know-how that may not be patentable, processes for which patents are difficult to enforce and any other elements of our drug discovery process that involve proprietary know-how and technology that is not covered by patent applications, we rely on trade secret protection and confidentiality agreements to protect our interests.
These survey results provide important insight into organizational success and allow areas of opportunity to be identified and addressed. ​ We expect all employees to observe the highest levels of business ethics while delivering the highest levels of performance. These expectations are outlined and reinforced in various documents and forms of communication within and across our Company.
These survey results provide important insight into our strengths as an organization and allow areas of opportunity to be identified and addressed. ​ We expect all employees to observe the highest levels of business ethics while delivering the highest levels of performance. These expectations are outlined and reinforced in various documents and forms of communication within and across our Company.
An example of such use includes a LABA/ICS combination, such as AstraZeneca’s Symbicort ® and a LAMA such as Boehringer Ingelheim’s Spiriva ® . ​ Human Capital As of December 31, 2023, we had 99 employees.
An example of such use includes a LABA/ICS combination, such as AstraZeneca’s Symbicort ® and a LAMA such as Boehringer Ingelheim’s Spiriva ® . ​ Human Capital As of December 31, 2024, we had 97 employees.
Our 2023 survey scores averaged an overall score of 4.5 on a scale of 1 (Strongly Disagree) through 5 (Strongly Agree), and we received 100% participation from employees.
Our 2024 survey scores averaged an overall score of 4.4 on a scale of 1 (Strongly Disagree) through 5 (Strongly Agree), and we received 96% participation from employees.
Dupixent is currently indicated for atopic dermatitis, asthma, chronic rhinosinusitis with nasal polyposis, eosinophilic esophagitis and prurigo nodularis. ​ Ampreloxetine norepinephrine reuptake inhibitor (“NRI”) If successfully developed and approved, ampreloxetine would be expected to serve as the only safe, convenient, and durably effective treatment option for MSA patients with symptomatic nOH.
Dupixent is also indicated for atopic dermatitis, asthma, chronic rhinosinusitis with nasal polyposis, eosinophilic esophagitis and prurigo nodularis. ​ Ampreloxetine norepinephrine reuptake inhibitor (“NRI”) If successfully developed and approved in accordance with its target product profile, ampreloxetine would be expected to serve as the only safe, convenient, and durably effective treatment option for MSA patients with symptomatic nOH.
Of these employees, 88 were based in the US, and 11 were based in Dublin, Ireland. ​ Culture and Employee Engagement We consider our employee relations first-rate and strive to provide a culture of purpose, engagement, and learning.
Of these employees, 86 were based in the US, and 11 were based in Dublin, Ireland. ​ Culture and Employee Engagement We consider our employee experience to be first-rate and strive to provide a culture of purpose, engagement, and learning.
The asserted patents relate generally to polymorphic forms of and a method of treatment using YUPELRI. In February 2023, we filed patent infringement suits against the generic companies in federal district court, which continue in the United States District Court for the District of New Jersey.
The asserted patents relate generally to polymorphic forms of and a method of treatment using YUPELRI. In February 2023, we filed patent infringement suits against the generic companies in federal district courts, including the United States District Court for the District of New Jersey, the U.S. District Court for the District of Delaware, and the U.S.
Ampreloxetine, our late-stage investigational once-daily norepinephrine reuptake inhibitor in development for the treatment of symptomatic neurogenic orthostatic hypotension (“nOH”) in patients with Multiple System Atrophy (“MSA”) has the potential to be a first in class therapy effective in treating a constellation of cardinal symptoms in MSA patients. ​ 2023 Significant Developments ​ YUPELRI Sales Growth In 2023, YUPELRI experienced sales growth and reached all-time high yearly net sales and profitability.
Ampreloxetine, our late-stage investigational once-daily norepinephrine reuptake inhibitor in development for the treatment of symptomatic neurogenic orthostatic hypotension (“nOH”) in patients with Multiple System Atrophy (“MSA”), has the potential to be a first in class therapy effective in treating a constellation of cardinal symptoms in MSA patients. ​ Recent Significant Developments YUPELRI Net Sales Growth In 2024, YUPELRI experienced net sales growth and reached launch-to-date highs in annual net sales and brand profitability.
Our implied 35% share of total YUPELRI net sales is presented below: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended December 31, ​ Change ​ (In thousands) 2023 2022 $ % YUPELRI net sales (100% recorded by Viatris) ​ $ 220,962 ​ $ 201,866 ​ $ 19,096 ​ 9 % YUPELRI net sales (Theravance Biopharma implied 35%) ​ ​ 77,337 ​ ​ 70,653 ​ ​ 6,684 ​ 9 ​ ​ Ampreloxetine (TD-9855) ​ Ampreloxetine is an investigational, once-daily norepinephrine reuptake inhibitor (“NRI”) that we are developing for the treatment of Multiple System Atrophy (“MSA”) patients with symptomatic neurogenic orthostatic hypotension (“nOH”). nOH is caused by primary autonomic failure conditions and the majority of patients with MSA experience symptoms of nOH.
Our implied 35% share of total YUPELRI net sales is presented below: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended December 31, ​ Change ​ (In thousands) 2024 2023 $ % YUPELRI net sales (100% recorded by Viatris) ​ $ 238,626 ​ $ 220,962 ​ $ 17,664 ​ 8 % YUPELRI net sales (Theravance Biopharma implied 35%) ​ ​ 83,519 ​ ​ 77,337 ​ ​ 6,182 ​ 8 ​ ​ Ampreloxetine (TD-9855) ​ Ampreloxetine is an investigational, once-daily Norepinephrine Reuptake Inhibitor (“NRI”) that we are developing for the treatment of Multiple System Atrophy (“MSA”) patients with symptomatic neurogenic orthostatic hypotension (“nOH”). nOH is caused by primary autonomic failure conditions and the majority of patients with MSA experience symptoms of nOH.
Royalty rates are upward tiering from 6.5% to 10% and based on total annual net sales. ​ The following information regarding the TRELEGY program is based solely upon publicly available information and may not reflect the most recent developments under the programs. ​ TRELEGY provides the activity of an inhaled corticosteroid (FF) plus two bronchodilators (UMEC, a LAMA, and VI, a long-acting beta2 agonist, or LABA) in a single delivery device administered once-daily.
Total royalty rates are upward tiering from 6.5% to 10% and based on total annual global net sales as follows: ​ ​ ​ TRELEGY Global Net Sales Thresholds Royalty Rate (Annual) Due from GSK to Royalty Pharma ≤ $750.0 million 6.5% > $750.0 million to ≤ $1,250.0 million 8.0% > $1,250.0 million to ≤ $2,250.0 million 9.0% > $2,250.0 million 10.0% ​ The following information regarding the TRELEGY program is based solely upon publicly available information and may not reflect the most recent developments under the programs. ​ TRELEGY provides the activity of an inhaled corticosteroid (FF) plus two bronchodilators (UMEC, a LAMA, and VI, a long-acting beta2 agonist, or LABA) in a single delivery device administered once-daily.
For the next potential Milestone Payment, we are eligible to receive either (i) $25.0 million if Royalty Pharma receives $240.0 million or more in royalty payments from GSK with respect to 2024 TRELEGY global net sales, which we would expect to occur in the event TRELEGY global net sales are approximately $2.86 billion; or (ii) $50.0 million if Royalty Pharma receives $275.0 million or more in royalty payments from GSK with respect to 2024 TRELEGY global net sales, which we would expect to occur in the event TRELEGY global net sales exceed approximately $3.21 billion.
For the next potential Milestone Payment, we are eligible to receive either (i) $25.0 million if Royalty Pharma receives $260.0 million or more in royalty payments from GSK with respect to 2025 TRELEGY global net sales, which we would expect to occur in the event TRELEGY global net sales are approximately $3.06 billion or (ii) $50.0 million if Royalty Pharma receives $295.0 million or more in royalty payments from GSK with respect to 2025 TRELEGY global net sales, which we would expect to occur in the event TRELEGY global net sales exceed approximately $3.41 billion.
During 2023, Sunovion Pharmaceuticals Inc. voluntarily withdrew Lonhala ® Magnair ® (glycopyrrolate) from the US market due to limited utilization, leaving YUPELRI as the only approved nebulized LAMA as of December 31, 2023. ​ Verona Pharma plc’s ensifentrine, a first-in-class, selective inhaled dual inhibitor of PDE3 and PDE4 is expected to launch in the US in the second half of 2024.
During 2023, Sunovion Pharmaceuticals Inc. voluntarily withdrew Lonhala ® Magnair ® (glycopyrrolate) from the US market due to limited utilization, leaving YUPELRI as the only approved nebulized LAMA. ​ Verona Pharma plc’s ensifentrine, a first-in-class, selective inhaled dual inhibitor of PDE3 and PDE4 received FDA approval in June 2024.
In particular, our wholly-owned subsidiary Theravance Biopharma R&D IP, LLC owns the following US patents that are listed in the FDA Approved Drug Products with Therapeutic Equivalence Evaluations (Orange Book) for YUPELRI (revefenacin) inhalation solution: US Patent No. 7,288,657, expiring on December 23, 2025; US Patent No. 7,491,736, expiring March 10, 2025; US Patent No. 7,521,041, expiring March 10, 2025; US Patent No. 7,550,595, expiring March 10, 2025; US Patent No. 7,585,879, expiring March 10, 2025; US Patent No. 7,910,608, expiring March 10, 2025; US Patent No. 8,034,946, expiring March 10, 2025; US Patent No. 8,053,448, expiring March 10, 2025; US Patent No. 8,273,894, expiring March 10, 2025; US Patent No. 8,541,451, expiring August 25, 2031; US Patent No. 9,765,028, expiring July 14, 2030; US Patent No. 10,106,503, expiring March 10, 2025; US Patent No. 10,343,995, expiring March 10, 2025; US Patent No. 10,550,081, expiring July 14, 2030; US Patent No. 11,008,289, expiring July 14, 2030; US Patent No. 11,247,969, expiring March 10, 2025; US Patent 11,484,531, expiring October 23, 2039; US Patent 11,691,948, expiring July 14, 2030; and US Patent 11,858,898, expiring July 14, 2030 (each of the aforementioned expiration dates not including any patent term extensions that may be available under the Drug Price Competition and Patent Term Restoration Act of 1984).
In particular, our wholly-owned subsidiary Theravance Biopharma R&D IP, LLC owns the following US patents that are listed in the FDA Approved Drug Products with Therapeutic Equivalence Evaluations (Orange Book) for YUPELRI (revefenacin) inhalation solution: US Patent No. 7,288,657, expiring on October 31, 2028 (including patent term extension); US Patent No. 7,491,736, expiring March 10, 2025; US Patent No. 7,521,041, expiring March 10, 2025; US Patent No. 7,550,595, expiring March 10, 2025; US Patent No. 7,585,879, expiring March 10, 2025; US Patent No. 7,910,608, expiring March 10, 2025; US Patent No. 8,034,946, expiring March 10, 2025; US Patent No. 8,053,448, expiring March 10, 2025; US Patent No. 8,273,894, expiring March 10, 2025; US Patent No. 8,541,451, expiring August 25, 2031; US Patent No. 9,765,028, expiring July 14, 2030; US Patent No. 10,106,503, expiring March 10, 2025; US Patent No. 10,343,995, expiring March 10, 2025; US Patent No. 10,550,081, expiring July 14, 2030; US Patent No. 11,008,289, expiring July 14, 2030; US Patent No. 11,247,969, expiring March 10, 2025; US Patent No. 11,484,531, expiring October 23, 2039; US Patent No. 11,691,948, expiring July 14, 2030; US Patent No. 11,858,898, expiring July 14, 2030; and US Patent No. 12,048,692, expiring August 29, 2039.
Additionally, the FDA approved an sNDA for the use of TRELEGY to treat asthma in adults in September 2020 making TRELEGY the first once-daily single inhaler triple therapy for the treatment of both asthma and COPD in the US. GSK has obtained approval for the asthma indication in ten additional markets.
Additionally, the FDA approved an sNDA for the use of TRELEGY to treat asthma in adults in September 2020 making TRELEGY the first once-daily single inhaler triple therapy for the treatment of both asthma and COPD in the US.
Similar obligations apply outside of the US. For example, the General Data Protection Regulation (“GDPR”) amplified existing data protection obligations in the EU.
Similar obligations apply outside of the US. For example, the General Data Protection Regulation, including as implemented in the UK (collectively “GDPR”) amplified existing data protection obligations in the EU.
Through the combined commercialization efforts with our partner Viatris Inc. (“Viatris”), total YUPELRI net sales increased by 9% to $221.0 million in 2023 compared to 2022.
Through the combined commercialization efforts with our partner Viatris Inc. (“Viatris”), total YUPELRI net sales increased by 8% to $238.6 million in 2024 compared to 2023.
The patent litigation against the three remaining generic companies, along with certain affiliates, remains pending. ​ This litigation and the related risks are described in greater detail under the risk factor “ Litigation to protect or defend our intellectual property or third-party claims of intellectual property infringement would require us to divert resources and may prevent or delay our drug discovery and development efforts” of this Annual Report on Form 10-K. ​ Competition Our late-stage development programs, and the marketed products to which we are entitled to profit share revenue, royalty or similar payments are primarily focused on respiratory and neurological therapeutics.
This suit has been consolidated with the action described above. ​ This litigation and the related risks are described in greater detail under the risk factor “ Litigation to protect or defend our intellectual property or third-party claims of intellectual property infringement will require us to divert resources and may prevent or delay our drug development and commercialization efforts” of this Annual Report on Form 10-K. ​ Competition Our late-stage development program, and the marketed products to which we are entitled to profit share revenue, royalty or similar payments are primarily focused on respiratory and neurological therapeutics.
Our ability to compete successfully will depend largely on our ability to leverage our experience in drug development and commercialization to: ​ ● develop medicines that are superior to other products in the market; ● attract and retain qualified scientific, clinical development and commercial personnel; ● obtain patent and/or other proprietary protection for our medicines and technologies; ● obtain required regulatory approvals; ● commercialize approved products; and ● successfully collaborate with pharmaceutical companies in the development and commercialization of new medicines.
Our ability to compete successfully will depend largely on our ability to leverage our experience in drug development and commercialization to: ​ ● develop medicines that are superior to other products in the market; ● attract and retain qualified scientific, clinical development and commercial personnel; ● obtain patent and/or other proprietary protection for our medicines and technologies; ● obtain required regulatory approvals; ● commercialize approved products; and ● successfully collaborate with pharmaceutical companies in the development and commercialization of new medicines. 16 Table of Contents YUPELRI (revefenacin) inhalation solution YUPELRI competes predominately with short-acting nebulized bronchodilators that are dosed three to four times per day.
Hospital volumes, which we are directly responsible for, grew 46% in 2023 compared to 2022 and was a meaningful contributor to YUPELRI’s overall net sales growth for the year. ​ Initiation of Ampreloxetine New Phase 3 Clinical Study In the first quarter of 2023, we initiated the ampreloxetine new Phase 3 clinical study (CYPRESS) in MSA patients with symptomatic nOH, using the Orthostatic Hypotension Symptom Assessment Scale (“OHSA”) composite score as the primary endpoint.
Hospital volumes, which we are directly responsible for, grew 41% in 2024 compared to 2023 and continued to be a meaningful contributor to YUPELRI’s overall net sales growth for the year. ​ Continued Enrollment in Ampreloxetine Phase 3 Clinical Study We continued to make steady progress with the open-label enrollment of our ampreloxetine Phase 3 clinical study (CYPRESS) in MSA patients with symptomatic nOH, using the Orthostatic Hypotension Symptom Assessment Scale (“OHSA”) composite score as the primary endpoint.
In June 2023, we received notice from Pfizer terminating the Pfizer Agreement, effective as of October 7, 2023, at which time the skin-selective pan-JAK inhibitor program was returned to us. ​ Economic Interests and Other Assets ​ Mid- and Long-Term Economic Interest in TRELEGY ® In July 2022, we completed the sale of all of our equity interests in Theravance Respiratory Company, LLC (“TRC”) representing our 85% economic interest in the sales-based royalty rights on worldwide net sales of GSK plc's (“GSK”) TRELEGY ELLIPTA (“TRELEGY”) to Royalty Pharma for approximately $1.1 billion in upfront cash while retaining future value through the right to receive contingent milestone payments and certain outer year-royalties (the “TRELEGY Royalty Transaction”). ​ From and after January 1, 2023, for any calendar year starting with the year ended December 31, 2023 and ending with the year December 31, 2026, upon certain milestone minimum royalty amounts for TRELEGY being met, Royalty Pharma is obligated to make certain cash payments to us (the “Milestone Payment(s)”).
If ampreloxetine regulatory approval is not achieved or if ampreloxetine sales are never recognized, the amounts invested by Royalty Pharma would not be repaid by us. ​ Economic Interests and Other Assets ​ Mid- and Long-Term Economic Interest in TRELEGY ® In July 2022, we completed the sale of all of our equity interests in Theravance Respiratory Company, LLC (“TRC”) representing our 85% economic interest in the sales-based royalty rights on worldwide net sales of GSK plc's (“GSK”) TRELEGY ELLIPTA (“TRELEGY”) to Royalty Pharma for approximately $1.11 billion in upfront cash while retaining future value through the right to receive contingent milestone payments and certain outer year-royalties. ​ From and after January 1, 2023, for any calendar year starting with the year ended December 31, 2023 and ending with the year December 31, 2026, upon certain milestone minimum royalty amounts for TRELEGY being met, Royalty Pharma is obligated to make certain cash payments to us (the “Milestone Payments(s)”).
These new complaints do not result in any further stay of approval by FDA. ​ As of February 28, 2024, we have settled all litigation with Accord Healthcare, Inc.; Lupin Pharmaceuticals, Inc.; Orbicular Pharmaceutical Technologies Private Limited; and Teva Pharmaceuticals, Inc. pursuant to individual agreements in which we granted these companies a royalty-free, non-exclusive, non-sublicensable, non-transferable license to manufacture and market their respective generic versions of YUPELRI inhalation solution in the US on or 15 Table of Contents after the licensed launch date of April 23, 2039, subject to certain exceptions as is customary in these type of agreements.
The complaint alleges that by filing the ANDA, the subsequent ANDA filer has infringed certain of our Orange Book listed patents. ​ As of February 28, 2025, we have settled all litigation with Accord Healthcare, Inc.; Lupin Pharmaceuticals, Inc.; Orbicular Pharmaceutical Technologies Private Limited; Qilu Pharmaceuticals Co., Ltd.; and Teva Pharmaceuticals, Inc. pursuant to individual agreements in which we granted these companies a royalty-free, non-exclusive, non-sublicensable, non-transferable license to manufacture and market their respective generic versions of YUPELRI inhalation solution in the US on or after the licensed launch date of April 23, 2039, subject to certain exceptions as is customary in these type of agreements.
Nebulized ensifentrine has the potential to be complementary to YUPELRI given that it is another nebulized treatment for COPD. ​ Sanofi and Regeneron Pharmaceutical, Inc. are expecting US approval for their first-in-class, IL-4/IL-13 monoclonal antibody (mAb) Dupixent ® (dupilumab) for COPD in the second half of 2024.
