Theravance Biopharma, Inc.

Previous wording

YUPELRI (revefenacin) inhalation solution is a once-daily, nebulized long-acting muscarinic antagonist (“LAMA”) approved for the maintenance treatment of COPD in the US. LAMAs are recognized by international COPD treatment guidelines as a cornerstone of maintenance therapy for COPD, regardless of severity of disease. Our market research indicates there is an enduring population of COPD patients in the US that either need or prefer nebulized delivery for maintenance therapy. The stability of revefenacin in both metered dose inhaler and dry powder inhaler

Current wording

YUPELRI (revefenacin) inhalation solution is a once-daily, nebulized long-acting muscarinic antagonist (“LAMA”) approved for the maintenance treatment of COPD in the US. LAMAs are recognized by international COPD treatment guidelines as a cornerstone of maintenance therapy for COPD, regardless of severity of disease. Our market research indicates there is an enduring population of COPD patients in the US that either need or prefer nebulized delivery for maintenance therapy. The stability of revefenacin in both metered dose inhaler and dry powder inhaler (“MDI/DPI”) formulations suggests that revefenacin could also serve as a foundation for novel handheld combination products.

Previous wording

Under the terms of the Viatris Agreement, as amended, as of March 31, 2025, 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. 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:

Current wording

Under the terms of the Viatris Agreement, as amended, as of June 30, 2025, we were eligible to receive from Viatris potential global sales and regulatory 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. 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:

Previous wording

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. 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.

Current wording

In 2019, we granted Viatris exclusive development and commercialization rights to nebulized revefenacin in China and adjacent territories, which include the Hong Kong SAR, the Macau SAR, and Taiwan (collectively, the “China Region”). 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. In June 2024, Viatris completed a registrational filing for YUPELRI in China, and on June 26, 2025, we announced that Viatris had secured regulatory approval from China’s National Medical Products Administration (“NMPA”) for YUPELRI. The regulatory approval

Previous wording

In 2019, we granted Viatris exclusive development and commercialization rights to nebulized revefenacin in China and adjacent territories, which include the Hong Kong SAR, the Macau SAR, and Taiwan (collectively, the “China Region”), and we are eligible to receive low double-digit tiered royalties on net sales of nebulized revefenacin, if approved. 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.

Current wording

triggered a one-time $7.5 million milestone payment from Viatris which we received on July 7, 2025. Viatris is responsible for all aspects of development and commercialization of YUPELRI in the China Region, including pre- and post-launch activities and product registration and all associated costs.

Previous wording

As of March 31, 2025, we 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 $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:

Current wording

As of June 30, 2025, we were also eligible to receive additional potential sales and regulatory milestones of up to $45.0 million related to Viatris’ development and commercialization of nebulized revefenacin in the China Region with $37.5 million associated with YUPELRI monotherapy and $7.5 million associated with achieving regulatory milestones related to future potential combination products. The $37.5 million relates to sales milestones based on achieving certain levels of cumulative net sales in the China Region as follows:

Previous wording

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 first pivotal study (SEQUOIA), a four-week, randomized double-blind, placebo-controlled study, was designed to evaluate the efficacy and safety of ampreloxetine in Parkinson’s disease (“PD”), pure autonomic failure (“PAF”) and MSA patients with symptomatic nOH. The second pivotal study (REDWOOD), a four-month open label study followed by a six-week randomized withdrawal phase was designed to evaluate the durability of the same patient group’s response to ampreloxetine. The protocol for the pivotal studies stipulated an enrollment threshold of 40% MSA patients based on the hypothesis ampreloxetine would work the best in patients with MSA because they have more intact nerves on which ampreloxetine can exert its effect, relative to the other patient types in the study. The third, non-pivotal study (OAK), was a three-and-a-half-year long-term extension study.

Current wording

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 first pivotal study (SEQUOIA), a four-week, randomized double-blind, placebo-controlled study, was designed to evaluate the efficacy and safety of ampreloxetine in Parkinson’s disease (“PD”), pure autonomic failure (“PAF”) and MSA patients with symptomatic nOH. The second pivotal study (REDWOOD), a four-month open label study followed by a six-week randomized withdrawal phase was designed to evaluate the durability of the same patient group’s response to ampreloxetine. The protocol for the pivotal studies stipulated an enrollment threshold of 40% MSA patients based on the hypothesis ampreloxetine would work the best in patients with MSA because they have more intact nerves on which

Previous wording

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. Serious adverse events occurred in two patients

Current wording

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. Serious adverse events occurred in two patients on placebo and four on ampreloxetine, none of which were considered related to the study drug. No deaths were reported, and there was no signal for supine hypertension.

