Theravance Cut Costs as YUPELRI Demand Accelerated
Non-GAAP operating income improved to $9.5 million as expense reductions deepened.
Theravance Biopharma (TBPH), the biopharmaceutical company focused on respiratory medicines, narrowed its cost base as YUPELRI customer-demand growth accelerated to 10% in the second quarter from 4% in the prior period.
The improvement came as Theravance moved from evaluating strategic alternatives to agreeing to be acquired by Zymeworks. The transaction provides $17 a share in cash and a contingent value right covering 80% of net proceeds from any ampreloxetine monetization, with closing expected in the second half of 2026.
Revenue fell 21% to $20.7 million from $26.2 million a year earlier, when Theravance recorded $7.5 million of licensing revenue. The latest quarter's revenue consisted entirely of collaboration revenue from Viatris, which rose 11% year over year and 17% sequentially, though its annual growth slowed from 15% in the first quarter.
YUPELRI U.S. net sales increased 7% to $70.7 million and rose 13% from the first quarter. Hospital-channel dose growth accelerated for a second consecutive quarter to 25%, up from 19% in the first quarter and 13% in the fourth quarter of 2024, helping customer demand grow faster than reported sales.
TRELEGY global net sales reached approximately $1.0 billion, up from $873 million in the first quarter, bringing first-half sales to about $1.9 billion. Theravance maintained high confidence that it will receive the associated $100 million milestone in 2026.
Operating expenses excluding restructuring and transaction costs declined 35% year over year, compared with a roughly 20% reduction in the first quarter. R&D expense fell 55% to $4.7 million as restructuring and the CYPRESS trial wind-down took effect, while selling, general and administrative expense declined 23% to $14.2 million.
GAAP results swung to a $5.9 million net loss from net income of $54.8 million a year earlier, when Theravance recognized a $75.1 million gain from the sale of its remaining TRELEGY royalty interest. The quarter included $4.0 million of restructuring expense and $6.1 million of legal and financial advisory costs tied to the Zymeworks transaction.
Theravance now expects to realize its full restructuring savings during the second half, broadening the timing from its earlier third-quarter forecast. Its targets remain about $70 million of run-rate savings, a roughly 60% reduction in operating expenses and $60 million to $70 million of annualized cash flow. The company ended the quarter with $387.7 million in cash and marketable securities and no debt.