Nebulized ensifentrine has the potential to be complementary to YUPELRI given that it is another nebulized treatment for COPD maintenance care and is positioned as an add-on to standard of care (“SOC”) therapy which includes LAMA + LABA. ​ Sanofi and Regeneron Pharmaceutical, Inc. received US approval for their first-in-class, IL-4/IL-13 monoclonal antibody (mAb) Dupixent ® (dupilumab) for COPD in September 2024.
In addition, we put forth a proposal to declassify the board of the directors over time which was approved at our May 2023 Annual General Meeting of Shareholders. 4 Table of Contents Our Programs The chart below summarizes the status of our approved product, product candidate in development, and economic interest. ​ ​ ​ ​ Glossary of Defined Terms used in Table Above: COPD: Chronic Obstructive Pulmonary Disease; FF: Fluticasone Furoate; LAMA: Long-Acting Muscarinic Antagonist; MSA: Multiple System Atrophy; nOH: Neurogenic Orthostatic Hypotension; NRI: Norepinephrine Reuptake Inhibitor; UMEC: Umeclidinium; and VI: Vilanterol ​ Core Program Updates YUPELRI (revefenacin) Inhalation Solution ​ YUPELRI (revefenacin) inhalation solution is a once-daily, nebulized long-acting muscarinic antagonist (“LAMA”) approved for the maintenance treatment of COPD in the US.
We have not set a timetable for completion of this process, and we do not intend to disclose further developments unless and until we determine that such disclosure is appropriate or necessary. 4 Table of Contents Our Programs ​ The chart below summarizes the status of our approved product, product candidate in development, and economic interest. ​ ​ ​ ​ ​ Glossary of Defined Terms used in Table Above: COPD: Chronic Obstructive Pulmonary Disease; FF: Fluticasone Furoate; LAMA: Long-Acting Muscarinic Antagonist; MSA: Multiple System Atrophy; nOH: Neurogenic Orthostatic Hypotension; NRI: Norepinephrine Reuptake Inhibitor; UMEC: Umeclidinium; and VI: Vilanterol ​ Core Program Updates YUPELRI (revefenacin) Inhalation Solution ​ YUPELRI (revefenacin) inhalation solution is a once-daily, nebulized long-acting muscarinic antagonist (“LAMA”) approved for the maintenance treatment of COPD in the US.
Viatris plans to move forward with a registrational filing for YUPELRI in China in mid-2024. ​ In August 2021, we announced that in collaboration with our partner Viatris, we were initiating a Phase 4 study comparing improvements in lung function in adults with severe to very severe COPD and suboptimal inspiratory flow rate following once-daily treatment with either revefenacin (YUPELRI) delivered via standard jet nebulizer or tiotropium delivered via a dry powder inhaler (Spiriva ® HandiHaler ® ).
In June 2024, Viatris completed a registrational filing for YUPELRI in China which may lead us to receive (i) a $7.5 million milestone upon regulatory approval in the China Region and (ii) a 14% - 20% royalty on net sales generated in the China Region, as shown above. ​ In August 2021, we announced that in collaboration with our partner Viatris, we were initiating a Phase 4 study comparing improvements in lung function in adults with severe to very severe COPD and suboptimal inspiratory flow rate following once-daily treatment with either revefenacin (YUPELRI) delivered via standard jet nebulizer or tiotropium delivered via a dry powder inhaler (Spiriva ® HandiHaler ® ).
Before marketing in the US, any medicine must undergo rigorous preclinical studies and clinical studies and an extensive regulatory approval process implemented by the FDA under the Federal Food, Drug, and Cosmetic Act.
Before marketing in the US, any medicine must undergo rigorous preclinical studies and clinical studies and an extensive regulatory approval process implemented by the FDA under the Federal Food, Drug, and Cosmetic Act. ​ Outside the US, the ability to market a product depends upon receiving a marketing authorization from the appropriate regulatory authorities which are subject to equally rigorous regulatory obligations.
Fourth quarter of 2023 global net sales were $737.0 million which represented an increase of 35% year-over-year, and total 2023 global net sales were $2.7 billion which represented an increase of 28% year-over-year. ​ In addition to potential Milestone Payments, we will receive from Royalty Pharma 85% of the royalty payments on TRELEGY payable (a) for sales or other activities occurring on and after January 1, 2031 related to TRELEGY in the 8 Table of Contents US, and (b) for sales or other activities occurring on and after July 1, 2029 related to TRELEGY outside of the US.
Total 2024 TRELEGY global net sales represented a 26% increase compared to 2023, and TRELEGY is currently expected to generate global peak sales of $4.0 billion in 2026 according to consensus estimates. ​ In addition to potential Milestone Payments, we will receive from Royalty Pharma 85% of the royalty payments on TRELEGY payable to Royalty Pharma for: (a) sales or other activities occurring on and after January 1, 2031 related to TRELEGY in the US; and (b) sales or other activities occurring on and after July 1, 2029 related to TRELEGY outside of the US.
Additionally, the exclusivity applies only to the conditions of approval that required submission of the clinical data. ​ Once the FDA accepts for filing an ANDA or 505(b)(2) application containing a Paragraph IV certification, the applicant must within 20 days provide notice to the RLD NDA holder and patent owner that the application has been submitted and provide the factual and legal basis for the applicant’s assertion that the patent is invalid or not infringed.
An ANDA or 505(b)(2) application may be submitted after four years, however, if the sponsor of the application makes a “Paragraph IV” certification stating that one or more of the Orange Book listed patents are invalid or will not be infringed by the applicant’s product. ​ Once the FDA accepts for filing an ANDA or 505(b)(2) application containing a Paragraph IV certification, the applicant must within 20 days provide notice to the RLD NDA holder and patent owner that the application has been submitted and provide the factual and legal basis for the applicant’s assertion that the patent is invalid or not infringed.
We have a strong value proposition anchored in our Core Values— We Think it Through, We Find a Way, We Get it Done, and We Win Together. We strive to live these values across the Company every day, integrating them into everything from our interview, hiring, and onboarding processes to our PULSE performance process, total rewards, and recognition programs.
We strive to live these values across the Company every day, integrating them into everything from our interview, hiring, and onboarding processes to our PULSE performance process, total rewards, 17 Table of Contents and recognition programs.
These PTE applications are currently pending and, if granted, we will be permitted to extend the term of one of these patents for the period determined by the USPTO. ​ The patent rights relating to YUPELRI (revefenacin) inhalation solution currently consist of issued US patents, pending US patent applications and certain counterpart patents and patent applications in a number of jurisdictions, including Europe and China. ​ Additionally, some of our patents and patent applications are directed to products in development.
Thus, the last to expire patent currently listed in the Orange Book for YUPELRI (revefenacin) inhalation solution expires on October 23, 2039. ​ The patent rights relating to YUPELRI (revefenacin) inhalation solution currently consist of issued US patents, pending US patent applications and certain counterpart patents and patent applications in a number of jurisdictions, including Europe and China. ​ Additionally, some of our patents and patent applications are directed to products in development.
This study was aimed at helping to better inform decisions when physicians are designing a personalized COPD treatment plan with patients. We agreed to pay 35% of the Phase 4 study costs, and Viatris agreed to pay 65% of the Phase 4 study costs. The first patient for the Phase 4 study was enrolled in January 2022.
This study was aimed at helping to better inform decisions when physicians are designing a personalized COPD treatment plan with patients.
In any country, however, the commercialization of pharmaceutical products is permitted only if the appropriate regulatory authority is satisfied that we have presented adequate evidence of the safety, quality and efficacy of the product. ​ Before commencing clinical studies in humans in the US, we must submit to the FDA an investigational new drug application (“IND”) that includes, among other things, the general investigational plan and protocols for specific human studies and the results of preclinical studies.
The legislative process for this reform is expected to take several years, and adoption of the new legislation is not expected to take place before 2026. ​ Before commencing clinical studies in humans in the US, we must submit to the FDA an investigational new drug application (“IND”) that includes, among other things, the general investigational plan and protocols for specific human studies and the results of preclinical studies.
US TRELEGY royalties payable to us by Royalty Pharma are expected to end in late 2032, and ex-US royalties are expected to end in the mid-2030s and are country specific.
We expect fifteen years after the commercial launch 8 Table of Contents in the US will occur in late 2032 and fifteen years after the first commercial launch in ex-US jurisdictions will start occurring in the mid-2030s. US TRELEGY royalties payable to us by Royalty Pharma are country specific.
That complaint alleges that by filing the ANDAs, the generic companies have infringed five of our Orange Book listed patents. We are seeking a permanent injunction to prevent the generic companies from introducing a generic version of YUPELRI that would infringe our patents.
We are seeking a permanent injunction to prevent the generic companies from introducing a generic version of YUPELRI that would infringe our patents. As a result of this lawsuit, a stay of approval through May 2026 has been imposed by the FDA on the generic companies’ ANDAs pending any adverse court decision.
This Phase 3 study was initiated in the first quarter of 2023, and the study is currently open to recruitment with the expectation of enrolling the final patient into the open label period of the study in the second half of 2024.
This Phase 3 study was initiated in the first quarter of 2023, and we currently anticipate that the final patient will be enrolled in the open label period of the study in mid-2025 and we expect that top-line data will be available approximately six months thereafter.
Over the past three years, TRELEGY has shown substantial growth, with global net sales increasing annually from $661.4 million in 2019 to $2.7 billion in 2023. ​ See “Risk Factors—We do not control the commercialization of TRELEGY; accordingly, our receipt of Milestone Payments and receipt of the value we currently anticipate from the Outer Years Royalty will depend on, among other factors, GSK’s ability to further commercialize TRELEGY” for additional information. ​ Development Projects Our focus remains on near-term value opportunities which consists of executing our ampreloxetine registration Phase 3 study (CYPRESS) and preparing for the NDA filing process.
GSK continues to pursue approval for the asthma indication in additional markets. ​ See “Risk Factors—We do not control the commercialization of TRELEGY; accordingly, our receipt of Milestone Payments and receipt of the value we currently anticipate from the Outer Years Royalty will depend on, among other factors, GSK’s ability to further commercialize TRELEGY” for additional information. ​ Our Strategy Our focus is to deliver medicines that make a difference ® in people's lives.
The FDA may approve the proposed product before the expiration of the regulatory stay if a court finds the patent invalid or not infringed or if the court shortens the period because the parties have failed to cooperate in expediting the litigation. ​ During January 2023, we received notice from Accord Healthcare, Inc.; Cipla USA, Inc. and Cipla Limited; Eugia Pharma Specialties Ltd.; Lupin Inc.; Mankind Pharma Ltd.; Orbicular Pharmaceutical Technologies Private Limited; and Teva Pharmaceuticals, Inc.
This orphan drug exclusivity runs concurrently with any NCE exclusivity described above. ​ During January 2023, we received notice from Accord Healthcare, Inc.; Cipla USA, Inc. and Cipla Limited; Eugia Pharma Specialties Ltd.; Lupin Inc.; Mankind Pharma Ltd.; Orbicular Pharmaceutical Technologies Private Limited; and Teva Pharmaceuticals, Inc.
Removed
In May 2023, we announced that the FDA granted Orphan Drug Designation status to ampreloxetine for the treatment of symptomatic nOH in patients with MSA.
Added
Current enrollment is in-line with expectations for completion in mid-2025, with data anticipated to be available approximately six months later. ​ Achievement of $50.0 Million TRELEGY ® Royalty Milestone Payment for 2024 In February 2025, we received a $50.0 million maximum milestone payment from Royalty Pharma Investments associated with the achievement of certain minimum royalty payments related to 2024 TRELEGY global net sales.
Removed
The study is currently enrolling patients with 42 clinical sites open across 11 countries, as of February 26, 2024. ​ Capital Return Program In 2023, we repurchased 18.63 million of our shares on the open market at a weighted average cost of $10.551 per share for an approximate aggregate cost of $196.6 million, excluding fees and expenses.
Added
TRELEGY’s 2024 global net sales of $3.46 billion would exceed the threshold required to achieve $50.0 million of milestones in 2025 (based on $3.41 billion of global net sales) with only 2% growth required to achieve $100.0 million of milestones in 2026 (based on $3.51 billion of global net sales). ​ Formation of Strategic Review Committee In November 2024, the board of directors announced the formation of a Strategic Review Committee composed entirely of independent directors to assess all strategic alternatives to the Company, including those related to YUPELRI, ampreloxetine, and TRELEGY, with the objective of unlocking shareholder value.
Removed
Since the inception of the capital return program in September 2022 through its completion in early January 2024, we repurchased a total of 31.41 million shares at a weighted average cost of $10.354 per share for an approximate aggregate cost of $325.3 million which reduced our shares by 37% since the inception of the capital return program. ​ Discontinued Investment in Research In February 2023, we announced that we discontinued our research activities, including the inhaled Janus kinase (JAK) inhibitor program, and prioritized our R&D resources toward the ampreloxetine Phase 3 study and the completion of the YUPELRI Peak Inspiratory Flow Rate (PIFR-2) Phase 4 study.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeThe GDPR and Switzerland’s data protection laws impose a broad range of requirements and obligations relating to the processing and protection of personal data, including obligations to having legal bases for processing personal data (which may result in some instances in obtaining the consent of the individuals to whom the personal data relate), providing detailed information about the processing activities to the individuals, dealing with restrictions on sharing of personal data with third parties and transferring personal data out of the European Economic Area (“EEA”) or Switzerland, having contracting arrangements in place where required (such as with clinical trial sites and vendors), notifying in certain instances personal data breaches to data protection authorities and/or affected individuals, appointing data protection officers, conducting data protection impact assessments, responding to privacy rights requests and keeping records of processing activities. .
Biggest changeOther obligations relate to restrictions on sharing of personal data with third-parties and transferring personal data out of the European Economic Area (“EEA”), Switzerland, or the UK to third countries including the US, having contracting arrangements in place where required (such as with clinical trial sites and vendors), appointing data protection officers, conducting data protection impact assessments, responding to privacy rights requests and keeping records of processing activities.
In addition, effective collaboration with a partner requires coordination to achieve complex and detail-intensive goals between entities that potentially have different priorities, capabilities and processes and successful navigation of the challenges such coordination entails.
In addition, effective collaboration with a partner requires coordination to achieve complex and detail-intensive goals between entities that potentially have different priorities, capabilities and processes and successful navigation of the challenges such coordination entails.
In addition, for so long as we remain a smaller reporting company and not classified as an “accelerated filer” or “large accelerated filer” pursuant to SEC rules, we will be exempt from the auditor attestation requirements of Section 404(b) of the Sarbanes-Oxley Act. ​ We will remain a smaller reporting company so long as, as of June 30 of the preceding year, (i) the market value of our ordinary shares held by non-affiliates, or our public float, is less than $250.0 million; or (ii) we have annual revenues less than $100.0 million and either we have no public float or our public float is less than $700.0 million. ​ If we take advantage of some or all of the reduced disclosure requirements available to smaller reporting companies, investors may find our ordinary shares less attractive, which may result in a less active trading market for our common stock and greater stock price volatility. ​ ITEM 1B.
In addition, for so long as we remain a smaller reporting company and not classified as an “accelerated filer” or “large accelerated filer” pursuant to SEC rules, we will be exempt from the auditor attestation requirements of Section 404(b) of the Sarbanes-Oxley Act. ​ We will remain a smaller reporting company so long as, as of June 30 of the preceding year, (i) the market value of our ordinary shares held by non-affiliates, or our public float, is less than $250.0 million or (ii) we have annual revenues less than $100.0 million and either we have no public float or our public float is less than $700.0 million. ​ If we continue to take advantage of some or all of the reduced disclosure requirements available to smaller reporting companies, investors may find our ordinary shares less attractive, which may result in a less active trading market for our common stock and greater stock price volatility. ​ ITEM 1B.
Whether any of our products are selected for negotiation for a given year will depend on whether they are at least 7 years post-approval/licensure; whether they meet any of the exclusions from eligibility for selection for negotiation, such as the exclusion of certain orphan drugs; their expenditures under Medicare Part B or Part D during a statutorily specified period; and whether a generic of the product has been determined to have come to market.
Whether any of our marketed products are selected for negotiation for a given year will depend on whether they are at least 7 years post-approval/licensure; whether they meet any of the exclusions from eligibility for selection for negotiation, such as the exclusion of certain orphan drugs; their expenditures under Medicare Part B or Part D during a statutorily specified period; and whether a generic of the product has been determined to have come to market.
Our strategic business plan is subject to significant uncertainties and risks as a result of, among other factors, the sales levels of our approved product, unplanned expenses, clinical program outcomes, expenses being higher than anticipated, cash receipts being lower than anticipated, whether, when and on what terms we are able to enter into new collaboration arrangements, and the need to satisfy contingent liabilities.
Our strategic business plan is subject to significant uncertainties and risks as a result of, among other factors, the sales levels of our approved product, unplanned expenses, clinical program outcomes, expenses being higher than anticipated, revenue and cash receipts being lower than anticipated, whether, when and on what terms we are able to enter into new collaboration arrangements, and the need to satisfy contingent liabilities.
We expect we, our collaboration partners, or those commercializing products with respect to which we have an economic interest or right to receive royalties may experience pricing pressures in connection with the sale of drug products, due to the trend toward managed healthcare, the increasing influence of health maintenance organizations and additional legislative enactments and administrative policies.
We expect we, our collaboration partners, or those commercializing products with respect to which we have an economic interest or right to receive royalties may experience pricing pressures in connection with the sale of drug products, due to the trend toward managed healthcare, the increasing influence of health maintenance organizations, distributors and additional legislative enactments and administrative policies.
Changes in healthcare law and implementing regulations, including government restrictions on pricing and reimbursement, as well as healthcare policy and other healthcare payor cost-containment initiatives, may negatively impact us, our collaboration partners, or those commercializing products with respect to which we have an economic interest or right to receive royalties.
Changes in healthcare law and implementing regulations, including government restrictions on pricing and reimbursement, as well as healthcare policy and other healthcare payor and distributor cost-containment initiatives, may negatively impact us, our collaboration partners, or those commercializing products with respect to which we have an economic interest or right to receive royalties.
We expect that additional state and federal healthcare reform measures will be adopted in the future, any of which could limit the amounts that federal and state governments will pay for healthcare products and services, which could result in reduced demand for product or additional pricing pressures for our collaboration partners, or those commercializing products with respect to which we have an economic interest or right to receive royalties, which could impact our revenues. 41 Table of Contents If we failed to comply with our reporting and payment obligations under the Medicaid Drug Rebate program or other governmental pricing programs, we could be subject to additional reimbursement requirements, penalties, sanctions and fines, which could have a material adverse effect on our business, financial condition, results of operations and growth prospects.
We expect that additional state and federal healthcare reform measures will be adopted in the future, any of which could limit the amounts that federal and state governments will pay for healthcare products and services, which could result in reduced demand for product or additional pricing pressures for our collaboration partners, or those commercializing products with respect to which we have an economic interest or right to receive royalties, which could impact our revenues. 42 Table of Contents If we failed to comply with our reporting and payment obligations under the Medicaid Drug Rebate program or other governmental pricing programs, we could be subject to additional reimbursement requirements, penalties, sanctions and fines, which could have a material adverse effect on our business, financial condition, results of operations and growth prospects.