Previous wording

As of March 31, 2025, a total of $150.0 million in potential Milestone Payments remain available to us. 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. Achievement of the $25.0 million or $50.0 milestone in 2025 would require no increase in global net sales over 2024 as the $3.46 billion of global net sales reached in 2024 would exceed the global net sales required to achieve the larger $50.0 million Milestone Payment for 2025.

Current wording

As of June 30, 2025, a total of $150.0 million in potential Milestone Payments remain available to us. 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

Previous wording

With respect to 2026 TRELEGY global net sales, we are eligible to receive either (i) $50.0 million if Royalty Pharma receives $270.0 million or more in royalty payments from GSK, which we would expect to occur in the event TRELEGY global net sales are approximately $3.16 billion or (ii) $100.0 million if Royalty Pharma receives $305.0 million or more in royalty payments from GSK, which we would expect to occur in the event TRELEGY global net sales exceed approximately $3.51 billion.

Current wording

With respect to 2026 TRELEGY global net sales, we are eligible to receive either (i) $50.0 million if Royalty Pharma receives $270.0 million or more in royalty payments from GSK, which we would expect to occur in the event TRELEGY global net sales are approximately $3.16 billion or (ii) $100.0 million if Royalty Pharma receives $305.0 million or more in royalty payments from GSK, which we would expect to occur in the event TRELEGY global net sales exceed approximately $3.51 billion. To achieve the higher $100.0 million milestone in 2026, TRELEGY global net sales would require less than a 2% increase over its 2024 global net sales.

Previous wording

Total 2024 TRELEGY global net sales represented a 26% increase compared to 2023, and TRELEGY is currently expected to generate global peak sales of approximately $4.1 billion in 2026 according to consensus estimates. TRELEGY global net sales for the three months ended March 31, 2025 were $854 million which represented a 14% year-over-year growth.

Current wording

Total 2024 TRELEGY global net sales represented a 26% increase compared to 2023, and TRELEGY is currently expected to generate global peak sales of approximately $4.1 billion in 2026 according to consensus estimates. TRELEGY global net sales for the three and six months ended June 30, 2025 were $1.11 billion and $1.96 billion, respectively, which represented 4% and 8% year-over-year growth, respectively.

Previous wording

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. On a country-by-country basis, we will be entitled to royalties until the expiration of the longest-lived patent or 15 years after commercial launch, whichever comes later. We expect fifteen years after the commercial launch 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. TRELEGY royalties payable to us by Royalty Pharma are country specific. Total royalty rates are upward tiering from 6.5% to 10% and based on total annual global net sales as follows:

Current wording

In addition to potential Milestone Payments, we were eligible to 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. On a country-by-country basis, we were entitled to royalties until the expiration of the longest-lived patent or 15 years after commercial launch, whichever comes later. We expect fifteen years after the commercial launch 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. The TRELEGY royalties that were payable to us by Royalty Pharma are country specific. Total royalty rates were upward tiering from 6.5% to 10% and based on total annual global net sales as follows:

Previous wording

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.

Current wording

See*“Risk Factors—We do not control the commercialization of TRELEGY; accordingly, our receipt of Milestone Payments will depend on, among other factors, GSK’s ability to further commercialize TRELEGY”*for additional information.

Previous wording

We believe that the accounting policies and estimates discussed in our Annual Report on Form 10-K for the year ended December 31, 2024 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. There have been no

Current wording

We believe that the accounting policies and estimates discussed in our Annual Report on Form 10-K for the year ended December 31, 2024 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. There have been no material changes to the critical accounting policies and estimates discussed in our Annual Report on Form 10-K for the year ended December 31, 2024.

Previous wording

While Viatris records the total net sales of YUPELRI within its own financial statements, our implied 35% YUPELRI revenue, as compared to the prior year comparable period, was as follows:

Current wording

While Viatris records the total net sales of YUPELRI within its own financial statements, our implied 35% YUPELRI revenue, as compared to the prior year comparable periods, was as follows:

Previous wording

Our recognized revenue, as compared to the prior year comparable period, was as follows:

Current wording

Our recognized revenue, as compared to the prior year comparable periods, was as follows:

Previous wording

The following table summarizes our R&D expenses incurred, net of any reimbursements from collaboration partners, as compared to the prior year comparable period:

Current wording

The following table summarizes our R&D expenses incurred, net of any reimbursements from collaboration partners, as compared to the prior year comparable periods:

Previous wording

R&D expenses increased by $2.5 million for the three months ended March 31, 2025 compared to the prior year period. The $2.5 million increase was primarily attributed to a $2.2 million increase in external-related expenses. 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 incremental New Drug Application (“NDA”) and regulatory-related activities associated with ampreloxetine.

