8-K: Theravance Biopharma Secures Key Regulatory Approval for YUPELRI in China, Triggering $7.5 Million Milestone

Theravance Biopharma, Inc. announced that its partner Viatris, Inc. has received regulatory approval for YUPELRI (revefenacin) in China, leading to a $7.5 million milestone payment and future sales-based royalties.

Summary

• YUPELRI (revefenacin) inhalation solution has received regulatory approval from China's National Medical Products Administration (NMPA).
• YUPELRI is the first once-daily nebulized long-acting muscarinic antagonist (LAMA) approved for maintenance treatment of chronic obstructive pulmonary disease (COPD) in China.
• This approval triggers a one-time $7.5 million milestone payment from Viatris, Inc. to Theravance Biopharma, which is expected to be received in Q3 2025.
• Theravance Biopharma is also eligible for further sales-based milestones of up to $37.5 million and tiered royalties of 14% to 20% on net sales in China.
• Viatris is responsible for all aspects of development and commercialization of YUPELRI in China, meaning Theravance Biopharma incurs no commercial costs.
• The company highlighted its diversified and improving financial position, including $131 million in cash as of March 31, 2025, an additional $225 million from the recent sale of TRELEGY royalties to GSK, and 35% of U.S. YUPELRI profits.
• Up to $150 million in near-term potential TRELEGY milestone payments from Royalty Pharma were also noted.
• Theravance Biopharma is nearing completion of enrollment in the open label portion of CYPRESS, its registrational study of ampreloxetine in symptomatic neurogenic orthostatic hypotension associated with multiple system atrophy.

Sentiment

Score: 8

Explanation: The announcement of regulatory approval in a major market like China, coupled with immediate and future milestone payments and royalties, significantly strengthens the company's financial outlook and product pipeline. The fact that Theravance incurs no commercial costs in China further enhances the positive financial impact. Progress on the wholly-owned ampreloxetine asset also adds to the positive sentiment.

Positives

• Regulatory approval for YUPELRI in China, opening a significant new market for the product.
• Immediate $7.5 million milestone payment from Viatris expected in Q3 2025.
• Eligibility for substantial future sales-based milestones of up to $37.5 million and tiered royalties of 14% to 20% on net sales in China.
• Theravance Biopharma incurs no commercial costs for YUPELRI in China, as Viatris is responsible for all development and commercialization.
• Strong financial position with $131 million in cash as of March 31, 2025.
• Additional $225 million secured from the recent sale of TRELEGY royalties to GSK.
• Continued revenue stream from 35% of U.S. YUPELRI profits.
• Potential for up to $150 million in near-term TRELEGY milestone payments from Royalty Pharma.
• Progress in the CYPRESS Phase 3 study for ampreloxetine, a wholly-owned asset with potential to address a significant unmet medical need in a rare neurological disorder.

Risks

• Factors that could increase the Company's cash requirements or expenses beyond its expectations and any factors that could adversely affect its profitability.
• Uncertainty whether the milestone thresholds for YUPELRI sales in China can be achieved.
• Delays or difficulties in commencing, enrolling, or completing clinical studies, particularly for ampreloxetine.
• The potential that results from clinical or non-clinical studies indicate the Company's product candidates or product are unsafe, ineffective, or not differentiated.
• Risks of decisions from regulatory authorities that are unfavorable to the Company.
• Dependence on third parties to conduct clinical studies.
• Delays or failure to achieve and maintain regulatory approvals for product candidates.
• Risks of collaborating with or relying on third parties to discover, develop, manufacture, and commercialize products.
• Risks associated with establishing and maintaining sales, marketing, and distribution capabilities with appropriate technical expertise and supporting infrastructure.
• The ability of the Company to protect and to enforce its intellectual property rights.
• Volatility and fluctuations in the trading price and volume of the Company's shares.
• General economic and market conditions.

Future Outlook

Theravance Biopharma expects to receive a $7.5 million milestone payment in Q3 2025 following YUPELRI's approval in China and anticipates further sales-based milestones of up to $37.5 million and tiered royalties of 14% to 20% on net sales in China. The company also highlights its strong financial position, including existing cash, proceeds from the TRELEGY royalty sale, and potential future TRELEGY milestone payments. Furthermore, the company is nearing completion of enrollment for the open-label portion of its Phase 3 CYPRESS study for ampreloxetine, with plans to file an NDA for full approval in the US if results are supportive.

Management Comments

• "Todays announcement offers further support for Theravance Biopharmas diversified and improving financial position, which includes $131 million in cash as of March 31, 2025, an additional $225 million from the recent sale of TRELEGY royalties to GSK, 35% of U.S. YUPELRI profits, and up to $150 million in near-term potential TRELEGY milestone payments from Royalty Pharma."
• "It also comes as the Company nears completion of enrollment in the open label portion of CYPRESS, its registrational study of ampreloxetine in symptomatic neurogenic orthostatic hypotension associated with multiple system atrophy."
• "Ampreloxetine is a wholly-owned asset with the potential to address a significant unmet need in this rare neurological disorder."
• "Theravance Biopharma, Inc.'s focus is to deliver Medicines that Make a Difference in people's lives."
• "The Company is committed to creating/driving shareholder value."

Industry Context

The approval of YUPELRI in China marks a significant expansion for Theravance Biopharma and Viatris into a large and growing pharmaceutical market, particularly for chronic obstructive pulmonary disease (COPD) treatments. As the first once-daily nebulized LAMA approved in China, YUPELRI gains a first-mover advantage in a potentially lucrative segment, addressing a significant patient population. This development aligns with a broader industry trend of pharmaceutical companies seeking to expand their market reach into emerging economies like China, which offer substantial growth opportunities for specialized therapies.

Stakeholder Impact

• Shareholders: Positive impact due to new market access, immediate and future revenue streams, improved financial position, and progress on pipeline assets, potentially leading to increased share value.
• Patients (COPD in China): Access to a new, once-daily nebulized LAMA treatment option (YUPELRI) for maintenance treatment of COPD.
• Viatris, Inc.: Gains a new approved product for commercialization in China, expanding its portfolio and market presence.
• Employees: Enhanced job security and potential for growth due to company's strengthened financial position and pipeline success.

Next Steps

• Receipt of $7.5 million milestone payment from Viatris in Q3 2025.
• Continued eligibility for further sales-based milestones (up to $37.5 million) and tiered royalties (14% to 20%) on YUPELRI net sales in China.
• Viatris to handle all aspects of development and commercialization of YUPELRI in China.
• Completion of enrollment in the open label portion of the CYPRESS Phase 3 study for ampreloxetine.
• If CYPRESS study results are supportive, plans to file an NDA for full approval of ampreloxetine in the US for symptomatic nOH in patients with MSA.

Key Dates

Keywords

Theravance Biopharma, YUPELRI, revefenacin, COPD, chronic obstructive pulmonary disease, China NMPA approval, milestone payment, royalties, Viatris, ampreloxetine, neurogenic orthostatic hypotension, multiple system atrophy, pharmaceutical, biotechnology, drug approval, respiratory medicine