In addition, manufacturers of our API and drug product are subject to the FDA’s current Good Manufacturing Practice (“cGMP”) regulations and similar foreign standards and we do not have control over compliance with these regulations by our manufacturers. ​ Our manufacturing strategy presents the following additional risks: ● because of the complex nature of many of our compounds, our manufacturers may not be able to successfully manufacture our APIs and/or drug products in a cost-effective and/or timely manner and changing manufacturers for our APIs or drug products could involve lengthy technology transfer, validation and regulatory qualification activities for the new manufacturer; ​ ● the processes required to manufacture certain of our APIs and drug products are specialized and available only from a limited number of third-party manufacturers; ​ ● the availability of specialized materials needed to manufacture our APIs and drug products or YUPELRI; ​ ● because some of the third-party manufacturers are located in numerous locations outside of the US, and we are conducting global clinical trials there may be difficulties in shipping and importing and exporting our APIs and drug products or their components globally. ​ We are subject to extensive and ongoing regulation, oversight and other requirements by the FDA and failure to comply with these regulations and requirements may subject us to penalties that may adversely affect our financial condition or our ability to commercialize any approved products.
In addition, manufacturers of our API and drug product are subject to the FDA’s current Good Manufacturing Practice (“cGMP”) 26 Table of Contents regulations and similar foreign standards and we do not have control over compliance with these regulations by our manufacturers. ​ Our manufacturing strategy presents the following additional risks: ● because of the complex nature of many of our compounds, our manufacturers may not be able to successfully manufacture our APIs and/or drug products in a cost-effective and/or timely manner and changing manufacturers for our APIs or drug products could involve lengthy technology transfer, validation and regulatory qualification activities for the new manufacturer; ​ ● the processes required to manufacture certain of our APIs and drug products are specialized and available only from a limited number of third-party manufacturers; ​ ● the availability of specialized materials needed to manufacture our APIs and drug products or YUPELRI; ​ ● because some of the third-party manufacturers are located in numerous locations outside of the US, and we are conducting global clinical trials there may be difficulties in shipping and importing and exporting our APIs and drug products or their components globally. ​ We are subject to extensive and ongoing regulation, oversight and other requirements by the FDA and failure to comply with these regulations and requirements may subject us to penalties that may adversely affect our financial condition or our ability to commercialize any approved products.
Our collaboration partner, Viatris, is responsible for enforcing our Orange Book patents relating to YUPELRI, in consultation with us, and our views may differ from theirs with respect to the ongoing litigation, process or strategy and we have a reduced ability to control the outcome of the litigation.
Our collaboration partner, Viatris, is responsible for enforcing our Orange Book patents relating to YUPELRI, in consultation with us, and our views may differ from theirs with respect to process or strategy, and we have a reduced ability to control the outcome of the litigation.
For additional discussion of the risk of generic competition to YUPELRI, please see the risk factor below entitled “ If our efforts to protect the proprietary nature of the intellectual property related to our technologies are not adequate, we may not be able to compete effectively in our current or future markets ” and “ Litigation to protect or defend our intellectual property or third party claims of intellectual property infringement will require us to divert resources and may prevent or delay our drug discovery and development efforts .” If we are unable to enter into future collaboration arrangements or if any such collaborations with third parties are unsuccessful, we may be unable to fully develop and commercialize certain product candidates and our business will be adversely affected.
For additional discussion of the risk of generic competition to YUPELRI, please see the risk factor below entitled “ If our efforts to protect the proprietary nature of the intellectual property related to our technologies are not adequate, we may not be able to compete effectively in our current or future markets ” and “ Litigation to protect or defend our intellectual property or third-party claims of intellectual property infringement will require us to divert resources and may prevent or delay our drug development and commercialization efforts .” If we are unable to enter into future collaboration arrangements or if any such collaborations with third-parties are unsuccessful, we may be unable to fully develop and commercialize certain product candidates and our business will be adversely affected.
We are incorporated in the Cayman Islands, maintain subsidiaries in the Cayman Islands (until December 2020), the US, the UK and Ireland, and effective July 1, 2015, we migrated our tax residency from the Cayman Islands to Ireland. Due to economic and political conditions, various countries are actively considering changes to existing tax laws.
We are incorporated in the Cayman Islands, maintain subsidiaries in the Cayman Islands (until December 2020), the US, and Ireland, and effective July 1, 2015, we migrated our tax residency from the Cayman Islands to Ireland. Due to economic and political conditions, various countries are actively considering changes to existing tax laws.
The risks of fulfilling our US co-promotion obligations to Viatris include: ● costs and expenses associated with maintaining an independent sales and marketing organization with appropriate technical expertise and supporting infrastructure, including third-party vendor logistics and 21 Table of Contents consultant support, which costs and expenses could, depending on the scope and method of the marketing effort, exceed any product revenue; ​ ● our ability to retain effective sales and marketing personnel and medical science liaisons in the US; ​ ● the ability of our sales and marketing personnel to obtain access to, and educate adequate numbers of prescribers about prescribing YUPELRI, in appropriate clinical situations; and ​ ● the lack of complementary products to be offered by sales personnel, which may put us at a competitive disadvantage relative to companies with more extensive product lines. ​ If we are not successful in maintaining a sales and marketing organization with appropriate experience, technical expertise, supporting infrastructure and the ability to obtain access to and educate adequate numbers of physicians about prescribing YUPELRI in appropriate clinical situations, we will have difficulty maintaining effective commercialization of YUPELRI in the hospital setting, which would adversely affect our business and financial results, and the condition and the price of our securities could fall.
The risks of fulfilling our US co-promotion obligations to Viatris include: ● costs and expenses associated with maintaining an independent sales and marketing organization with appropriate technical expertise and supporting infrastructure, including third-party vendor logistics and consultant support, which costs and expenses could, depending on the scope and method of the marketing effort, exceed any product revenue; ​ ● our ability to retain effective sales and marketing personnel and medical science liaisons in the US; ​ ● the ability of our sales and marketing personnel to obtain access to, and educate adequate numbers of prescribers about prescribing YUPELRI, in appropriate clinical situations; and ​ ● the lack of complementary products to be offered by sales personnel, which may put us at a competitive disadvantage relative to companies with more extensive product lines. ​ If we are not successful in maintaining a sales and marketing organization with appropriate experience, technical expertise, supporting infrastructure and the ability to obtain access to and educate adequate numbers of physicians about prescribing YUPELRI in appropriate clinical situations, we will have difficulty maintaining effective commercialization of YUPELRI in the hospital setting, which would adversely affect our business and financial results, and the condition and the price of our securities could fall.
Our ability to succeed in the future depends on our ability to demonstrate and maintain a competitive advantage with respect to our approach to the discovery, development and commercialization of medicines. Our objective is to develop and commercialize new small molecule medicines with superior efficacy, convenience, tolerability and/or safety.
Our ability to succeed in the future depends on our ability to demonstrate and maintain a competitive advantage with respect to our approach to the development and commercialization of medicines. Our objective is to develop and commercialize new small molecule medicines with superior efficacy, convenience, tolerability and/or safety.
In the US, numerous federal and state laws, and regulations, including state data breach notification laws, state health information and/or genetic privacy laws, and federal and state consumer protection laws (e.g., Section 5 of the FTC Act), govern the collection, use, disclosure, and protection of health related and other personal information.
In the US, numerous federal and state laws, and regulations, including state data breach notification laws, state health information and/or genetic privacy laws, and federal and state consumer protection laws (e.g., Section 5 of the FTC Act and the Health Breach Notification Rule), govern the collection, use, disclosure, and protection of health related and other personal information.
The Budget Control Act of 2011, among other things, and in concert with subsequent legislation, has resulted in aggregate reductions to Medicare payments to providers of, on average, 2% per fiscal year through 2031.
The Budget Control Act of 2011, among other things, and in concert with subsequent legislation, has resulted in aggregate reductions to Medicare payments to providers of, on average, 2% per fiscal year through 2031(sequestration).
Examples of such adverse developments include, but are not limited to: ● disappointing or lower than expected sales of TRELEGY; ​ ● the emergence of new closed triple or other alternative therapies or any developments regarding competitive therapies, including comparative price or efficacy of competitive therapies; ​ ● disputes between any of Royalty Pharma, GSK, Innoviva and us; ​ ● GSK deciding to modify, delay or halt the TRELEGY program; ​ ● any safety, efficacy or other concerns regarding the TRELEGY program; or ​ ● any particular FDA requirements or changes in FDA policy or guidance regarding the TRELEGY program or any particular regulatory requirements in other jurisdictions or changes in the policies or guidance adopted by foreign regulatory authorities. ​ 29 Table of Contents ​ We do not control the commercialization of TRELEGY; accordingly, our receipt of Milestone Payments and receipt of the value we currently anticipate from the Outer Years Royalty will depend on, among other factors, GSK’s ability to further commercialize TRELEGY.
Examples of such adverse developments include, but are not limited to: ● disappointing or lower than expected sales of TRELEGY; ​ ● the emergence of new closed triple or other alternative therapies or any developments regarding competitive therapies, including comparative price or efficacy of competitive therapies; ​ ● disputes between any of Royalty Pharma, GSK, Innoviva and us; ​ ● GSK deciding to modify, delay or halt the TRELEGY program; ​ ● any safety, efficacy or other concerns regarding the TRELEGY program; or ​ ● any particular FDA requirements or changes in FDA policy or guidance regarding the TRELEGY program or any particular regulatory requirements in other jurisdictions or changes in the policies or guidance adopted by foreign regulatory authorities. ​ We do not control the commercialization of TRELEGY; accordingly, our receipt of Milestone Payments and receipt of the value we currently anticipate from the Outer Years Royalty will depend on, among other factors, GSK’s ability to further commercialize TRELEGY.
The Restructuring announced in September 2021, and completed in the third quarter of 2022, and the additional headcount reductions announced in February 2023, may make retention of our current personnel both more important and more challenging.
The corporate restructuring announced in September 2021 and completed in the third quarter of 2022, and the additional headcount reductions announced in February 2023, may make retention of our current personnel both more important and more challenging.
We are incorporated in the Cayman Islands, maintain subsidiaries in the Cayman Islands (until December 2020), the US, the UK and Ireland, and effective July 1, 2015, we migrated our tax residency from the Cayman Islands to Ireland.
We are incorporated in the Cayman Islands, maintain subsidiaries in the Cayman Islands (until December 2020), the US, and Ireland, and effective July 1, 2015, we migrated our tax residency from the Cayman Islands to Ireland.
However, based on English authorities, which would in all likelihood be of persuasive authority and be applied by a court in the Cayman Islands, exceptions to the foregoing principle apply in circumstances in which: ● a company is acting, or proposing to act, illegally or beyond the scope of its authority; ​ 49 Table of Contents ● the act complained of, although not beyond the scope of the authority, could be effected if duly authorized by more than the number of votes which have actually been obtained; or ​ ● those who control the company are perpetrating a “fraud on the minority.” ​ A shareholder may have a direct right of action against the company where the individual rights of that shareholder have been infringed or are about to be infringed.
However, based on English authorities, which would in all likelihood be of persuasive authority and be applied by a court in the Cayman Islands, exceptions to the foregoing principle apply in circumstances in which: ● a company is acting, or proposing to act, illegally or beyond the scope of its authority; ​ ● the act complained of, although not beyond the scope of the authority, could be effected if duly authorized by more than the number of votes which have actually been obtained; or ​ ● those who control the company are perpetrating a “fraud on the minority.” ​ A shareholder may have a direct right of action against the company where the individual rights of that shareholder have been infringed or are about to be infringed.
While our YUPELRI operations have been profitable on a brand basis since the third quarter of 2020, we will continue to incur costs and expenses associated with the commercialization of YUPELRI in the US, including the maintenance of an independent sales and marketing organization with appropriate technical expertise, a medical affairs presence and consultant support, and post-marketing studies.
While our YUPELRI operations have been profitable on a brand basis since the third quarter of 2020, we will continue to incur costs and expenses associated with the commercialization of YUPELRI in the US, including the maintenance of an independent sales and marketing organization with appropriate technical expertise, and a medical affairs presence and consultant support.
We rely heavily on these parties for execution of our non-clinical and clinical studies, and control only certain aspects of their activities. Nevertheless, we are responsible for ensuring that our clinical studies are conducted in accordance with good clinical, laboratory and manufacturing practices (“GXPs”) and other regulations as required by the FDA and foreign regulatory authorities, and the applicable protocol.
We rely heavily on these parties for execution of our non-clinical and clinical studies, and control only certain aspects of their activities. Nevertheless, we are responsible for ensuring that our clinical studies are conducted in accordance with good clinical, laboratory and manufacturing practices (“GXPs”) and other standards as required by the FDA and foreign regulatory authorities, and the applicable protocol.
Any failure to maintain regulatory approval will materially limit the ability to commercialize a product or any future product candidates and if we fail to comply with FDA regulations and requirements, the FDA could potentially take a number of enforcement actions against us, including the issuance of untitled letters, warning letters, preventing the introduction or delivery of the product into interstate commerce in the US, misbranding charges, product seizures, injunctions, and civil monetary penalties, which would materially and adversely affect our business and financial condition and may cause the price of our securities to fall.
Any failure to maintain regulatory approval will materially limit the ability to commercialize a product or any future product candidates and if we fail to comply with FDA regulations and requirements, the FDA could potentially 27 Table of Contents take a number of enforcement actions against us, including the issuance of untitled letters, warning letters, preventing the introduction or delivery of the product into interstate commerce in the US, misbranding charges, product seizures, injunctions, and civil monetary penalties, which would materially and adversely affect our business and financial condition and may cause the price of our securities to fall.
Changes to date, including reverse-hybrid mismatch and interest limitation rules, are not expected to have a material impact on the Company’s tax position. In April 2020, we became aware of a withholding tax regulation that could be interpreted to apply to certain of our previous intra-group transactions.
Changes to date, including reverse-hybrid mismatch and interest limitation rules, are not expected to have a material impact on our tax position. In April 2020, we became aware of a withholding tax regulation that could be interpreted to apply to certain of our previous intra-group transactions.
If our operations are found to be in violation of any of these laws or any other governmental regulations that may apply to us, we may be subject to significant civil, criminal and administrative penalties, damages, fines, disgorgement, exclusion from government funded healthcare programs, such as Medicare and Medicaid in the US and similar programs outside the US, contractual damages, diminished profits and future earnings, and the curtailment or restructuring of our operations, any of which could adversely affect our ability to operate our business and our financial results.
If our operations are found to be in violation of any of these laws or any other governmental regulations that may apply to us, we may be subject to significant civil, criminal and administrative penalties, damages, fines, disgorgement, exclusion from government funded 46 Table of Contents healthcare programs, such as Medicare and Medicaid in the US and similar programs outside the US, contractual damages, diminished profits and future earnings, and the curtailment or restructuring of our operations, any of which could adversely affect our ability to operate our business and our financial results.
In addition, our product candidates may have undesirable side effects or other unexpected characteristics that could cause us or regulatory authorities to interrupt, delay or halt clinical trials and could result in a more restricted label or the delay or denial of regulatory approval by regulatory authorities.
In addition, our product candidate may have undesirable side effects or other unexpected characteristics that could cause us or regulatory authorities to interrupt, delay or halt clinical trials and could result in a more restricted label or the delay or denial of regulatory approval by regulatory authorities.
Based upon our assets and income during the course of 2014, we believe that our Company and one of our Company’s wholly-owned subsidiaries, Theravance Biopharma R&D, Inc. was a PFIC for 2014. Based upon our assets and income from 2015 through 2023, we do not believe that our Company is a PFIC since 2015.
Based upon our assets and income during the course of 2014, we believe that our company and one of our company’s wholly-owned subsidiaries, Theravance Biopharma R&D, Inc. was a PFIC for 2014. Based upon our assets and income from 2015 through 2024, we do not believe that our company is a PFIC since 2015.
Under Section 703 of the National Defense 42 Table of Contents Authorization Act for FY 2008, the manufacturer is required to pay quarterly rebates to DoD on utilization of its innovator products that are dispensed through DoD’s Tricare network pharmacies to Tricare beneficiaries.
Under Section 703 of the National Defense 43 Table of Contents Authorization Act for FY 2008, the manufacturer is required to pay quarterly rebates to DoD on utilization of its innovator products that are dispensed through DoD’s Tricare network pharmacies to Tricare beneficiaries.
The following are some of the factors that may have a significant effect on the market price of our ordinary shares: ● any adverse developments or results or perceived adverse developments or results with respect to YUPELRI, including without limitation, lower than expected sales of YUPELRI, difficulties or delays encountered with regard to the FDA or other regulatory authorities in this program or any indication from clinical or non-clinical studies that YUPELRI is not safe or efficacious; ​ ● any adverse developments or results or perceived adverse developments or results with respect to TRELEGY; ​ ● any adverse developments or results or perceived adverse developments or results with respect to our clinical development programs, including, without limitation, any delays in development in these programs, any halting of development in these programs, any difficulties or delays encountered with regard 46 Table of Contents to the FDA or other regulatory authorities in these programs, or any indication from clinical or non-clinical studies that the compounds in such programs are not safe or efficacious; ​ ● any announcements of developments with, or comments by, the FDA or other regulatory authorities with respect to products we or our partners have under development, are manufacturing or have commercialized; ​ ● any adverse developments or disagreements or perceived adverse developments or disagreements with respect to our relationship with Royalty Pharma, or the relationship of Royalty Pharma and GSK; ​ ● any adverse developments or perceived adverse developments with respect to our relationship with any of our research, development, or commercialization partners, including, without limitation, disagreements that may arise between us and any of those partners; ​ ● any adverse developments or perceived adverse developments in our programs with respect to partnering efforts or otherwise; ​ ● announcements of patent issuances or denials, technological innovations or new commercial products by us or our competitors; ​ ● publicity regarding actual or potential study results or the outcome of regulatory review relating to products under development by us, our partners, or our competitors; ​ ● regulatory developments in the US and foreign countries; ​ ● announcements with respect to governmental or private insurer reimbursement policies; ​ ● announcements of equity or debt financings; ​ ● possible impairment charges on non-marketable equity securities; ​ ● economic and other external factors beyond our control, such as the COVID-19 pandemic and fluctuations in interest rates; ​ ● loss of key personnel; ​ ● likelihood of our ordinary shares to be more sensitive to changes in sales volume, market fluctuations and events or perceived events with respect to our business due to our small public float; ​ ● low public market trading volumes for our ordinary shares; ​ ● the sale of large concentrations of our shares to third parties, which may be more likely to occur due to the concentration of ownership of our shares, such as what we experienced when our then-largest shareholder divested its holdings in 2019; ​ ● developments or disputes as to patent or other proprietary rights; ​ ● approval or introduction of competing products and technologies; ​ ● results of clinical trials; ​ ● failures or unexpected delays in timelines for our potential products in development, including the obtaining of regulatory approvals; ​ 47 Table of Contents ● delays in manufacturing adversely affecting clinical or commercial operations; ​ ● fluctuations in our operating results; ​ ● market reaction to announcements by other biotechnology or pharmaceutical companies; ​ ● initiation, termination, or modification of agreements with our collaborators or disputes or disagreements with collaborators; ​ ● litigation or the threat of litigation; ​ ● public concern as to the safety of product candidates or medicines developed by us; and ​ ● comments and expectations of results made by securities analysts or investors. ​ If any of these factors causes us to fail to meet the expectations of securities analysts or investors, or if adverse conditions prevail or are perceived to prevail with respect to our business, the price of the ordinary shares would likely drop significantly.