Current wording

R&D expenses increased by $3.0 million for six months ended June 30, 2025 compared to the prior year period. The $3.0 million increase was primarily attributed to a $2.5 million increase in external-related expenses and partially offset by a $0.6 million decrease in share-based compensation expense. The increase in external-related expenses was primarily driven by the continued progression of the CYPRESS study and incremental NDA and regulatory-related activities associated with ampreloxetine. The decrease in share-based compensation expense was primarily driven by our cost savings initiatives.

Previous wording

SG&A expenses, as compared to the prior year comparable period, were as follows:

Current wording

SG&A expenses, as compared to the prior year comparable periods, were as follows:

Previous wording

Total SG&A expenses were $18.4 million for the three months ended March 31, 2025. Excluding share-based compensation expense (“SBC”), total SG&A expenses were $14.6 million for the first quarter of 2025 and were comprised of $7.3 million of general and administrative (“G&A”) expenses and $7.3 million of selling, marketing & medical affairs (“SM&M”) expenses. Total SG&A expenses (excluding SBC) were $13.0 million for the first quarter of 2024 and were comprised of $6.9 million of G&A expenses and $6.1 million of SM&M expenses.

Current wording

Total SG&A expenses were $18.4 million for the three months ended June 30, 2025. Excluding share-based compensation expense (“SBC”), total SG&A expenses were $14.9 million for the second quarter of 2025 and were comprised of $8.2 million of general and administrative (“G&A”) expenses and $6.7 million of selling, marketing & medical affairs (“SM&M”) expenses. Total SG&A expenses (excluding SBC) were $12.8 million for the second quarter of 2024 and were comprised of $6.8 million of G&A expenses and $6.0 million of SM&M expenses.

Previous wording

First quarter of 2025 G&A expenses (excluding SBC) increased by $0.3 million compared to the prior year comparable period and was primarily due to incremental costs to support our ongoing strategic review process that was announced in November 2024. SM&M expenses (excluding SBC) increased by $1.2 million in the first quarter of 2025 compared to the prior year comparable period and was primarily due to pre-launch medical affairs and commercialization expenses associated with ampreloxetine.

Current wording

Second quarter of 2025 G&A expenses (excluding SBC) increased by $1.4 million compared to the prior year period and was primarily due to one-time legal costs. Excluding the one-time legal costs, G&A expenses were 12% lower compared to the prior year period driven by cost savings initiatives. SM&M expenses (excluding SBC) increased by $0.6 million in the second quarter of 2025 compared to the prior year period and were primarily due to pre-launch medical affairs and commercialization expenses associated with ampreloxetine.

Previous wording

Interest expense, as compared to the prior year comparable period, was as follows:

Current wording

Interest expense, as compared to the prior year comparable periods, was as follows:

Previous wording

Interest expense was $0.6 million for the three months ended March 31, 2025 and represented non-cash interest expense associated with the $25.0 million received from Royalty Pharma in July 2022 to partially fund the CYPRESS study. We do not anticipate having any cash interest expense in the foreseeable future.

Current wording

Interest expense was $0.7 million and $1.3 million for the three and six months ended June 30, 2025, respectively, and represented non-cash interest expense associated with the $25.0 million received from Royalty Pharma in July 2022 to partially fund the CYPRESS study. We do not anticipate having any cash interest expense in the foreseeable future.

Previous wording

Interest and other income, net, as compared to the prior year comparable period, was as follows:

Current wording

Interest and other income, net, as compared to the prior year comparable periods, was as follows:

Previous wording

Provision for Income Tax Benefit (Expense)

Current wording

Provision for Income Tax Expense

Previous wording

The provision for income tax benefit (expense), as compared to the prior year comparable period, was as follows:

Current wording

The provision for income tax expense, as compared to the prior year comparable periods, was as follows:

Previous wording

For the three months ended March 31, 2025, we recognized an income tax benefit of $0.6 million which was primarily attributed to forecasted pre-tax losses. For the prior year comparable period, the $1.3 million income tax expense was primarily related to uncertain tax positions, as well as interest expense on our uncertain tax position liability which we began to accrue in the fourth quarter of 2023.

Current wording

For the six months ended June 30, 2025, we recognized an income tax expense of $17.8 million which was primarily attributed to the net gain on realized contingent milestone and royalty assets arising from the sale of our TRELEGY royalties in May 2025. For the prior year comparable period, the $2.6 million income tax expense was primarily related to uncertain tax positions, as well as interest expense on our uncertain tax position liability which we began to accrue in the fourth quarter of 2023.

