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Theravance, Inc. (THRX)

Q4 2008 Earnings Call

February 12, 2009 5:00 pm ET


Michael W. Aguiar – Senior Vice President & Chief Financial Officer

Rick E. Winningham – Chief Executive Officer


Thomas Russo – Robert W. Baird

Michael Aberman – Credit Suisse

Moshe Katri – Cowen & Company

Marshall Urist – Morgan Stanley

Ian Somaiya – Thomas Weisel Partners

Jim Birchenough – Barclays Capital

Biren Amin – Stanford Group



Ladies and gentlemen good afternoon. At this time, I would like to welcome everyone to the Theravance Conference Call to review results for the quarter and year ended December 31, 2008. During the presentation, all participants will be in a listen-only mode. A question-and-answer session will follow the Company’s formal remarks. (Operator instructions) I will repeat these instructions after management completes their prepared remarks. Today’s conference call is being recorded.

And now, I would like to turn the call over to Mike Aguiar, Senior Vice President and Chief Financial Officer. Please go ahead, sir.

Michael W. Aguiar

Good afternoon everyone, and thank you for joining us. With me on the call today is Rick Winningham, our Chief Executive Officer. Today's call will be in three parts. First of all, Rick will review highlights from the quarter and provide an update on our clinical programs, then I will review our financial results, and finally we will open up the call for questions.

Earlier today, Theravance issued a press release detailing fourth quarter and 2008 financial results and recent corporate developments. A copy of the press release can be downloaded from our website or you can call Investor Relations at 650-808-4100, and we will be happy to assist you.

Before we get started, we would like to remind you that this conference call contains forward-looking statements regarding future events and the future performance of Theravance. Forward-looking statements include anticipated results, and other statements regarding Theravance's goals, expectations, strategies, and beliefs. These statements are based upon the information available to the Company today, and Theravance assumes no obligation to update these statements as circumstances change.

Future events and actual results could differ materially from those projected in the Company's forward-looking statements. Additional information concerning factors that could cause results to differ materially from our forward-looking statements are described in greater detail in the Company's most recent 10-Q filed with the SEC.

I will now turn the call over to Rick Winningham, our Chief Executive officer. Rick?

Rick E. Winningham

Thanks Mike. Good afternoon everyone. During 2008, Theravance made progress in our clinical and regulatory activities. In particular, we achieved very important milestones in the Horizon collaboration with GSK reporting positive results in two Phase 2b studies and two indications with '444, the lead long-acting beta agonist. We recently reported results from three Phase 2b studies in asthma with fluticasone furoate GSK’s inhaled corticosteroid.

Additionally, in November, Telavancin received a favorable recommendation from the FDA Anti-Infective Drugs Advisory Committee for the treatment of complicated skin and skin structure infections. And finally, we recently submitted a new drug application to the FDA for Telavancin in the treatment of nosocomial pneumonia.

Now I will provide more details on these developments, and then Mike will walk through our financials. First let me turn to the Horizon program with GSK. Substantial progress has been made in this program since our last call. Last week, Theravance and GSK reported positive results from the three Phase 2b studies of fluticasone furoate, and we are pleased with the positive results of these studies and patients with mild, moderate, and severe asthma, which together enrolled over 1800 patients.

In December Theravance and GSK reported positive news in the two Phase 2b studies for '444 and these studies each enrolled approximately 600 patients with moderate to severe asthma, that study being about 600 patients and that another 600 patients study with moderate to severe chronic obstructive pulmonary disease.

In total, these five studies have enrolled over 3000 asthma and COPD patients worldwide. The results of these studies are very significant for the Horizon program. With these data, we have completed our dose ranging work for these assets, and have identified once daily doses of both compounds that are well tolerated and produce statistically significant bronchodilation.

The next step in the Horizon program is for GSK to conduct end of Phase 2 meetings with the FDA in the first half of 2009 to discuss the results of the program today and potential study designs for the Phase 3 programs in asthma and COPD.

Turning to the MABA program. Based on our positive proof-of-concept Phase 2study results, we reported in COPD patients with '081 during the third quarter of 2008. GSK and Theravance anticipate starting a larger Phase 2b dose ranging study in 2009. We believe that this compound may provide new treatment options, either as monotherapy or potentially in combination with an inhaled corticosteroid for patients suffering from COPD.

Now, we will turn our attention to the Telavancin program. On January 26, we announced we have submitted the new drug application to the FDA for the proposed indication to treat nosocomial pneumonia also known as hospital-acquired pneumonia. We expect to hear from FDA by the end of the first quarter whether the NDA was accepted for filing and if accepted to receive a PDUFA date for the NDA. We will earn a $10 million milestone payment from Astellas upon the FDA’s acceptance on the HAP NDA.

Last November, the FDA Anti-Infective Drugs Advisory Committee reviewed Telavancin for complicated skin and skin structure infections Telavancin received a favorable recommendation from the Committee. This is a very important positive development in the Telavancin program. The Committee voted 21 to 5 that the data presented demonstrated the safety and effectiveness of Telavancin for the treatment of complicated skin and skin structure infections. The committee also voted 18 to 5 with 3 abstentions that there are specific clinical situations in which benefits of Telavancin use in pregnant women with complicated skin and skin structure infections would outweigh the risks. And a 25 to 1 the risk management strategy is needed to prevent unintended use of Telavancin in pregnant women or women of child-bearing potential.

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