The following are some of the factors that may have a significant effect on the market price of our ordinary shares: ● any adverse developments or results or perceived adverse developments or results with respect to YUPELRI, including without limitation, lower than expected sales of or revenues from YUPELRI, 47 Table of Contents difficulties or delays encountered with regard to the FDA or other regulatory authorities in this program or any indication from clinical or non-clinical studies that YUPELRI is not safe or efficacious; ​ ● any adverse developments or results or perceived adverse developments or results with respect to TRELEGY, including our Ongoing Economic Interest; ​ ● any adverse developments or results or perceived adverse developments or results with respect to our clinical development programs, including, without limitation, any delays in development in these programs, any halting of development in these programs, any difficulties or delays encountered with regard to the FDA or other regulatory authorities in these programs, or any indication from clinical or non-clinical studies that the compounds in such programs are not safe or efficacious; ​ ● any announcements of developments with, or comments by, the FDA or other regulatory authorities with respect to products we or our partners have under development, are manufacturing or have commercialized; ​ ● any adverse developments or disagreements or perceived adverse developments or disagreements with respect to our relationship with Royalty Pharma, or the relationship of Royalty Pharma and GSK; ​ ● any adverse developments or perceived adverse developments with respect to our relationship with any of our research, development, or commercialization partners, including, without limitation, disagreements that may arise between us and any of those partners; ​ ● any adverse developments or perceived adverse developments in our programs with respect to partnering efforts or otherwise; ​ ● announcements of patent issuances or denials, technological innovations or new commercial products by us or our competitors; ​ ● publicity regarding actual or potential study results or the outcome of regulatory review relating to products under development by us, our partners, or our competitors; ​ ● regulatory developments in the US and foreign countries; ​ ● announcements with respect to governmental or private insurer reimbursement policies; ​ ● announcements of equity or debt financings; ​ ● possible impairment charges on non-marketable equity securities; ​ ● economic and other external factors beyond our control, such as health emergencies, tax regimes, foreign policy, and fluctuations in interest rates; ​ ● loss of key personnel; ​ ● likelihood of our ordinary shares to be more sensitive to changes in sales volume, market fluctuations and events or perceived events with respect to our business due to our small public float; ​ ● low public market trading volumes for our ordinary shares; ​ ● the sale of large concentrations of our shares to third-parties, which may be more likely to occur due to the concentration of ownership of our shares, such as what we experienced when our then-largest shareholder divested its holdings in 2019; ​ 48 Table of Contents ● developments or disputes as to patent or other proprietary rights; ​ ● approval or introduction of competing products and technologies; ​ ● results of clinical trials; ​ ● failures or unexpected delays in timelines for our potential products in development, including the obtaining of regulatory approvals; ​ ● delays in manufacturing adversely affecting clinical or commercial operations; ​ ● fluctuations in our operating results; ​ ● market reaction to announcements by other biotechnology or pharmaceutical companies; ​ ● initiation, termination, or modification of agreements with our collaborators or disputes or disagreements with collaborators; ​ ● litigation or the threat of litigation; ​ ● public concern as to the safety of product candidates or medicines developed by us; and ​ ● comments and expectations of results made by securities analysts or investors. ​ If any of these factors causes us to fail to meet the expectations of securities analysts or investors, or if adverse conditions prevail or are perceived to prevail with respect to our business, the price of the ordinary shares would likely drop significantly.
The completion of clinical studies for our product candidate may be delayed and programs may be terminated due to many factors, including, but not limited to: ● lack of efficacy of product candidate during clinical studies; ​ ● adverse events, safety issues or side effects (or perceived adverse developments or results) relating to the product candidate or its formulation into medicines; ​ ● unfavorable study data or unfavorable interpretations of data among the FDA and foreign regulatory authorities; ​ ● insufficient capital to continue our development program; ​ ● inability to enter into partnering arrangements relating to the development and commercialization of our program and product candidate or partner decisions not to maintain a partnership with us; ​ ● delays in patient enrollment and variability in the number and types of patients available for clinical studies; ​ ● competitive clinical trials; ​ ● our inability or the inability of our collaborators or licensees to manufacture or obtain from third parties materials sufficient for use in non-clinical and clinical studies; ​ ● governmental or regulatory delays or suspensions of the conduct of the clinical trials and changes in regulatory requirements, policy and guidelines; ​ ● challenges related to the COVID-19 pandemic, including with recruitment and/or progressing patients through studies; ​ ● failure of any partners to advance product candidates through clinical development; 22 Table of Contents ​ ● difficulty in maintaining contact with patients after treatment, resulting in incomplete data; ​ ● varying regulatory requirements or interpretations of data among the FDA and foreign regulatory authorities; ​ ● new clinical trial regulations in the European Union; and ​ ● a disturbance where we or our collaborative partners are enrolling patients in clinical trials, such as a pandemic, terrorist activities or war, political unrest or a natural disaster. ​ Any adverse developments or results or perceived adverse developments or results with respect to our clinical program including, without limitation, any delays in development in our program, any halting of development in our program, any difficulties or delays encountered with regard to the FDA or other third country regulatory authorities with respect to our program, or any indication from clinical or non-clinical studies that the compounds in our program are not safe, efficacious or sufficiently differentiated from those of our competitors, could have a material adverse effect on our business and cause the price of our securities to fall.
The completion of clinical studies for our product candidate may be delayed and programs may be terminated due to many factors, including, but not limited to: ● lack of efficacy of product candidate during clinical studies; ​ ● adverse events, safety issues or side effects (or perceived adverse developments or results) relating to the product candidate or its formulation into medicines; ​ ● unfavorable study data or unfavorable interpretations of data among the FDA and foreign regulatory authorities; ​ ● insufficient capital to continue our development program; ​ ● inability to enter into partnering arrangements relating to the development and commercialization of our program and product candidate or partner decisions not to maintain a partnership with us; ​ ● delays in patient enrollment and variability in the number and types of patients available for clinical studies; ​ ● competitive clinical trials; ​ ● our inability or the inability of our collaborators or licensees to manufacture or obtain from third-parties materials sufficient for use in non-clinical and clinical studies; ​ 22 Table of Contents ● governmental or regulatory delays or suspensions of the conduct of the clinical trials and changes in regulatory requirements, policy and guidelines; ​ ● challenges with recruitment and/or progressing patients through studies; ​ ● failure of any partners to advance product candidates through clinical development; ​ ● incomplete data from clinical trials; ​ ● varying regulatory requirements or interpretations of data among the FDA and foreign regulatory authorities; ​ ● new clinical trial regulations in the European Union; and ​ ● a disturbance where we or our collaborative partners are enrolling patients in clinical trials, such as a pandemic, terrorist activities or war, political unrest or a natural disaster. ​ Any adverse developments or results or perceived adverse developments or results with respect to our clinical program including, without limitation, any delays in our development program, any halting of development in our program, any difficulties or delays encountered with regard to the FDA or other third country regulatory authorities with respect to our program, or any indication from clinical or non-clinical studies that the compounds in our program are not safe, efficacious or sufficiently differentiated from those of our competitors, could have a material adverse effect on our business and cause the price of our securities to fall.
For as long as we continue to be a smaller reporting company, we may choose to take advantage of exemptions from various 50 Table of Contents reporting requirements applicable to other public companies that are not smaller reporting companies, including, but not limited to, reduced disclosure obligations regarding executive compensation in our periodic reports and proxy statements and only being required to provide two years of audited financial statements in annual reports.
For as long as we continue to be a smaller reporting company, we may choose to take advantage of exemptions from various reporting requirements applicable to other public companies that are not smaller reporting companies, including, but not limited to, reduced disclosure obligations regarding executive compensation in our periodic reports and proxy statements and only being required to provide two years of audited financial statements in annual reports.
If these companies are found not to infringe one or more of our patents or the litigation results in one or more of our patents being invalidated, the generic companies may be able to launch their products prior to the expiration of the patents, which range from 2028 to 2039.
If these companies are found not to infringe one or more of our patents or the litigation results in one or more of our patents being invalidated, the generic companies may be able to launch their products prior to the expiration of the patents, which range from 2026 to 2039.
In most cases, the Company will be the proper plaintiff in any claim based on a breach of duty owed to it, and a claim against (for example) our officers or directors usually may not be brought by a shareholder.
In most cases, we will be the proper plaintiff in any claim based on a breach of duty owed to it, and a claim against (for example) our officers or directors usually may not be brought by a shareholder.
Irenic may continue to make and/or other activist shareholders may make such public communications in the future. ​ In the event of such shareholder activism – particularly with respect to matters which our board of directors, in exercising their fiduciary duties, disagree with or have determined not to pursue – our business could be adversely affected because responding to such actions by activist shareholders can be costly and time-consuming, disruptive to our operations and divert the attention of management, our board of directors and our employees, and our ability to execute our strategic plan could also be impaired as a result.
Nevertheless, Irenic may continue to make and/or other activist shareholders may make such public communications in the future. ​ 49 Table of Contents In the event of such shareholder activism – particularly with respect to matters which our board of directors, in exercising their fiduciary duties, disagree with or have determined not to pursue – our business could be adversely affected because responding to such actions by activist shareholders can be costly and time-consuming, disruptive to our operations and divert the attention of management, our board of directors and our employees, and our ability to execute our strategic plan could also be impaired as a result.
These shareholders could control the outcome of actions taken by us that require shareholder approval, including a transaction in which shareholders might receive a premium over the prevailing market price for their shares. 48 Table of Contents Certain provisions in our constitutional and other documents may discourage our acquisition by a third-party, which could limit your opportunity to sell shares at a premium.
These shareholders could control the outcome of actions taken by us that require shareholder approval, including a transaction in which shareholders might receive a premium over the prevailing market price for their shares. Certain provisions in our constitutional and other documents may discourage our acquisition by a third-party, which could limit your opportunity to sell shares at a premium.
Accordingly, our Ongoing Economic Interest involves a number of risks and uncertainties, including: ● GSK’s ability to have an adequate supply of TRELEGY product; ​ ● ongoing compliance by GSK or its suppliers with the FDA’s current Good Manufacturing Practice; ​ ● compliance with other applicable FDA and other regulatory requirements in the US or other foreign jurisdictions, including those described elsewhere in this report; ​ ● competition, whether from current competitors or new products developed by others in the future; ​ ● claims relating to intellectual property; ​ ● any future disruptions in GSK’s business which would affect its ability to commercialize TRELEGY, including, disruptions due to the COVID-19 pandemic; ​ ● the ability of TRELEGY to achieve wider acceptance among physicians, patients, third-party payors, or the medical community in general; ​ ● global economic conditions; and ​ ● any of the other risks relating to commercialization of TRELEGY. ​ These risks and uncertainties could materially impact the amount and timing of future Milestone Payments and Outer Years Royalty, which could have a material adverse effect on our future revenues, other financial results and our financial position and cause the price of our securities to fall.
Accordingly, our Ongoing Economic Interest involves a number of risks and uncertainties, including: ● GSK’s ability to have an adequate supply of TRELEGY product; ​ ● ongoing compliance by GSK or its suppliers with the FDA’s current Good Manufacturing Practice; ​ ● compliance with other applicable FDA and other regulatory requirements in the US or other foreign jurisdictions, including those described elsewhere in this report; ​ ● competition, whether from current competitors or new products developed by others in the future; ​ ● claims relating to intellectual property; ​ ● any future disruptions in GSK’s business which would affect its ability to commercialize TRELEGY; 30 Table of Contents ​ ● the ability of TRELEGY to achieve wider acceptance among physicians, patients, third-party payors, or the medical community in general; ​ ● global economic conditions; and ​ ● any of the other risks relating to commercialization of TRELEGY. ​ These risks and uncertainties could materially impact the amount and timing of future Milestone Payments and Outer Years Royalty, which could have a material adverse effect on our future revenues, other financial results and our financial position and cause the price of our securities to fall.
In addition, we may suffer damages as a result of civil (class action) claims in response to security breaches. Although we have security and fraud prevention measures in place, we have been subject to immaterial payment fraud activity.
In addition, we may suffer damages as a result of civil claims, including potential class action claims, in response to security breaches. Although we have security and fraud prevention measures in place, we have been subject to immaterial payment fraud activity.
The Patient Protection and Affordable Care Act, as amended (the “Healthcare Reform Act”), contains a number of provisions that impact our business and operations, including those governing enrollment in federal healthcare programs, reimbursement changes, benefits for patients within a coverage gap in the Medicare Part D prescription drug program (commonly known as the “donut hole”; the coverage gap will be eliminated effective 2025 under the Inflation Reduction Act and will be replaced with a new manufacturer discount program), rules regarding prescription drug benefits under the health insurance exchanges, changes to the Medicare Drug Rebate program, expansion of the Public Health Service Act’s 340B drug pricing program, fraud and abuse and enforcement.
The Patient Protection and Affordable Care Act, as amended (the “Healthcare Reform Act”), contains a number of provisions that impact our business and operations, including those governing enrollment in federal healthcare programs, reimbursement changes, benefits for patients within a coverage gap in the Medicare Part D prescription drug program (commonly known as the “donut hole”; the coverage gap was eliminated effective 2025 under the Inflation Reduction Act of 2022 (the “IRA”) and was replaced with a new manufacturer discount program), rules regarding prescription drug benefits under the health insurance exchanges, changes to the Medicare Drug Rebate program, expansion of the Public Health Service Act’s 340B drug pricing program, fraud and abuse and enforcement.
With regard to transfer of personal data, the GDPR restricts the ability of companies to transfer personal data from the EU to the U.S. and other countries, which may incur compliance costs for implementing lawful transfer mechanisms, conducting data transfer impact assessments, and implementing additional measures where necessary to ensure that personal data transferred are adequately protected in a manner essentially equivalent to the EU.
With regard to transfer of personal data, the GDPR restricts the ability of companies to transfer personal data from the EU to the US and other countries, which may incur compliance costs for implementing lawful transfer mechanisms, conducting data transfer impact assessments, and implementing additional measures where necessary to ensure that personal data transferred are adequately protected in a manner essentially equivalent to the EU.
There is a single source of supply for our product candidates and for YUPELRI, and our business will be harmed if any of these single-source manufacturers are not able to satisfy demand and alternative sources are not available.
There is a single source of supply for our product candidate and for YUPELRI, and our business will be harmed if any of these single-source manufacturers are not able to satisfy demand and alternative sources are not available.
Sequestration is currently set at 2% and will increase to 2.25% for the first half of fiscal year 2030, to 3% for the second half of fiscal year 2030, and to 4% for the remainder of the sequestration period that lasts through the first six months of fiscal year 2031.
Sequestration is currently set at 2% and will increase to 2.25% for the first half of fiscal year 2030, to 3% for the second half of fiscal year 2030, and to 4% for the remainder of the sequestration period that lasts through the first half of fiscal year 2031.
HIPAA also prohibits knowingly and willfully falsifying, concealing, or covering up a material fact or making any materially false, fictitious or fraudulent statement or representation, or making or using any false writing or document knowing the same to contain 44 Table of Contents any materially false fictitious or fraudulent statement or entry in connection with the delivery of or payment for healthcare benefits, items or services.
HIPAA also prohibits knowingly and willfully falsifying, concealing, or covering up a material fact or making any materially false, fictitious or fraudulent statement or representation, or making or using any false writing or document knowing the same to contain any materially false fictitious or fraudulent statement or entry in connection with the delivery of or payment for healthcare benefits, items or services.
If we fail to retain our qualified personnel or replace them when they leave, we may be unable to continue our development and commercialization activities and the price of our securities could fall. 30 Table of Contents ​ Our business and operations would suffer in the event of significant disruptions of information technology systems or security breaches.
If we fail to retain our qualified personnel or replace them when they leave, we may be unable to continue our development and commercialization activities, and the price of our securities could fall. ​ Our business and operations would suffer in the event of significant disruptions of information technology systems or security breaches.
Any challenge to the intellectual property protection of a late-stage development or commercial-stage asset, particularly those of TRELEGY, could harm our business and cause the price of our securities to fall. 37 Table of Contents Product liability and other lawsuits could divert our resources, result in substantial liabilities and reduce the commercial potential of our medicines.
Any challenge to the intellectual property protection of a late-stage development or commercial-stage asset, particularly those of TRELEGY, could harm our business and cause the price of our securities to fall. Product liability and other lawsuits could divert our resources, result in substantial liabilities and reduce the commercial potential of our medicines.
These laws, regulations, additional requirements and changes in interpretation could cause non-approval or further delays in the FDA’s or other regulatory authorities’ review and approval of our and our collaborative partners’ 23 Table of Contents product candidates, which would materially harm our business and financial condition and could cause the price of our securities to fall.
These laws, regulations, additional requirements and changes in interpretation could cause non-approval or further delays in the FDA’s or other regulatory authorities’ review and approval of our and our collaborative partners’ product candidates, which would materially harm our business and financial condition and could cause the price of our securities to fall.
If we lose key management, sales or scientific personnel, or if we fail to attract and retain key employees, our ability to discover and develop our product candidates and commercialize our products will be impaired.
If we lose key management, sales, clinical development or scientific personnel, or if we fail to attract and retain key employees, our ability to discover and develop our product candidates and commercialize our products will be impaired.
The Bipartisan Budget Act of 2018, among other things, amended the Healthcare Reform Act to increase the point-of-sale discounts that manufacturers must agree to offer under the Medicare Part D coverage discount program from 50% to 70% off negotiated prices of applicable brand drugs to eligible beneficiaries during their coverage gap period, as a condition for the manufacturer’s outpatient drugs to be covered under Medicare Part D.
The Bipartisan Budget Act of 2018, among other things, amended the Healthcare Reform Act to increase the point-of-sale discounts that manufacturers must agree to offer under the Medicare Part D coverage discount program from 50% to 70% off negotiated prices of applicable brand drugs to eligible beneficiaries during their coverage gap period, as a condition for the manufacturer’s outpatient drugs to be covered under Medicare Part D, through January 1, 2024.
We expect that any medicines that we commercialize with or without our collaborative partners will compete with existing or future market-leading medicines. Many of our current and potential competitors have substantially greater financial, technical and personnel resources than we have. In addition, many of these competitors have significantly greater commercial infrastructures than we have.
We expect that any medicines that we commercialize with or without our collaborative partners will compete with existing or future market-leading medicines. 25 Table of Contents Many of our current and potential competitors have substantially greater financial, technical and personnel resources than we have. In addition, many of these competitors have significantly greater commercial infrastructures than we have.
In addition, manufactures must submit to the VA quarterly and annual “non-federal average manufacturer price” (“Non-FAMP”) calculations for each NDC-11 of their innovator drugs.
In addition, manufacturers must submit to the VA quarterly and annual “non-federal average manufacturer price” (“Non-FAMP”) calculations for each NDC-11 of their innovator drugs.
Our future effective tax rate could be affected by changes in our mix 34 Table of Contents of earnings in countries with differing statutory tax rates, changes in valuation of our deferred tax assets and liabilities, or changes in tax laws or their interpretation, including possible US tax reform and contemplated changes in other countries of long-standing tax principles.
Our future effective tax rate could be affected by changes in our mix of earnings in countries with differing statutory tax rates, changes in valuation of our deferred tax assets and liabilities, or changes in tax laws or their interpretation, including possible US tax reform and contemplated changes in other countries of long-standing tax principles.
Our inability to successfully collaborate with third parties would increase our development costs and may cause us to choose not to continue development of certain product candidates, would limit the likelihood of successful commercialization of 28 Table of Contents some of our product candidates, may cause us not to continue commercialization of our authorized products and could cause the price of our securities to fall.