Previous wording

As of March 31, 2025, we had approximately $130.9 million in cash, cash equivalents, and investments in marketable securities (excluding restricted cash) and no long-term debt.

Current wording

As of June 30, 2025, we had approximately $338.8 million in cash, cash equivalents, and investments in marketable securities (excluding restricted cash) and no long-term debt.

Previous wording

In February 2025, we received a $50.0 million milestone from Royalty Pharma, which was the maximum that we could have received related to 2024 TRELEGY global net sales.

Current wording

In February 2025, we received a $50.0 million milestone from Royalty Pharma, which was the maximum that we could have received related to 2024 TRELEGY global net sales, and in June 2025, we received $225.0 million from GSK related to the Royalty Sales Agreement transaction.

Previous wording

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.

Current wording

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 YUPELRI, 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.

Previous wording

Cash flows, as compared to the prior year comparable period, were as follows:

Current wording

Cash flows, as compared to the prior year comparable periods, were as follows:

Previous wording

Net cash provided by operating activities was $43.0 million for the three months ended March 31, 2025, consisting of a net loss of $13.6 million, a net increase in cash resulting from adjustments for non-cash and other reconciling items of $4.7 million and a net increase in cash resulting from changes in operating assets and liabilities of $51.9 million. The net increase in cash resulting from changes in operating assets and liabilities included the $50.0 million milestone payment from Royalty Pharma as noted above.

Current wording

Net cash provided by operating activities was $251.1 million for the six months ended June 30, 2025, consisting of net income of $41.3 million, a net increase in cash resulting from adjustments for non-cash and other reconciling items of $0.1 million and a net increase in cash resulting from changes in operating assets and liabilities of $209.7 million. The net increase in cash resulting from changes in operating assets and liabilities included a $50.0 million TRELEGY milestone payment from Royalty Pharma in February 2025 and cash proceeds of $225.0 million from GSK in June 2025 resulting from the sale of our TRELEGY royalties.

Previous wording

Net cash used in operating activities was $1.0 million for the three months ended March 31, 2024, consisting of a net loss of $11.7 million, a net increase in cash resulting from adjustments for non-cash and other reconciling items of $6.5 million and a net increase in cash resulting from changes in operating assets and liabilities of $4.1 million.

Current wording

Net cash used in operating activities was $5.4 million for the six months ended June 30, 2024, consisting of a net loss of $28.2 million, a net increase in cash resulting from adjustments for non-cash and other reconciling items of $15.9 million and a net increase in cash resulting from changes in operating assets and liabilities of $6.8 million.

Previous wording

Net cash flows provided by investing activities

Current wording

Net cash flows provided by (used in) investing activities

Previous wording

Net cash provided by investing activities was $30.6 million for the three months ended March 31, 2025, consisting of cash inflows from the net purchase and maturities of marketable securities.

Current wording

Net cash used in investing activities was $5.6 million for the six months ended June 30, 2025, consisting primarily of net cash outflows from the purchase and maturities of marketable securities.

Previous wording

Net cash provided by investing activities was $17.0 million for the three months ended March 31, 2024, consisting of cash inflows from the net purchase and maturities of marketable securities of $17.1 million and cash outflows from the net purchase and sale of property and equipment of $0.1 million.

Current wording

Net cash provided by investing activities was $14.0 million for the six months ended June 30, 2024, consisting of net cash inflows from the purchase and maturities of marketable securities of $14.1 million and cash outflows from the purchase of property and equipment of $0.1 million.

Previous wording

Net cash used in financing activities was $0.9 million for the three months ended March 31, 2025, consisting primarily of $0.9 million of cash outflows related to the repurchase of shares to satisfy tax withholding obligations.

Current wording

Net cash used in financing activities was $1.4 million for the six months ended June 30, 2025, consisting primarily of cash outflows related to the repurchase of shares to satisfy tax withholding obligations.

Previous wording

Net cash used in financing activities was $1.7 million for the three months ended March 31, 2024, consisting of $0.4 million of cash outflows related to the repurchase of ordinary shares as part of completion of our capital return program and $1.3 million of cash outflows related to the repurchase of shares to satisfy tax withholding obligations.

Current wording

Net cash used in financing activities was $1.8 million for the six months ended June 30, 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, $0.4 million of cash inflows related to the sale of shares through our employee share purchase program (“ESPP”) and $1.7 million of cash outflows related to the repurchase of shares to satisfy tax withholding obligations.