Our inability to successfully collaborate with third-parties would increase our development costs and may cause us to choose not to continue development of certain product candidates, would limit the likelihood of successful commercialization of some of our product candidates, may cause us not to continue commercialization of our authorized products and could cause the price of our securities to fall.
These risks include, but are not limited to, the inherent difficulty in selecting the right drug and drug target and avoiding unwanted side effects, as well as unanticipated problems relating to product development, testing, enrollment, obtaining regulatory approvals, maintaining regulatory compliance, manufacturing, competition and costs and expenses that may exceed current estimates.
These risks include, but are not limited to, the inherent difficulty in selecting the right drug and drug target and avoiding unwanted side effects, as well as unanticipated problems relating to product development, 24 Table of Contents testing, enrollment, obtaining regulatory approvals, maintaining regulatory compliance, manufacturing, competition and costs and expenses that may exceed current estimates.
Because of the potential for large monetary exposure, healthcare and pharmaceutical companies often resolve allegations without admissions of liability for significant and material amounts to avoid the uncertainty of treble damages and per claim penalties that may be awarded in litigation proceedings.
Because of the potential for large monetary exposure, healthcare and pharmaceutical companies often resolve allegations for significant and material amounts to avoid the uncertainty of treble damages and per claim penalties that may be awarded in litigation proceedings.
As of February 28, 2024, we have settled litigation with some of the generic applicants, and pursuant to individual agreements, we granted these companies a royalty-free, non-exclusive, non-sublicensable, non-transferable license to manufacture and market their respective generic versions of YUPELRI inhalation solution in the US on or after the licensed launch date of April 23, 2039, subject to certain exceptions as is customary in these type of 27 Table of Contents agreements.
As of February 28, 2025, we have settled litigation with some of the generic applicants, and pursuant to individual agreements, we granted these companies a royalty-free, non-exclusive, non-sublicensable, non-transferable license to manufacture and market their respective generic versions of YUPELRI inhalation solution in the US on or after the licensed launch date of April 23, 2039, subject to certain exceptions as is customary in these type of agreements.
Although we have security measures in place, our internal information technology systems and those of our CROs and other service providers, including cloud based and hosted applications, data and services, may be vulnerable to service interruptions and security breaches from inadvertent or intentional actions by our employees, service providers and/or business partners, from cyber-attacks by malicious third parties, including but not limited to those involving malware and ransomware, which can disrupt operations significantly, and/or from, natural disasters, terrorism, war and telecommunication and electrical failures.
Although we have security measures in place, our internal information technology systems and those of our CROs, other third-parties that are important to how we operate and monitor our business, and other service providers, including cloud-based and hosted applications, data and services, may be vulnerable to service interruptions and security breaches from inadvertent or intentional actions by our employees, service providers and/or business partners, from cyber-attacks by malicious third-parties, including but not limited to those involving malware and ransomware, which can disrupt operations significantly, and/or from, natural disasters, terrorism, war and telecommunication and electrical failures.
For example, while we have not been directly or indirectly materially impacted, manufacturers and warehousing suppliers are periodically impacted by natural disasters, accidents, labor disputes, labor shortages, regulatory actions, public healthy emergencies and geopolitical factors.
For example, while we have not been directly or indirectly materially impacted, manufacturers, warehousing suppliers, and shipping suppliers are periodically impacted by natural disasters, accidents, labor disputes, labor shortages, regulatory actions, public health emergencies and geopolitical factors.
In addition, if we raise funds through the 33 Table of Contents issuance of additional equity, whether through private placements or public offerings, such an issuance would dilute ownership of our current shareholders that do not participate in the issuance.
In addition, if we raise funds through the issuance of additional equity, whether through private placements or public offerings, such an issuance would dilute ownership of our current shareholders that do not participate in the issuance.
Our arrangements with third-party payors and customers expose us to broadly applicable fraud and abuse and other healthcare laws and regulations that may constrain the business or financial arrangements through which we market, sell 43 Table of Contents and distribute any products for which we have obtained or may obtain marketing approval.
Our arrangements with third-party payors and customers expose us to broadly applicable fraud and abuse and other healthcare laws and regulations that may constrain the business or financial arrangements through which we market, sell and distribute any products for which we have obtained or may obtain marketing approval.
Therefore, you may have more difficulty in protecting your interests than would shareholders of a corporation incorporated in a jurisdiction in the US, due to the different nature of Cayman Islands law in this area.
Therefore, you may have more 50 Table of Contents difficulty in protecting your interests than would shareholders of a corporation incorporated in a jurisdiction in the US, due to the different nature of Cayman Islands law in this area.
In addition, in order to market our medicines in foreign jurisdictions, we or our collaborative partners must obtain separate regulatory approvals in each country. The approval procedure varies among countries and can involve additional testing, and the time required to obtain approval may differ from that required to obtain FDA approval.
In addition, in order to market our medicines in foreign jurisdictions, we or our collaborative partners must obtain separate regulatory approvals in each country. The approval procedure varies among countries and can involve 23 Table of Contents additional testing, and the time required to obtain approval may differ from that required to obtain FDA approval.
We may continue to incur net losses over the next several years due to expenditures relating to the development of our current product candidate, which we are advancing into and through 20 Table of Contents later stage clinical studies without a partner and which we may prepare to commercialize.
We may continue to incur net losses over the next several years due to expenditures relating to the development of our current product candidate, which we are advancing through later stage clinical studies without a 20 Table of Contents partner and which we are preparing to potentially commercialize.
We evaluate commercial strategy on a product by product basis either to engage pharmaceutical or other healthcare companies with an existing sales and marketing organization and distribution system to market, sell and distribute our products or to commercialize a product ourselves.
We evaluate commercial strategy on a product-by-product basis either to engage pharmaceutical 28 Table of Contents or other healthcare companies with an existing sales and marketing organization and distribution system to market, sell and distribute our products or to commercialize a product ourselves.
There can be no assurance that our Phase 3 study for ampreloxetine will be completed on the timeline we expect or at all, that the CYPRESS study will meet its endpoints, or that ampreloxetine will ultimately be found to be safe and effective.
There can be no assurance that our Phase 3 CYPRESS study for ampreloxetine will be completed on the timeline we expect or at all, that data from the Phase 3 study for ampreloxetine will be read out on the timeline we expect or at all, that the study will meet its endpoints, or that ampreloxetine will ultimately be found to be safe and effective.
In addition, perceived uncertainties as to our future direction, strategy, or leadership created as a consequence of activist shareholders may result in the loss of potential business opportunities, harm our ability to attract new or retain existing investors, customers, directors, employees, collaborators or other partners, harm or impair our ability to accrue patients to clinical trials because of concerns the study may be disrupted, disrupt relationships with us, and the market price of our ordinary shares could also experience periods of increased volatility as a result. ​ Concentration of ownership will limit your ability to influence corporate matters.
In addition, perceived uncertainties as to our future direction, strategy, or leadership created as a consequence of activist shareholders may result in the loss of potential business opportunities, harm our ability to attract new or retain existing investors, customers, directors, employees, collaborators or other partners, harm or impair our ability to accrue patients to clinical trials because of concerns the study may be disrupted, disrupt relationships with us, and the market price of our ordinary shares could also experience periods of increased volatility as a result.
Although we are not directly subject to HIPAA, we could be 38 Table of Contents subject to criminal penalties if we knowingly receive individually identifiable health information maintained by a HIPAA covered entity in a manner that is not authorized or permitted by HIPAA.
Although we are not directly subject to HIPAA, we could be subject to criminal penalties if we knowingly receive individually identifiable health information maintained by a HIPAA covered entity in a manner that is not authorized or permitted by HIPAA.
The FDA, and equivalent authorities in third countries, enforces GXPs and other regulations through periodic inspections of trial sponsors, clinical research organizations (“CROs”), principal investigators and trial sites.
The FDA, and equivalent authorities in other countries, enforce GXPs and other regulations through periodic inspections of trial sponsors, clinical research organizations (“CROs”), principal investigators and trial sites.
As part of these resolutions, Companies may enter into corporate integrity agreements with the government, which may impose substantial costs on companies to ensure compliance.
As part of these resolutions, Companies may enter into corporate integrity agreements with the government, which may impose substantial costs on 45 Table of Contents companies to ensure compliance.
Clinical studies involving our product candidates may reveal that those candidates are ineffective, inferior to existing approved medicines, unacceptably toxic, or that they have other unacceptable side effects. In addition, the results of preclinical studies do not necessarily predict clinical success, and larger and later-stage clinical studies may not produce the same results as earlier-stage clinical studies.
Clinical studies involving our product candidate may reveal that it is ineffective, inferior to existing approved medicines, unacceptably toxic, or that they have other unacceptable side effects. In addition, the results of preclinical studies do not necessarily predict clinical success, and larger and later-stage clinical studies may not produce the same results as earlier-stage clinical studies.
The continuing efforts of the government, insurance companies, managed care organizations and other payors of health care costs to contain or reduce costs of health care may adversely affect us, our collaboration partners, or those commercializing products with respect to which we have an economic interest or right to receive royalties in regard to one or more of the following: ● the ability to set and collect a price believed to be reasonable for products; ​ ● the ability to generate revenues and achieve profitability; and ​ ● the availability of capital. ​ The pricing and reimbursement environment for products may change in the future and become more challenging due to, among other reasons, policies advanced by the presidential administration, federal agencies, new healthcare legislation passed by Congress or fiscal challenges faced by all levels of government health administration authorities.
The efforts of the government, including as a result of shifting policy priorities of the US presidential administration, insurance companies, managed care organizations and other payors of health care costs, and distributors to contain or reduce costs that they or patients are charged may adversely affect us, our collaboration partners, or those commercializing products with respect to which we have an economic interest or right to receive royalties in regard to one or more of the following: ● the ability to set and collect a price believed to be reasonable for products; ​ ● the ability to generate revenues and achieve profitability; and ​ ● the availability of capital. ​ The pricing and reimbursement environment for products may change in the future and become more challenging due to, among other reasons, policies advanced by the presidential administration, federal agencies, new healthcare legislation passed by Congress or fiscal challenges faced by all levels of government health administration authorities.
Further, future government shutdowns, including as a result of the US failing to raise the debt ceiling, could impact our ability to access the public markets and obtain necessary capital in order to properly capitalize and continue our operations.
Further, future government shutdowns and/or cuts to federal budgets or personnel, including as a result of the US failing to raise the debt ceiling, could impact our ability to access the public markets and obtain necessary capital in order to properly capitalize and continue our operations.
In addition, as of December 31, 2023, we had cash, cash equivalents and marketable securities of $102.4 million, which do not reflect our repurchase of $0.4 million of our ordinary shares during January 2024 under our share repurchase program. ​ Our future capital needs depend on many factors, including: ● support and investments in YUPELRI, including funding our commercialization strategies and post marketing clinical studies; ​ ● the scope, duration, expenditures, and technical obstacles associated with our ampreloxetine program, including preparing for potential product approvals of ampreloxetine and its potential commercialization; ​ ● the occurrence of events triggering Royalty Pharma’s obligations to make Milestone Payments to us; ​ ● the outcome of potential licensing or partnering transactions, if any; ​ ● responding to competitive pressures and competing technological developments; ​ ● the extent of our proprietary patent position in any approved products and our product candidates; ​ ● our facilities expenses, which will vary depending on the time and terms of any facility lease or sublease we may enter into, and other operating expenses; ​ ● the scope and extent of the sales and marketing efforts, including our independent sales and marketing organization and medical affairs team; ​ ● litigation, potential litigation and other contingencies; and ​ ● the regulatory approval process for our product candidates.
In addition, as of December 31, 2024, we had cash, cash equivalents and marketable securities of approximately $88.4 million. ​ Our future capital needs depend on many factors, including: ● support and investments in YUPELRI, including funding our commercialization strategies and post marketing clinical studies; ​ ● the scope, duration, expenditures, and technical obstacles associated with our ampreloxetine program, including preparing for potential product approvals of ampreloxetine and its potential commercialization; ​ ● the occurrence of events triggering Royalty Pharma’s obligations to make Milestone Payments to us; ​ ● the outcome of potential licensing or partnering transactions, if any; ​ ● responding to competitive pressures and competing technological developments; ​ ● the extent of our proprietary patent position in any approved products and our product candidates; ​ ● our facilities expenses, which will vary depending on the time and terms of any facility lease or sublease we may enter into, and other operating expenses; ​ ● the scope and extent of the sales and marketing efforts, including our independent sales and marketing organization and medical affairs team; ​ 33 Table of Contents ● litigation, potential litigation and other contingencies; and ​ ● the regulatory approval process for our product candidates.
Data importers must also expend resources in analyzing their ability to comply with transfer obligations, including implementing new safeguards 39 Table of Contents and controls to further protect personal data.
Data importers must also expend resources in analyzing their ability to comply with transfer obligations, including implementing new safeguards and controls to further protect personal data.
For any of our product candidates that receive regulatory approval in the future and are not covered by our current collaboration agreements, we will need a partner in order to commercialize such products unless we establish independent sales, marketing and distribution capabilities with appropriate technical expertise and supporting infrastructure.
For any product candidate that receives regulatory approval in the future and is not covered by our current collaboration agreements, we will need a partner in order to commercialize such products unless we establish independent sales, marketing and distribution capabilities with appropriate technical expertise and supporting infrastructure.
The status of patents in the biotechnology and pharmaceutical field involves complex legal and scientific questions and is very uncertain. As of December 31, 2023, we owned a total of 176 issued US patents and 1,002 granted foreign patents, as well as additional pending US and foreign patent applications.
The status of patents in the biotechnology and pharmaceutical field involves complex legal and scientific questions and is very uncertain. As of December 31, 2024, we owned a total of 177 issued US patents and 1,070 granted foreign patents, as well as additional pending US and foreign patent applications.
Our commitment of resources to the continued development of ampreloxetine and YUPELRI will require ongoing funding, and we expect our sales and marketing expenditures to increase in 2024 as we prepare for the potential commercial launch of ampreloxetine.
Our commitment of resources to the continued development of ampreloxetine and YUPELRI will require ongoing funding, and we expect our sales, marketing, and medical affairs expenditures may increase in 2025 as we prepare for the potential commercial launch of ampreloxetine.
While we are generating revenues and income from sales of YUPELRI, our economic and royalty interests, and payments under collaboration agreements, we may not generate significant profit from our operations in the near future. We could fail to meet our revenue expectations.
While we generate revenues and income from sales of YUPELRI and our economic and royalty interests, we may not generate significant profit from our operations in the near future. We could fail to meet our revenue expectations.
We are not aware of any other paragraph IV notifications with respect to products in which we have an economic interest or right to receive royalties.
Based on publicly available information, we are not aware of any other paragraph IV notifications with respect to other products in which we have an economic interest or right to receive royalties.
For example, a US federal government shutdown or budget sequestration, such as ones that occurred during 2013, 2018, and 2019, may result in significant reductions to the FDA’s budget, employees, and operations, which may lead to slower response times and longer review periods, potentially affecting our ability to progress development of our product candidates or obtain regulatory approval for our product candidates.
For example, a US federal government budget cuts, shutdown or budget sequestration, such as ones that occurred during 2013, 2018, and 2019, or actions by the current US presidential administration in 2025 to limit federal agency budgets and/or personnel, may result in significant reductions to the FDA’s budget, employees, and operations, which may lead to slower response times and longer review periods, potentially affecting our ability to progress development of our product candidates or obtain regulatory approval for our product candidates.
Beginning in 2022, applicable manufacturers also will be required to report information regarding payments and transfers of value provided to physician assistants, nurse practitioners, clinical nurse specialists, certified nurse anesthetists, and certified nurse-midwives.
Applicable manufacturers are also required to report information regarding payments and transfers of value provided to physician assistants, nurse practitioners, clinical nurse specialists, certified nurse anesthetists, and certified nurse-midwives.
Our operating expenses also will increase if, among other things: ● any earlier stage potential products move into and through later-stage clinical development, which is generally more expensive than early stage development; ● we pursue clinical development of our potential or current products in new indications; ​ ● our clinical trials become more complicated or need to be extended due to other external factors; ​ ● we increase the number of patents we are prosecuting or maintaining or otherwise expend additional resources on patent prosecution or defense or patent litigation; or ● we acquire or in-license additional technologies, product candidates, products or businesses.
Our operating expenses also will increase if, among other things: ● we pursue clinical development of our potential or current products in new indications; ​ ● our clinical trials become more complicated or need to be extended due to other factors; ​ ● we increase the number of patents we are prosecuting or maintaining or otherwise expend additional resources on patent prosecution or defense or patent litigation; or ● we acquire or in-license additional technologies, product candidates, products or businesses.

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changeIn general, we seek to address cybersecurity risks through a comprehensive cross-functional approach that is focused on preserving the confidentiality, security, and availability of the information that we collect and store by identifying, preventing, and mitigating cybersecurity threats and effectively responding to cybersecurity incidents when they occur. ​ Our cybersecurity program includes the following key elements: ​ ● Collaborative Approach We have implemented a comprehensive cross-functional approach to identifying, preventing, and mitigating cybersecurity threats and incidents, while also implementing controls and procedures that provide for the prompt escalation of certain cybersecurity incidents so that decisions regarding the public disclosure and reporting of such incidents can be made by management in a timely manner. ​ ● Technical Safeguards We deploy technical safeguards that are designed to protect our information systems from cybersecurity threats, including firewalls, intrusion prevention and detection systems, anti-malware functionality, and access controls, which are evaluated and improved through vulnerability assessments and cybersecurity threat intelligence. ​ ● Incident Response and Recovery Planning We have established and maintain comprehensive incident response and recovery plans that address our response to a cybersecurity incident, and such plans are tested and evaluated on a regular basis. ​ ● Third-Party Risk Management 51 Table of Contents We maintain a comprehensive risk-based approach to identifying and overseeing cybersecurity risks presented by third parties, including vendors, service providers, and other external users of our systems, as well as the systems of third parties that could adversely impact our business in the event of a cybersecurity incident affecting those third-party systems. ​ ● Education and Awareness We provide regular mandatory training for employees regarding cybersecurity threats as a means to equip our employees with effective tools and education to address cybersecurity threats and to communicate our evolving information security policies, standards, processes, and practices. ​ Governance One of the key functions of our board of directors is informed oversight of our ERM, including risks from cybersecurity threats.
Biggest changeIn general, we seek to address cybersecurity risks through a comprehensive cross-functional approach that is focused on preserving the confidentiality, security, and availability of the information that we collect and store by identifying, preventing, and mitigating cybersecurity threats and effectively responding to cybersecurity incidents when they occur. ​ 52 Table of Contents Our cybersecurity program includes the following key elements: ​ ● Collaborative Approach We have implemented a comprehensive cross-functional approach to identifying, preventing, and mitigating cybersecurity threats and incidents, while also implementing controls and procedures that provide for the prompt escalation of certain cybersecurity incidents so that decisions regarding the public disclosure and reporting of such incidents can be made by management in a timely manner. ​ ● Technical Safeguards We deploy technical safeguards that are designed to protect our information systems from cybersecurity threats, including firewalls, intrusion prevention and detection systems, anti-malware functionality, and access controls, which are evaluated and improved through vulnerability assessments and cybersecurity threat intelligence. ​ ● Incident Response and Recovery Planning We have established and maintain comprehensive incident response and recovery plans that address our response to a cybersecurity incident, and such plans are tested and evaluated on a regular basis. ​ ● Third-Party Risk Management We maintain a comprehensive risk-based approach to identifying and overseeing cybersecurity risks presented by third-parties, including vendors, service providers, and other external users of our systems, as well as the systems of third-parties that could adversely impact our business in the event of a cybersecurity incident affecting those third-party systems. ​ ● Education and Awareness We provide regular mandatory training for employees regarding cybersecurity threats as a means to equip our employees with effective tools and education to address cybersecurity threats and to communicate our evolving information security policies, standards, processes, and practices . ​ Governance One of the key functions of our board of directors is informed oversight of our ERM, including risks from cybersecurity threats.
Working collaboratively across our Company, the IOS Team implements and maintains a program designed to protect our information systems from cybersecurity threats and to promptly respond to any cybersecurity incidents in accordance with our incident response and recovery plans. ​
Working collaboratively across our Company, the IOS Team implements and maintains a program designed to protect our information systems from cybersecurity threats and to promptly respond to any cybersecurity incidents in accordance with our incident response and recovery plans. 53 Table of Contents

Item 2. Properties

Properties — owned and leased real estate

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Biggest changeITEM 2. PROPERTIES Our principal physical properties in the US consist of approximately 162,000 square feet of office and laboratory space leased in two buildings in South San Francisco, California. Of this office and laboratory space, approximately 99,000 square feet was subleased as of December 31, 2023.
Biggest changeITEM 2. PROPERTIES Our principal physical properties in the US consist of approximately 162,000 square feet of office and laboratory space leased in two buildings in South San Francisco, California. Of this office and laboratory space, approximately 118,000 square feet was subleased to subtenants as of December 31, 2024.
The South San Francisco lease expires in May 2030, and our subleases expire in September 2028 and May 2030. Our Irish subsidiary operates from approximately 700 square feet of leased office space in Dublin, Ireland, that expires in May 2024.
The South San Francisco lease expires in May 2030, and our subleases expire between September 2028 and May 2030. Our Irish subsidiary operates from approximately 700 square feet of leased office space in Dublin, Ireland, that expires in May 2026.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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Biggest changeAs required by law, the settlements are subject to review by the U.S. Department of Justice and the Federal Trade Commission. The patent litigation against the three remaining generic companies, along with certain affiliates, remains pending. ​ Please also see “Item 1, Business – Patents and Proprietary Rights -- Patent Term Restoration, Regulatory Exclusivities, and Hatch-Waxman Litigation” for additional information.
Biggest changeDistrict Court for the District of New Jersey during August 2024 against the three remaining generic companies. This suit has been consolidated with the action described above. 54 Table of Contents ​ Please also see “Item 1. Business – Patents and Proprietary Rights -- Patent Term Restoration, Regulatory Exclusivities, and Hatch-Waxman Litigation” for additional information.
We are seeking a permanent injunction to prevent the generic companies from introducing a generic version of YUPELRI that would infringe its patents. As a result of this lawsuit, a stay of approval through May 2026 has been imposed by the FDA on the generic companies’ ANDAs pending any adverse court decision.
We are seeking a permanent injunction to prevent the generic companies from introducing a generic version of YUPELRI that would infringe our patents. As a result of this lawsuit, a stay of approval through May 2026 has been imposed by the FDA on the generic companies’ ANDAs pending any adverse court decision.
Additional patents 52 Table of Contents covering YUPELRI, granted on July 4, 2023 and January 2, 2024, were subsequently listed in FDA’s Orange Book. We filed additional patent infringement suits in the U.S. District Court for the District of New Jersey during August 2023 and January 2024. These suits have been consolidated with the above action.
Additional patents covering YUPELRI, granted on July 4, 2023 and January 2, 2024, were subsequently listed in FDA’s Orange Book. We filed additional patent infringement suits in the U.S. District Court for the District of New Jersey during August 2023 and January 2024. These suits have been consolidated with the above action.
In addition, this litigation and the related risks are described in greater detail under the risk factor “ Litigation to protect or defend our intellectual property or third party claims of intellectual property infringement would require us to divert resources and may prevent or delay our drug discovery and development efforts ” of this Annual Report on Form 10-K.
In addition, this litigation and the related risks are described in greater detail under the risk factor “ Litigation to protect or defend our intellectual property or third-party claims of intellectual property infringement will require us to divert resources and may prevent or delay our drug development and commercialization efforts ” of this Annual Report on Form 10-K. ITEM 4.
Further, the original complaint was amended during December 2023 to include certain patents not listed in the Orange Book. ​ As of February 28, 2024, we have settled all litigation with Accord Healthcare, Inc.; Lupin Pharmaceuticals, Inc.; Orbicular Pharmaceutical Technologies Private Limited; and Teva Pharmaceuticals, Inc. pursuant to individual agreements in which we granted these companies a royalty-free, non-exclusive, non-sublicensable, non-transferable license to manufacture and market their respective generic versions of YUPELRI inhalation solution in the US on or after the licensed launch date of April 23, 2039, subject to certain exceptions as is customary in these type of agreements.
The complaint alleges that by filing the ANDA, the subsequent ANDA filer has infringed certain of our Orange Book listed patents. ​ As of February 28, 2025, we have settled all litigation with Accord Healthcare, Inc.; Lupin Pharmaceuticals, Inc.; Orbicular Pharmaceutical Technologies Private Limited; Qilu Pharmaceuticals Co., Ltd.; and Teva Pharmaceuticals, Inc. pursuant to individual agreements in which we granted these companies a royalty-free, non-exclusive, non-sublicensable, non-transferable license to manufacture and market their respective generic versions of YUPELRI inhalation solution in the U.S. on or after the licensed launch date of April 23, 2039, subject to certain exceptions as is customary in these type of agreements.
ITEM 4. MINE SAFETY DISCLOSURES Not applicable. ​ ​ ​ 53 Table of Contents PART II ​
MINE SAFETY DISCLOSURES Not applicable. ​ ​ ​ 55 Table of Contents PART II ​
Added
Further, the original complaint was amended during December 2023 to include certain patents not listed in the Orange Book. ​ In May 2024, we received notice from Qilu Pharmaceuticals Co., Ltd. (“subsequent ANDA filer”), that it had filed with the FDA an ANDA for a generic version of YUPELRI.
Added
The notice from the subsequent ANDA filer included a paragraph IV certification with respect to certain of our patents listed in FDA’s Orange Book for YUPELRI. The asserted patents relate generally to polymorphic forms of and a method of treatment using YUPELRI. In June 2024, we filed a patent infringement suit against the subsequent ANDA filer in the U.S.
Added
District Court for the Eastern District of Pennsylvania.
Added
As required by law, the settlements are subject to review by the U.S. Department of Justice and the Federal Trade Commission.
Added
The patent litigation against the three remaining generic companies, along with certain affiliates, remains pending. ​ A further method of treatment patent, with an expiration date of August 2039, was granted on July 30, 2024 and was listed in the Orange Book. We filed an additional patent infringement suit in the U.S.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest change(2) Gives effect to the $75.0 million increase in the size of our capital return program announced on February 27, 2023. ​ 54 Table of Contents Equity Compensation Plans The following table provides certain information with respect to all of our equity compensation plans in effect as of December 31, 2023: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Number of Securities ​ ​ ​ ​ ​ ​ ​ Remaining Available ​ ​ Number of Securities ​ ​ ​ ​ for Future Issuance ​ ​ to be Issued Upon ​ Weighted-Average ​ Under Equity ​ ​ Exercise of ​ Exercise Price of ​ Compensation Plans ​ ​ Outstanding Options, ​ Outstanding Options, ​ (excluding securities Plan Category Warrants and Rights (a) Warrants and Rights reflected in column (a)) Options 2,232,136 ​ $ 18.75 5,339,942 Restricted shares 3,995,750 ​ n/a n/a Employee share purchase plan n/a ​ n/a 2,453,502 Equity compensation plans approved by security holders 6,227,886 ​ $ 18.75 7,793,444 ​ ​ ​ ​ ​ ​ ​ ​ Options 73,740 ​ $ 15.64 346,281 Equity compensation plans not approved by security holders 73,740 ​ $ 15.64 346,281 Total 6,301,626 ​ $ 18.65 8,139,725 ​ We have three equity compensation plans — our 2013 Equity Incentive Plan (the “2013 EIP”), as amended, our 2013 Employee Share Purchase Plan (the “2013 ESPP”), and our 2014 New Employee Equity Incentive Plan (the “2014 NEEIP”).
Biggest changeOur board of directors will determine the form of any future return of excess capital to shareholders. ​ Equity Compensation Plans The following table provides certain information with respect to all of our equity compensation plans as of December 31, 2024: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Number of Securities ​ ​ ​ ​ ​ ​ ​ Remaining Available ​ ​ Number of Securities ​ ​ ​ ​ for Future Issuance ​ ​ to be Issued Upon ​ Weighted-Average ​ Under Equity ​ ​ Exercise of ​ Exercise Price of ​ Compensation Plans ​ ​ Outstanding Options, ​ Outstanding Options, ​ (excluding securities Plan Category Warrants and Rights (a) Warrants and Rights reflected in column (a)) Options 1,829,168 ​ $ 15.53 4,426,322 Restricted share units 3,955,487 ​ n/a n/a Employee share purchase plan (suspended as of December 31, 2024) n/a ​ n/a 3,447,685 Equity compensation plans approved by security holders 5,784,655 ​ $ 15.53 7,874,007 ​ ​ ​ ​ ​ ​ ​ ​ Options 67,740 ​ $ 15.52 — Equity compensation plans not approved by security holders 67,740 ​ $ 15.52 — Total 5,852,395 ​ $ 15.53 7,874,007 ​ During 2024, we had three equity compensation plans — our 2013 Equity Incentive Plan (the “2013 EIP”), as amended, our 2013 Employee Share Purchase Plan (the “2013 ESPP”), and our 2014 New Employee Equity Incentive Plan (the “2014 NEEIP”).
Unless an employee’s termination of service is due to disability or death, upon termination of service, any unexercised vested options will generally be forfeited at the end of three months or the expiration of the option, whichever is earlier. ​ At the our Annual General Meeting of Shareholders on May 2, 2023, shareholders approved an amendment and restatement of the 2013 EIP to effect the following material changes to the existing plan (i) extend the term of the 2013 EIP by an additional ten years to February 14, 2033; (ii) eliminate the provision that provided for automatic annual increases in the number of shares available for issuance under the 2013 EIP; (iii) reduce the number of shares reserved for issuance by 3,808,287 shares; (iv) eliminate our ability to reprice options and share appreciation rights without first obtaining shareholder approval; and (v) remove certain provisions no longer necessary since the repeal of the exemption from the annual deduction limitation imposed by Section 162(m) of the Internal Revenue Code for performance-based compensation. ​ Under the 2013 ESPP, our officers and employees may purchase ordinary shares through payroll deductions at a price equal to 85% of the lower of the fair market value of the ordinary share at the beginning of the offering period or at the end of each applicable purchase period.
Unless an employee’s termination of service is due to disability or death, upon termination of service, any unexercised vested options will generally be forfeited at the end of three months or the expiration of the option, whichever is earlier. ​ At the our Annual General Meeting of Shareholders on May 2, 2023, shareholders approved an amendment and restatement of the 2013 EIP to effect the following material changes to the existing plan (i) extend the term of the 2013 EIP by an additional ten years to February 14, 2033; (ii) eliminate the provision that provided for automatic annual 56 Table of Contents increases in the number of shares available for issuance under the 2013 EIP; (iii) reduce the number of shares reserved for issuance by 3,808,287 shares; (iv) eliminate our ability to reprice options and share appreciation rights without first obtaining shareholder approval; and (v) remove certain provisions no longer necessary since the repeal of the exemption from the annual deduction limitation imposed by Section 162(m) of the Internal Revenue Code for performance-based compensation. ​ Under the 2013 ESPP, our officers and employees may purchase ordinary shares through payroll deductions at a price equal to 85% of the lower of the fair market value of the ordinary share at the beginning of the offering period or at the end of each applicable purchase period.
The ESPP generally provides for consecutive and overlapping offering periods of 24 months in duration, with each offering period generally composed of four consecutive six-month purchase periods. The purchase periods end on either May 15 or November 15. ESPP contributions are limited to a maximum of 15% of an employee’s eligible compensation.
The 2013 ESPP generally provides for consecutive and overlapping offering periods of 24 months in duration, with each offering period generally composed of four consecutive six-month purchase periods. The purchase periods end on either May 15 or November 15. 2013 ESPP contributions are limited to a maximum of 15% of an employee’s eligible compensation.
Organization and Summary of Significant Accounting Policies,” and “Item 8, Note 12. Share-Based Compensation,” to the consolidated financial statements appearing in this Annual Report on Form 10- K. ​ ITEM 6. [RESERVED ] ​ ​ ​ 56 Table of Contents
Note 1. Organization and Summary of Significant Accounting Policies,” and “Item 8. Note 11. Share-Based Compensation,” to the consolidated financial statements appearing in this Annual Report on Form 10- K. ​ ITEM 6. [RESERVED ] ​ ​ ​ 57 Table of Contents
ITEM 5. MARKET FOR THE REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES Our ordinary shares have traded on The Nasdaq Global Market under the symbol “TBPH” since June 3, 2014. As of February 23, 2024, there were 43 shareholders of record of our ordinary shares.
ITEM 5. MARKET FOR THE REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES Our ordinary shares have traded on The Nasdaq Global Market under the symbol “TBPH” since June 3, 2014. As of February 26, 2025, there were 39 shareholders of record of our ordinary shares.
Under the terms of our 2014 NEEIP, options granted to employees generally have a maximum term of 10 years and vest over a four-year period from the date of grant; 25% vest at the end of one year, and 75% vest monthly over the remaining three years. We may grant options with different vesting terms from time to time.
Under the terms of our 2014 NEEIP, options granted to employees generally have a maximum term of 10 years and vest over a four-year period from the date of grant; 25% vest at the end of one year, and 75% vest monthly over the remaining three years.
Options may be granted with an exercise price not less than the fair market value of the ordinary shares on the grant date.
Options were able to be granted with an exercise price not less than the fair market value of the ordinary shares on the grant date.
Our 2013 ESPP also includes a feature that provides for the existing offering period to terminate 55 Table of Contents and for participants in that offering period to automatically be enrolled in a new offering period when the fair market value of an ordinary share at the beginning of a subsequent offering period falls below the fair market value of an ordinary share on the first day of such offering period. ​ The 2014 NEEIP provides for the issuance of share-based awards, including restricted shares, restricted share units, non-qualified options and SARs, to our employees.
Our 2013 ESPP also includes a feature that provides for the existing offering period to terminate and for participants in that offering period to automatically be enrolled in a new offering period when the fair market value of an ordinary share at the beginning of a subsequent offering period falls below the fair market value of an ordinary share on the first day of such offering period.
As many of our ordinary shares are held by brokers and other institutions on behalf of shareholders, we are unable to estimate the total number of underlying shareholders represented by these shareholders of record. ​ Dividend Policy We currently intend to retain any future earnings to finance our pharmaceutical development efforts.
As many of our ordinary shares are held by brokers and other institutions on behalf of shareholders, we are unable to estimate the total number of underlying shareholders represented by these shareholders of record. ​ Dividend Policy We have never declared or paid cash dividends on our ordinary shares.
Unless an employee’s termination of service is due to disability or death, upon termination of service, any unexercised vested options will generally be forfeited at the end of three months or the expiration of the option, whichever is earlier. ​ Additional information regarding share-based compensation is included in “Item 8, Note 1.
We were able to grant options with different vesting terms from time to time. Unless an employee’s termination of service is due to disability or death, upon termination of service, any unexercised vested options will generally be forfeited at the end of three months or the expiration of the option, whichever is earlier.
Removed
We have never declared or paid cash dividends on our ordinary shares and do not intend to declare or pay cash dividends on our ordinary shares in the foreseeable future. ​ Issuer Purchases of Equity Securities On September 19, 2022, we announced that our board of directors had approved a $250.0 million share repurchase program, and on February 27, 2023, we announced that our board of directors had authorized a $75.0 million increase to the capital return program, bringing the total capital return program to $325.0 million.
Added
We currently intend to retain future earnings to finance our ongoing operations. We have committed to return excess capital to shareholders.
Removed
As of December 31, 2023, we had repurchased $324.8 million of shares, and, as of December 31, 2023, we had approximately $0.4 million remaining in the capital return program which was completed in early January 2024. ​ The table below summarizes information about the Company’s purchases of its equity securities registered pursuant to Section 12 of the Exchange Act during the three months ended December 31, 2023.
Added
Effective as of December 31, 2024, the 2013 ESPP has been suspended.
Removed
All shares purchased under the repurchase program were cancelled and ceased to be outstanding. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Maximum Dollar ​ ​ ​ ​ ​ ​ ​ Total Number of ​ ​ Value of Shares ​ ​ ​ ​ ​ ​ Shares Purchased ​ ​ that May Yet Be ​ ​ Total Number ​ Weighted ​ as Part of Publicly ​ ​ Purchased Under the ​ ​ of Shares ​ Average Price ​ Announced Plans ​ ​ Plans or Programs Period Purchased Per Share (1) or Programs ​ ​ (in thousands) October 1, 2023 to October 31, 2023 ​ 1,021,290 ​ $ 9.089 ​ 1,021,290 ​ $ 21,098 (2) ​ November 1, 2023 to November 30, 2023 ​ 1,006,792 ​ ​ 10.099 ​ 1,006,792 ​ ​ 10,931 (2) ​ December 1, 2023 to December 31, 2023 ​ 987,070 ​ ​ 10.880 ​ 987,070 ​ ​ 444 (2) ​ Total ​ 3,015,152 ​ $ 10.013 ​ 3,015,152 ​ ​ ​ ​ ​ (1) The weighted average price paid per ordinary share does not include the cost of commissions.
Added
All offering periods in progress were terminated, and no new offering periods will commence under the 2013 ESPP unless and until approved by our board of directors. ​ The 2014 NEEIP provided for the issuance of share-based awards, including restricted shares, restricted share units, non-qualified options and SARs, to our employees.
Removed
As of January 1 of each year, commencing on January 1, 2015 and ending on (and including) January 1, 2033, the aggregate number of ordinary shares that may be issued under the 2013 ESPP shall automatically increase by a number equal to the least of (i) 1% of the total number of ordinary shares outstanding on December 31 of the prior year; (ii) 857,142 ordinary shares; or (iii) a number of ordinary shares determined by our board of directors.
Added
Pursuant to its terms, the 2014 NEEIP expired in October 2024 upon reaching the end of its 10-year term. As a result, no additional shares will be issued under the 2014 NEEIP, though awards previously granted under the 2014 NEEIP will remain outstanding in accordance with their term. ​ Additional information regarding share-based compensation is included in “Item 8.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

19 edited+19 added−28 removed13 unchanged
Biggest changeSince the inception of the capital return program in September 2022, we successfully returned $325.3 million to our shareholders. ​ Our strategic business plan is subject to significant uncertainties and risks as a result of, among other factors, clinical program outcomes, expenses being higher than anticipated, the sales levels of YUPERLI, whether, when and on what terms we are able to enter into new collaboration arrangements, and the need to satisfy contingent liabilities, including tax, litigation matters and indemnification obligations. ​ Adequacy of cash resources to meet future needs We expect our cash, cash equivalents and marketable securities will be sufficient to fund our operations for at least the next twelve months from the issuance date of our consolidated financial statements based on current operating plans and financial forecasts. ​ Cash Flows Cash flows, as compared to the prior year period, were as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended December 31, ​ ​ ​ (In thousands) 2023 2022 Change Net cash used in operating activities ​ $ (26,997) ​ $ (186,991) ​ $ 159,994 Net cash (used in) provided by investing activities ​ (32,697) ​ 1,154,009 ​ (1,186,706) Net cash used in financing activities ​ (198,933) ​ (758,806) ​ 559,873 ​ Net cash flows used in operating activities Net cash used in operating activities was $27.0 million in 2023, consisting of a net loss of $55.2 million, a net increase in cash resulting from adjustments for non-cash and other reconciling items of $36.5 million and a net decrease in cash resulting from changes in operating assets and liabilities of $8.3 million. ​ Net cash used in operating activities was $187.0 million in 2022, of which $2.4 million was used in continuing operations and $184.6 million was used in discontinued operations, and consisted of net income of $872.1 million, adjustments for non-cash expenses and other reconciling items of ($1,098.8) million, primarily related to the net gain from the sale of our equity interests in TRC, and a net increase in cash resulting from changes in operating assets and liabilities of $39.7 million. ​ Net cash flows (used in) provided by investing activities Net cash used in investing activities was $32.7 million in 2023, consisting primarily of cash outflows from the net purchase and maturities of marketable securities of $31.7 million and cash outflows from the net purchase and sale of property and equipment of $1.0 million. ​ Net cash provided by investing activities was $1,154.0 million in 2022, of which $58.9 million was from continuing operations and $1,095.1 million was from discontinued operations, and consisted primarily of $54.9 million 63 Table of Contents in net cash inflow from the purchase and maturities of marketable securities and $1,095.1 million in net proceeds related to the sale of our equity interests in TRC. ​ Net cash flows used in financing activities Net cash used in financing activities was $198.9 million in 2023, consisting primarily of $197.1 million of cash outflows related to the repurchase of ordinary shares as part of our capital return program. ​ Net cash used in financing activities was $758.8 million in 2022, of which $738.6 million was used in continuing operations and $20.2 million was used in discontinued operations, and consisted primarily of a $128.8 million cash outflow related to the repurchase of ordinary shares, a $631.6 million cash outflow related to the extinguishment of our debt, and a $20.2 million cash outflow related to the debt redemption premium associated with our previous non-recourse 2035 Notes.
Biggest changeThis milestone was associated with certain royalty thresholds that were achieved by Royalty Pharma related to 2024 TRELEGY global net sales. ​ Our strategic business plan is subject to significant uncertainties and risks as a result of, among other factors, clinical program outcomes, expenses being higher than anticipated, the sales levels of YUPERLI, whether, when and on what terms we are able to enter into new collaboration arrangements, and the need to satisfy contingent liabilities, including tax, litigation matters and indemnification obligations. ​ Adequacy of cash resources to meet future needs We expect our cash, cash equivalents and marketable securities will be sufficient to fund our operations for at least the next twelve months from the issuance date of our consolidated financial statements based on current operating plans and financial forecasts. ​ Cash Flows Cash flows, as compared to the prior year period, were as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended December 31, ​ ​ ​ (In thousands) 2024 2023 Change Net cash used in operating activities ​ $ (11,535) ​ $ (26,997) ​ $ 15,462 Net cash provided by (used in) investing activities ​ 12,284 ​ (32,697) ​ 44,981 Net cash used in financing activities ​ (2,497) ​ (198,933) ​ 196,436 ​ Net cash flows used in operating activities Net cash used in operating activities was $11.5 million in 2024, consisting of a net loss of $56.4 million, a net increase in cash resulting from adjustments for non-cash and other reconciling items (e.g., share-based compensation expense) of $24.5 million, and a net increase in cash resulting from changes in operating assets and liabilities of $20.4 million. ​ 63 Table of Contents Net cash used in operating activities was $27.0 million in 2023, consisting of a net loss of $55.2 million, a net increase in cash resulting from adjustments for non-cash and other reconciling items (e.g., share-based compensation expense) of $36.5 million, and a net decrease in cash resulting from changes in operating assets and liabilities of $8.3 million. ​ Net cash flows provided by (used in) investing activities Net cash provided by investing activities was $12.3 million in 2024, consisting primarily of cash inflows from the net purchase and maturities of marketable securities of $14.9 million. ​ Net cash used in investing activities was $32.7 million in 2023, consisting primarily of cash outflows from the net purchase and maturities of marketable securities of $31.7 million and cash outflows from the net purchase and sale of property and equipment of $1.0 million. ​ Net cash flows used in financing activities Net cash used in financing activities was $2.5 million in 2024, consisting primarily of $0.4 million of cash outflows related to the repurchase of ordinary shares as part of completion of our capital return program, $0.5 million of cash inflows related to the sale of shares through our employee share purchase program (“ESPP”) and $2.7 million of cash outflows related to the repurchase of shares to satisfy tax withholding obligations. ​ Net cash used in financing activities was $198.9 million in 2023, consisting primarily of $197.1 million of cash outflows related to the repurchase of ordinary shares as part of our capital return program. ​ Contractual Obligations The table below represents our contractual obligations, including agreements that, while cancelable as of December 31, 2024, we are likely to continue.
The increase was driven primarily by (i) an increase in net sales as YUPELRI continued to increase its share of the long-acting nebulized COPD market in both the hospital and outpatient settings; and (ii) lower costs incurred by Viatris.
The increase was primarily driven by (i) an increase in net sales as YUPELRI continued to increase its share of the long-acting nebulized COPD market in both the hospital and outpatient settings and (ii) lower costs incurred by Viatris.
Organization and Summary of Significant Accounting Policies,” in our consolidated financial statements included in this Annual Report on Form 10-K. ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK As a “smaller reporting company,” as defined by Item 10 of Regulation S-K, we are not required to provide this information. ​
Organization and Summary of Significant Accounting Policies,” in our consolidated financial statements included in this Annual Report on Form 10-K. 64 Table of Contents ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK As a “smaller reporting company,” as defined by Item 10 of Regulation S-K, we are not required to provide this information. ​
Any reimbursement from Viatris attributed to the 65% cost-sharing of our R&D expenses is characterized as a reduction of R&D expense, as we do not consider performing R&D services for reimbursement to be a part of our ordinary operations. ​ In 2023 and 2022, we recognized $57.2 million and $48.6 million, respectively, in revenue from the Viatris collaboration agreement, which represented an increase of 18%.
Any reimbursement from Viatris attributed to the 65% cost-sharing of our R&D expenses is characterized as a reduction of R&D expense, as we do not consider performing R&D services for reimbursement to be a part of our ordinary operations. ​ In 2024 and 2023, we recognized $64.4 million and $57.2 million, respectively, in revenue from the Viatris collaboration agreement, which represented an increase of 13%.
Ampreloxetine, our late-stage investigational once-daily norepinephrine reuptake inhibitor in development for the treatment of symptomatic neurogenic orthostatic hypotension (“nOH”) in patients with Multiple System Atrophy (“MSA”) has the potential to be a first in class therapy effective in treating a constellation of cardinal symptoms in MSA patients. ​ 2023 Significant Developments ​ YUPELRI Sales Growth In 2023, YUPELRI experienced sales growth and reached all-time high yearly net sales and profitability.
Ampreloxetine, our late-stage investigational once-daily norepinephrine reuptake inhibitor in development for the treatment of symptomatic neurogenic orthostatic hypotension (“nOH”) in patients with Multiple System Atrophy (“MSA”) has the potential to be a first in class therapy effective in treating a constellation of cardinal symptoms in MSA patients. ​ Recent Significant Developments ​ YUPELRI Net Sales Growth In 2024, YUPELRI experienced net sales growth and reached launch-to-date highs in annual net sales and brand profitability.
Some of the amounts that are included in this table are based on management’s estimates and assumptions regarding these obligations, including their duration.
Some of the amounts are based on management’s estimates and assumptions regarding these obligations, including their duration.
We budget total R&D expenses on an internal department level basis, and we manage and report our R&D activities across the following four cost categories: ​ 1) Employee-related costs, which include salaries, wages, and benefits; ​ 59 Table of Contents 2) Share-based compensation, which includes expenses associated with our equity plans; ​ 3) External-related costs, which include clinical trial related expenses, other contract research fees, consulting fees, and contract manufacturing fees; and ​ 4) Facilities and other, which include office supplies, depreciation, and other allocated expenses, such as general and administrative support functions, office rent, and insurance. ​ The following table summarizes our R&D expenses incurred, net of any reimbursements from collaboration partners, as compared to the prior year period: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended December 31, ​ Change ​ (In thousands) 2023 2022 $ % Employee-related ​ $ 12,699 ​ $ 17,924 ​ $ (5,225) ​ (29) % Share-based compensation ​ 8,048 ​ 12,888 ​ ​ (4,840) ​ (38) ​ External-related ​ 14,473 ​ 18,200 ​ ​ (3,727) ​ (20) ​ Facilities, depreciation, and other allocated expenses ​ 5,401 ​ 14,380 ​ ​ (8,979) ​ (62) ​ Total research & development ​ $ 40,621 ​ $ 63,392 ​ $ (22,771) ​ (36) % ​ R&D expenses decreased by $22.8 million in 2023, or 36%, compared to 2022.
We budget total R&D expenses on an internal department level basis, and we manage and report our R&D activities across the following four cost categories: ​ 1) Employee-related costs, which include salaries, wages, and benefits; ​ 2) Share-based compensation, which includes expenses associated with our equity plans; ​ 3) External-related costs, which include clinical trial related expenses, other contract research fees, consulting fees, and contract manufacturing fees; and ​ 4) Facilities and other, which include depreciation and other allocated expenses, such as general and administrative support functions, office rent, and insurance. ​ 60 Table of Contents The following table summarizes our R&D expenses incurred, net of any reimbursements from collaboration partners, as compared to the prior year period: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended December 31, ​ Change ​ (In thousands) 2024 2023 $ % Employee-related ​ $ 12,212 ​ $ 12,699 ​ $ (487) ​ (4) % Share-based compensation ​ 5,104 ​ 8,048 ​ ​ (2,944) ​ (37) ​ External-related ​ 17,112 ​ 14,473 ​ ​ 2,639 ​ 18 ​ Facilities, depreciation, and other allocated expenses ​ 3,215 ​ 5,401 ​ ​ (2,186) ​ (40) ​ Total research & development ​ $ 37,643 ​ $ 40,621 ​ $ (2,978) ​ (7) % ​ Total R&D expenses decreased by $3.0 million in 2024, or 7%, compared to 2023.
Through the combined commercialization efforts with our partner Viatris Inc. (“Viatris”), total YUPELRI net sales increased by 9% to $221.0 million in 2023 compared to 2022.
Through the combined commercialization efforts with our partner Viatris Inc. (“Viatris”), total YUPELRI net sales increased by 8% to $238.6 million in 2024 compared to 2023.
Hospital volumes, which we are directly responsible for, grew 46% in 2023 compared to 2022 and was a meaningful contributor to YUPELRI’s overall net sales growth for the year. ​ Initiation of Ampreloxetine New Phase 3 Clinical Study In the first quarter of 2023, we initiated the ampreloxetine new Phase 3 clinical study (CYPRESS) in MSA patients with symptomatic nOH, using the Orthostatic Hypotension Symptom Assessment Scale (“OHSA”) composite score as the primary endpoint.
Hospital volumes, which we are directly responsible for, grew 41% in 2024 compared to 2023 and continued to be a meaningful contributor to YUPELRI’s overall net sales growth for the year. ​ Continued Enrollment in Ampreloxetine Phase 3 Clinical Study We continued to make steady progress with the open-label enrollment of our ampreloxetine Phase 3 clinical study (CYPRESS) in MSA patients with symptomatic nOH, using the Orthostatic Hypotension Symptom Assessment Scale (“OHSA”) composite score as the primary endpoint.
The $3.7 million decrease in external-related expenses was partially offset by increases related to the progression of the ampreloxetine Phase 3 clinical study (CYPRESS) for MSA patients with symptomatic nOH, the completion of the YUPELRI Phase 4 study (PIFR-2), and the close out of discontinued programs. ​ R&D expenses directly attributed to the 2023 Strategic Actions and the restructuring announced in 2021 and completed during the third quarter of 2022 (the “2021 Restructuring”) are included in the Restructuring and Related Expenses section below. ​ Under certain of our collaborative arrangements, we receive partial reimbursement of employee-related costs and external costs, which have been reflected as a reduction of R&D expenses of $5.7 million and $6.7 million for 2023 and 2022, respectively. ​ Selling, General and Administrative Selling, general and administrative (“SG&A”) expenses consist primarily of salaries and benefits, facilities and overhead costs, and other costs related to areas such as legal, finance, information technology, sales and marketing, and medical affairs. ​ SG&A expenses, as compared to the prior year period, were as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended December 31, ​ Change ​ (In thousands) 2023 2022 $ % Selling, general and administrative ​ $ 70,095 ​ $ 67,073 ​ $ 3,022 ​ 5 % ​ In 2023, SG&A expenses increased by $3.0 million compared to 2022 and was primarily due to increases in external-related expenses of $4.9 million and SG&A allocated overhead expenses of $7.4 million.
The increase in external-related expenses was primarily driven by the continued progression of the ampreloxetine Phase 3 clinical study (CYPRESS) for MSA patients with symptomatic nOH and was partially offset by decreases in expenses related to the previously announced close-out of our research programs. ​ Under certain of our collaborative arrangements, we receive partial reimbursement of external costs, which have been reflected as a reduction of R&D expenses of $0.4 million and $5.7 million for 2024 and 2023, respectively. ​ Selling, General and Administrative Selling, general and administrative (“SG&A”) expenses consist primarily of salaries and benefits, facilities and overhead costs, and other costs related to areas such as legal, finance, information technology, sales and marketing, and medical affairs. ​ SG&A expenses, as compared to the prior year period, were as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended December 31, ​ Change ​ (In thousands) 2024 2023 $ % Selling, general and administrative ​ ​ $ 69,174 ​ $ 70,095 ​ $ (921) ​ (1) % ​ Total SG&A expenses were $69.2 million in 2024.
(“Viatris”) records the total net sales of YUPELRI within its own financial statements, our implied 35% YUPELRI revenue, as compared to the prior year period, was as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended December 31, ​ Change ​ (In thousands) 2023 2022 $ % YUPELRI net sales (100% recorded by Viatris) ​ $ 220,962 ​ $ 201,866 ​ $ 19,096 ​ 9 % YUPELRI net sales (Theravance Biopharma implied 35%) ​ ​ 77,337 ​ ​ 70,653 ​ ​ 6,684 ​ 9 ​ ​ Our recognized revenue, as compared to the prior year period, was as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended December 31, ​ Change ​ (In thousands) 2023 2022 ​ $ % Viatris collaboration agreement ​ $ 57,201 ​ $ 48,624 ​ $ 8,577 ​ 18 % Viatris royalties (Non-US) ​ ​ 7 ​ ​ 30 ​ ​ (23) ​ (77) ​ Collaboration revenue ​ ​ 216 ​ ​ 192 ​ ​ 24 ​ 13 ​ Licensing revenue ​ ​ — ​ ​ 2,500 ​ ​ (2,500) ​ NM ​ Total revenue ​ $ 57,424 ​ $ 51,346 ​ $ 6,078 ​ 12 % NM: Not Meaningful We are entitled to a share of US profits and losses (65% to Viatris; 35% to Theravance Biopharma) received in connection with YUPELRI net sales.
(“Viatris”) records the total net sales of YUPELRI within its own financial statements, our implied 35% YUPELRI revenue, as compared to the prior year period, was as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended December 31, ​ Change ​ (In thousands) 2024 2023 $ % YUPELRI net sales (100% recorded by Viatris) ​ $ 238,626 ​ $ 220,962 ​ $ 17,664 ​ 8 % YUPELRI net sales (Theravance Biopharma implied 35%) ​ ​ 83,519 ​ ​ 77,337 ​ ​ 6,182 ​ 8 ​ ​ Our recognized revenue, as compared to the prior year period, was as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended December 31, ​ Change ​ (In thousands) 2024 2023 ​ $ % Viatris collaboration agreement ​ $ 64,381 ​ $ 57,201 ​ $ 7,180 ​ 13 % Viatris royalties (Non-US) ​ ​ — ​ ​ 7 ​ ​ (7) ​ NM ​ Collaboration revenue ​ ​ — ​ ​ 216 ​ ​ (216) ​ NM ​ Total revenues ​ $ 64,381 ​ $ 57,424 ​ $ 6,957 ​ 12 % NM: Not Meaningful We are entitled to a share of US profits and losses (65% to Viatris; 35% to Theravance Biopharma) received in connection with YUPELRI net sales.
We no longer have any long-term debt. ​ Interest Income and Other Income (Expense), net Interest and other income (expense), net, as compared to the prior year period, was as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended December 31, ​ Change ​ (In thousands) 2023 2022 $ % Interest income and other income (expense), net ​ $ 9,116 ​ $ 8,545 ​ $ 571 ​ 7 % ​ Interest income and other income (expense), net, increased slightly by $0.6 million in 2023 compared 2022.
We do not anticipate having any cash interest expense in the foreseeable future. ​ Interest Income and Other Income, net Interest and other income, net, as compared to the prior year period, was as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended December 31, ​ Change ​ (In thousands) 2024 2023 $ % Interest and other income, net ​ $ 4,881 ​ $ 9,116 ​ $ (4,235) ​ (46) % ​ Interest and other income, net, decreased by $4.2 million in 2024 compared to 2023.
YUPELRI continued to be profitable for us on a brand basis, and total YUPELRI net sales recorded by Viatris reached an all-time high for 2023 and for the most recent fourth quarter of $221.0 million and $60.6 million, respectively. ​ Licensing revenue was $2.5 million in 2022 and was related to a non-recurring development milestone payment from Pfizer Inc.
YUPELRI continued to be profitable for us on a brand basis, and total YUPELRI net sales recorded by Viatris reached another all-time high for 2024 and for the most recent fourth quarter of $238.6 million and $66.7 million, respectively. ​ Research and Development Our R&D expenses consist primarily of employee-related costs, external costs, and various allocable expenses.
This amount does not represent any minimum contract termination liabilities related to our existing contracts. ​ Commitments and Contingencies We indemnify our officers and directors for certain events or occurrences, subject to certain limits. W e maintain insurance policies that may limit our exposure, and therefore, we believe the fair value of these indemnification agreements is minimal.
W e maintain insurance policies that may limit our exposure, and therefore, we believe the fair value of these indemnification agreements is minimal. Accordingly, we have not recognized any liabilities relating to these agreements as of December 31, 2024.
To the extent our estimates of the amount and timing of future royalty payments are materially greater or less than previous estimates, we will prospectively adjust the amortization of the contingent liability and effective interest rate. 58 Table of Contents ​ Results of Operations The following tables set forth our results of operations and management’s commentary for the 2023 period compared to the 2022 period. ​ Revenue While Viatris Inc.
To the extent our estimates of the amount and timing of future royalty payments are materially greater or less than previous estimates, we will prospectively adjust the amortization of the contingent liability and effective interest rate. ​ Impairment of Long-Lived Assets We regularly review our long-lived assets, including operating lease assets, to determine whether indicators of impairment may exist.
The income tax expense was primarily attributed to the net gain from the sale of our equity interests in TRC and was partially offset by the release of our valuation allowance on our US federal deferred tax assets. ​ We did not recognize any net income from discontinued operations in 2023. ​ Liquidity and Capital Resources As of December 31, 2023, we had approximately $102.4 million in cash, cash equivalents, and investments in marketable securities (excluding restricted cash) and no long-term debt.
Our income tax for 2024 was primarily attributed to our uncertain tax positions, including interest on historical positions which we began to accrue in the fourth quarter of 2023, and offset by the realization of tax credits. ​ Liquidity and Capital Resources As of December 31, 2024, we had approximately $88.4 million in cash, cash equivalents, and investments in marketable securities (excluding restricted cash) and no long-term debt. ​ In January 2024, we completed our capital return program by repurchasing $0.4 million of our shares.
We recognize any increases in the carrying value of the Contingent Consideration only when such contingent gains are realized. ​ Future Royalty Payment Contingency We treat contingent liabilities related to sale of future royalties as debt financings, amortized under the effective interest method over the estimated life of the related expected royalty stream.
We believe that the accounting policies and estimates discussed below are essential to understanding our operating results and financial condition, as these policies and estimates relate to the more significant areas involving management’s judgments. ​ Future Royalty Payment Contingency We treat contingent liabilities related to sale of future royalties as debt financings, amortized under the effective interest method over the estimated life of the related expected royalty stream.
We do not expect to recognize any additional restructuring and related expenses related to the 2023 Strategic Actions. ​ In 2022, we incurred higher restructuring and related expenses of $12.8 million as a result of the much broader reduction in workforce related to the 2021 Restructuring compared to the smaller reduction in workforce associated with the 2023 Strategic Actions. ​ Interest Expense Interest expense, as compared to the prior year period, was as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended December 31, ​ Change ​ (In thousands) 2023 2022 $ % Ampreloxetine royalty contingency (non-cash) ​ ​ $ (2,350) ​ $ (974) ​ $ (1,376) ​ 141 % 3.25% Convertible senior notes due 2023 ​ ​ ​ — ​ ​ (5,395) ​ ​ 5,395 ​ NM ​ Total interest expense ​ ​ $ (2,350) ​ $ (6,369) ​ $ 4,019 ​ (63) % NM: Not Meaningful Interest expense was $2.4 million in 2023 compared to $6.4 million in 2022.
Cash-related expenses and non-cash related expenses associated with the 2023 strategic actions were $1.2 million and $1.5 million in 2023, respectively. ​ Interest Expense Interest expense, as compared to the prior year period, was as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended December 31, ​ Change ​ (In thousands) ​ 2024 2023 $ % Ampreloxetine royalty contingency (non-cash) ​ $ (2,546) ​ $ (2,350) ​ $ (196) ​ 8 % ​ Interest expense in 2024 and 2023 represented non-cash interest expense associated with $25.0 million received from Royalty Pharma Investments (“Royalty Pharma”) in July 2022 to partially fund our CYPRESS study.
The decrease was across all R&D categories and was primarily driven by our 2023 Strategic Actions announced in February 2023 which included the discontinuation of investment in our research activities.
The restructuring and related expenses of $2.7 million in 2023 were driven by our 2023 strategic actions that included the discontinuation of our research activities, resulting in a 17% reduction in headcount in March 2023 .
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In May 2023, we announced that the FDA granted Orphan Drug Designation status to ampreloxetine for the treatment of symptomatic nOH in patients with MSA.
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Current enrollment is in-line with expectations for completion in mid-2025, with data anticipated to be available approximately six months later. ​ Achievement of $50.0 Million TRELEGY ® Royalty Milestone Payment for 2024 In February 2025, we received a $50.0 million maximum milestone payment from Royalty Pharma Investments associated with the achievement of certain minimum royalty payments related to 2024 TRELEGY global net sales.
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The study is currently enrolling patients with 42 clinical sites open across 11 countries, as of February 26, 2024. ​ Capital Return Program In 2023, we repurchased 18.63 million of our shares on the open market at a weighted average cost of $10.551 per share for an approximate aggregate cost of $196.6 million, excluding fees and expenses.
Added
TRELEGY’s 2024 global net sales of $3.46 billion would exceed the threshold required to achieve $50.0 million of milestones in 2025 (based on $3.41 billion of global net sales) with only 2% growth required to achieve $100.0 million of milestones in 2026 (based on $3.51 billion of global net sales). ​ 58 Table of Contents Formation of Strategic Review Committee In November 2024, the board of directors announced the formation of a Strategic Review Committee composed entirely of independent directors to assess all strategic alternatives to the Company, including those related to YUPELRI, ampreloxetine, and TRELEGY, with the objective of unlocking shareholder value.
Removed
Since the inception of the capital return program in September 2022 through its completion in early January 2024, we repurchased a total of 31.41 57 Table of Contents million shares at a weighted average cost of $10.354 per share for an approximate aggregate cost of $325.3 million which reduced our shares by 37% since the inception of the capital return program. ​ Discontinued Investment in Research In February 2023, we announced that we discontinued our research activities, including the inhaled Janus kinase (JAK) inhibitor program, and prioritized our R&D resources toward the ampreloxetine Phase 3 study and the completion of the YUPELRI Peak Inspiratory Flow Rate (PIFR-2) Phase 4 study.
Added
There can be no assurance that the Company’s strategic review process will result in any transaction. We have not set a timetable for completion of this process, and we do not intend to disclose further developments unless and until we determine that such disclosure is appropriate or necessary. ​ See “ Item 1.
Removed
As a result of halting further investment in research activities, our headcount was reduced by approximately 17% in March 2023.
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If indicators of impairment exist, we perform a test of recoverability by comparing the estimated undiscounted future cash flows expected to result from the use of the asset over its useful life to the carrying value of the long-lived asset.
Removed
We plan to seek a partnership to continue progression of our inhaled JAK inhibitor program. ​ Board Governance Changes In 2023, we appointed three new independent directors reflecting our ongoing commitment to bringing new perspectives and complementary skills to the Company.
Added
If the carrying value of the long-lived asset exceeds such estimated undiscounted cash flows, we would determine the fair value of the long-lived assets using the estimated discounted future cash flow approach. We will recognize an impairment loss for the amount in which the carrying value exceeds the estimated fair value of the long-lived asset.
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In addition, we put forth a proposal to declassify the board of the directors over time which was approved at our May 2023 Annual General Meeting of Shareholders. ​ See “ Item 1.
Added
For year ended December 31, 2024, we recognized a non-cash impairment charge of $4.5 million related to our long-lived assets consisting of operating lease assets and leasehold improvements. ​ 59 Table of Contents Results of Operations The following tables set forth our results of operations and management’s commentary for the 2024 period compared to the 2023 period. ​ Revenue While Viatris Inc.
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We believe that the accounting policies and estimates discussed below are essential to understanding our operating results and financial condition, as these policies and estimates relate to the more significant areas involving management’s judgments. ​ Future Contingent Milestone and Royalty Assets The fair value of consideration received in connection with the sale of Theravance Respiratory Company, LLC (“TRC”) in July 2022 included an estimated $194.2 million in future contingent milestones and royalties that were recorded as a contingent consideration asset (“Contingent Consideration”) on our consolidated balance sheets on the transaction date.
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The decrease was primarily driven by a reduction in share-based compensation of $2.9 million and facilities & other expenses of $2.2 million.
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The Contingent Consideration was initially measured at fair value utilizing a Monte Carlo simulation model to calculate the present value of the risk-adjusted cash flows estimated to be received from the Contingent Consideration. The fair value model involved significant unobservable inputs derived using our estimates. Our estimates were based in part on external data and reflected our judgements and forecasts.
Added
These reductions were primarily attributed to (i) our previously announced 2023 strategic actions which included the discontinuation of investment in our research activities resulting in employee departures and (ii) allocated company-wide cost savings initiatives. ​ The R&D expense decreases discussed above were partially offset by a $2.6 million increase in external-related expenses.
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The primary significant unobservable input was the estimate of forecasted TRELEGY ELLIPTA net revenues which is considered a Level 3 fair value input. We periodically reassess the carrying value of the Contingent Consideration when indicators of impairment are identified, and we will recognize an impairment loss if the carrying value materially exceeds the reassessed fair value.
Added
Excluding share-based compensation expense (“SBC”), total SG&A expenses were $52.9 million and were comprised of $27.2 million of general and administrative (“G&A”) expenses and $25.7 million of selling, marketing & medical affairs (“SM&M”) expenses.
Removed
(“Pfizer”) for the first patient dosed in a Phase 1 clinical trial of the skin-selective pan-JAK inhibitor program. In June 2023, we received notice from Pfizer terminating the Pfizer licensing agreement, effective as of October 7, 2023, at which time the skin-selective pan-JAK inhibitor program was returned to us.
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Total SG&A expenses (excluding SBC) was $53.1 million for the prior year period and were comprised of $31.9 million of G&A expenses and $21.2 million of SM&M expenses. The $4.7 million decrease in G&A expenses (excluding SBC) compared to the prior year period represented a 15% reduction and was primarily due to company-wide cost savings initiatives.
Removed
We did not recognize any licensing revenue in 2023. ​ Research and Development Our R&D expenses consist primarily of employee-related costs, external costs, and various allocable expenses.
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SM&M expenses (excluding SBC) increased by $4.5 million in 2024 compared to the prior year period and was primarily due pre-launch medical affairs and commercialization expenses associated with ampreloxetine and an increase in employee-related expenses. ​ Total SBC related to SG&A expenses was $16.3 million in 2024 compared to $17.0 million in the prior year. ​ 61 Table of Contents Impairment of Long-Lived Assets Impairment of long-lived assets , as compared to the prior year period, was as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended December 31, ​ Change ​ (In thousands) 2024 2023 $ % Impairment of long-lived assets (non-cash) ​ ​ $ 4,513 ​ $ — ​ $ 4,513 ​ NM % NM: Not Meaningful ​ In 2024, we recognized non-cash impairment charges of $4.5 million to impair the carrying value of our operating lease assets associated with our laboratory space and related leasehold improvements located in South San Francisco, California.
Removed
External-related expenses increased by $5.0 million and was primarily attributed to professional and financial advisory services and intellectual property protection services, such as the Hatch Waxman litigation, and the increase in SG&A allocated overhead expenses was driven by the reduction in our research activities which resulted in a larger absorption of such expenses by SG&A.
Added
The laboratory space had been on the sublease market since March 2023.
Removed
Our cost reduction efforts led to decreases in employee-related expenses of $1.2 million, share-based compensation expenses of $2.9 million and facilities/other expenses of $5.1 million which partially offset the increases in external-related and allocated overhead expenses. 60 Table of Contents ​ Share-based compensation expense related to selling, general and administrative expenses was $17.0 million and $19.8 million for 2023 and 2022, respectively. ​ SG&A expenses that were directly attributed to the 2023 Strategic Actions and the 2021 Restructuring are included in the Restructuring and Related Expenses section below.
Added
There were no impairment charges related to our long-lived assets in the prior year period. ​ Restructuring and Related Expenses Restructuring and related expenses, as compared to the prior year period, were as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended December 31, ​ Change ​ (In thousands) 2024 2023 $ % Restructuring and related expenses ​ $ — ​ $ 2,386 ​ $ (2,386) ​ NM % Share-based compensation expense (non-cash) ​ ​ — ​ ​ 357 ​ ​ (357) ​ NM ​ Total restructuring and related expenses ​ $ — ​ $ 2,743 ​ $ (2,743) ​ NM % NM: Not Meaningful There were no restructuring and related expenses recognized in 2024.
Removed
Following our 2023 Strategic Actions, we placed approximately 42,000 square feet of vacant office and laboratory space in South San Francisco on the market for sublease in March 2023.
Added
The restructuring and related expenses were primarily related to one-time severance payments, employee-related separation costs, and the loss on sale of property and equipment .
Removed
As of December 31, 2023, we evaluated the carrying value of our operating lease assets and leasehold improvements associated with the sublease space (approximately $10.9 million) and determined that the carrying amount of these assets was fully recoverable. As a result, we did not recognize an impairment charge in 2023.
Added
The increase in interest expense was primarily due to the compounding of non-cash interest due to Royalty Pharma.
Removed
However, as the sublease market continues to evolve, it is possible that we will need to adjust our assumptions and record an impairment charge (non-cash) in a future period. ​ Restructuring and Related Expenses Restructuring and related expenses, as compared to the prior year period, were as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended December 31, ​ Change ​ (In thousands) 2023 2022 $ % Restructuring and related expenses ​ $ 2,386 ​ $ 5,840 ​ $ (3,454) ​ (59) % Share-based compensation expense (non-cash) ​ ​ 357 ​ ​ 6,998 ​ ​ (6,641) ​ (95) ​ Total restructuring and related expenses ​ $ 2,743 ​ $ 12,838 ​ $ (10,095) ​ (79) % ​ Restructuring and related expenses of $2.7 million in 2023 were driven by the 2023 Strategic Actions and were primarily comprised of one-time R&D expenses related to one-time severance payments, employee-related separation costs, and the loss on sale of property and equipment .
Added
The decrease was primarily due to a reduction in interest income earned on our cash, cash equivalents, and marketable securities driven by 62 Table of Contents a significant reduction in such balances over the past year.
Removed
Cash-related expenses and non-cash related expenses associated with the 2023 Strategic Actions were $1.2 million and $1.5 million in 2023, respectively.
Added
Our cash, cash equivalents, and marketable securities balances were lower in 2024, compared to the prior year, due to the completion of our previously announced $325.3 million capital return program that began in September 2022 and was completed in early January 2024. ​ Provision for Income Tax Expense The provision for income tax expense, as compared to the prior year period, was as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended December 31, ​ Change ​ (In thousands) 2024 2023 $ % Provision for income tax expense ​ $ (11,804) ​ $ (5,924) ​ $ (5,880) ​ 99 % ​ In 2024, we recognized income tax expense of $11.8 million compared to $5.9 million in 2023.
Removed
The $4.0 million decrease in interest expense was due to the retirement of our 3.25% convertible senior notes in 2022. The interest expense in 2023 was non-cash interest expense associated with $25.0 million received from Royalty Pharma in July 2022 to fund the ampreloxetine Phase 3 clinical study (CYPRESS).
Added
Since the inception of the capital return program in September 2022 through its completion in January 2024, we successfully returned $325.3 million to our shareholders. ​ In February 2025, we received a $50.0 million milestone from Royalty Pharma Investments (“Royalty Pharma”), which was the maximum we could have received.
Removed
We do not anticipate having any cash interest expense in the foreseeable future. ​ ​ ​ 61 Table of Contents Loss on Extinguishment of Debt ​ Loss on extinguishment of debt, as compared to the prior year period, was as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended December 31, ​ Change ​ (In thousands) 2023 2022 $ % Loss on extinguishment of debt ​ $ — ​ $ (3,034) ​ $ 3,034 ​ NM % NM: Not Meaningful In 2022, we incurred a $3.0 million loss on the extinguishment of our 3.25% convertible senior notes.
Added
As our estimates and assumptions are inherently subjective, the amount of the obligations that we will pay in future periods may differ from the amounts reflected in the table. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Years (In thousands) Total Within 1 1 to 3 3 to 5 After 5 Facility operating leases ​ $ 62,890 ​ $ 11,218 ​ $ 23,096 ​ $ 23,578 ​ $ 4,998 Purchase obligations (1) ​ 30,559 ​ 20,919 ​ ​ 9,640 ​ ​ — ​ ​ — Total ​ $ 93,449 ​ $ 32,137 ​ $ 32,736 ​ $ 23,578 ​ $ 4,998 ​ (1) This amount does not represent any minimum contract termination liabilities related to our open purchase obligations. ​ Commitments and Contingencies We indemnify our officers and directors for certain events or occurrences, subject to certain limits.
Removed
The $3.0 million loss was comprised of transaction costs related to the extinguishment and the write-off of the remaining debt issuance cost.
Removed
The $0.6 million increase was primarily due to (i) higher interest income related to an increase in investment yields and (ii) higher investment balances resulting from cash proceeds received from the TRELEGY Royalty Transaction in July 2022. ​ Provision for Income Tax Expense – Continuing Operations The provision for income tax expense related to continuing operations, as compared to the prior year period, was as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended December 31, ​ Change ​ (In thousands) 2023 2022 $ % Provision for income tax expense - Continuing operations ​ $ (5,924) ​ $ (9) ​ $ (5,915) ​ NM % NM: Not Meaningful In 2022, the provision for income tax expense was largely attributable to the sale of TRC, which was reported as part of discontinued operations (see discussion below).
Removed
This sale was a non-recurring item, and therefore, all of the provision for income tax expense was recorded in continuing operations in 2023. As a result of the TRC sale in 2022, we released our entire valuation allowance against our federal deferred tax assets as of December 31, 2022.
Removed
In 2023, this resulted in an increased provision for income tax expense as any changes in deferred tax expense or FIN48 positions were no longer sheltered by the valuation allowance. ​ Net Income from Discontinued Operations (After tax) Net income from discontinued operations, after tax, as compared to the prior year period, was as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended December 31, ​ Change ​ (In thousands) 2023 2022 $ % Net income from discontinued operations ​ $ — ​ $ 964,956 ​ $ (964,956) ​ NM % NM: Not Meaningful In 2022, the sale of TRC resulted in (i) income from our investment in TRC; (ii) interest expense related to our Non-Recourse 2035 Notes; and (iii) the net gain from the sale of our equity interests in TRC to be reclassified as net income from discontinued operations for 2022. 62 Table of Contents ​ The $965.0 million in net income from discontinued operations for 2022 was primarily attributed to the $1,141.1 million net realized gain from the sale of our equity interests in TRC.
Removed
This net gain was partially offset by a $24.0 million loss on the extinguishment of our Non-Recourse 2035 Notes and a $179.0 million provision for income tax expense in 2022.
Removed
In January 2024, we repurchased $0.4 million of our shares to complete our capital return program.
Removed
These cash outflows were partially offset by a $24.5 million cash inflow related to the funding of an additional Phase 3 study for the ampreloxetine program. ​ Contractual Obligations In the table below, we set forth our significant contractual obligations, as well as obligations related to contracts that we are likely to continue, regardless of the fact that some were cancelable as of December 31, 2023.
Removed
Because these estimates and assumptions are necessarily subjective, the amount of the obligations that we will pay in future periods may vary from those reflected in the table. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Years (In thousands) Total Within 1 1 to 3 3 to 5 After 5 Facility operating leases ​ $ 66,090 ​ $ 3,897 ​ $ 22,138 ​ $ 23,218 ​ $ 16,837 Purchase obligations (1) ​ 36,507 ​ 24,347 ​ ​ 12,160 ​ ​ — ​ ​ — Total ​ $ 102,597 ​ $ 28,244 ​ $ 34,298 ​ $ 23,218 ​ $ 16,837 ​ (1) Substantially all of this amount was comprised of open purchase orders, as of December 31, 2023, that were issued under existing contracts.
Removed
Accordingly, we have not recognized any liabilities relating to these agreements as of December 31, 2023.

Other TBPH 10-K year-over-year comparisons