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Theravance, Inc. (THRX)

2013 Citi Global Healthcare Conference Call

February 27, 2013, 03:00 pm ET


Rick Winningham - Chairman & CEO



Rick Winningham

Thanks very much. I would like to thank Citi for inviting us here to present today. We've got a terrific year ahead of us at Theravance; I'll walk you through in the presentation some of the significant events and significant programs that we are working on this year.

Before I get started, there is a Safe Harbor, of course we'll be making some forward-looking statements and you should refer to our SEC documents that are currently on our website.

Theravance, so what do we focus on? Well, medicines that makes a difference. We focus on discovery and development of medicines. We are working on building value from drug discovery through commercialization. We have multiple major late stage programs in Phase 3 in front of regulatory authorities. We have a very deep pipeline behind those programs and as I noted 2013 is a path to significant growth for the company.

If you look at the growth drivers for us for 2013 and beyond, three late stage respiratory programs with the potential to enter very large markets with Chronic Obstructive Pulmonary Disease as well as asthma. Also our high value strategic partnerships with GlaxoSmithKline and the significant funding that they have provided to advance the company.

Another key driver for growth in 2013 and beyond is the deep pipeline beyond the late stage respiratory programs. We've taken over 20 development candidates into the clinic and we have over 1,430 patents that have been issued to Theravance discovered molecules and we are in a very strong financial position, strong cash position going into 2013 and beyond.

First, I'll start with the advanced respiratory programs in partnership with GSK. Stepping back for a moment, looking at the size of the opportunity, here you see a graph of sales of products containing long-acting beta agonist and 12 months ending September 2012 it was approximately $20 billion market segment. If you look at long-acting bronchodilators over this period of 2009 to 2012 has increased at a rate of about 8.8%, so a significant market for long-acting bronchodilators. That includes not only beta agonist, but also long-acting muscarinic antagonist namely tiotropium.

What is driving the growth? Well, the driver of the growth primarily up to this point-in-time, but specifically for 2011 to 2021, we expect to be Chronic Obstructive Pulmonary Disease. Patient growth is expected to be about 2.5% in COPD; asthma relatively flat at about four-tenths of percent. But these are very large existing markets and as I mentioned are expected to grow over the next decade.

So if we step back for a moment and we look at what are the key things in asthma and COPD and we focus on the information that was presented at the European Respiratory Society Meeting in 2012, I think we took away three key things. One of them was the importance of managing exacerbation. Importantly, data presented there in COPD patients said that an exacerbation actually changes the rate in pulmonary function decline.

When patients have a COPD exacerbation, they experience an acute decline in their lung function. It rebound somewhat of that trough, but never reaches a previous level of lung function and then declines from there. That’s important, because that is paramount, preventing exacerbation, a paramount objective of therapy.

There is an increasing important of long-acting muscarinic antagonist containing therapies in COPD and in COPD data they are presented that the value of combining a long-acting beta agonist as well as with the long-acting muscarinic antagonist for improving bronchodilation.

And finally the third take-away was the emerging importance of triple therapy. Overall, patients with dual mechanisms in COPD demonstrated greater FEV1 improvements in single agents, so that deals with the two product combination.

And then importantly the addition of a long-acting muscarinic antagonist to the LABA/ICS combination was shown to reduce exacerbation in asthmatics. There was data presented at ERS, there was also additional data presented at an allergy meeting last week where the addition of LABA, two LABA/ICS therapy reduced exacerbation rates in asthmatics. This is critically important because if you look at the evolution of care in COPD or in asthma, we believe the evolution of care is likely to go towards triple mechanism therapy.

And Theravance with our partner GSK is in a strong strategic position with our respiratory portfolio. If you look at single-agent compounds vilanterol, the long-acting beta agonist contained in the LABA/ICS combination of RELVAR or BREO and single agent TD-4208 which we are developing on our own in COPD as a nebulized product for those COPD patients who mechanically are unable to use a dry powder or a meter dose inhaler.

Moving from single-agent to dual mechanism, we have a product RELVAR outside the United States, same product BREO inside in the United States for the treatment of both COPD and asthma. ANORO the product that we are developing LAMA/LABA once a day product, developed and filed in the United States and Europe in COPD. And finally, MABA a by functional program of muscarinic antagonist the beta agonist, both activities in the same molecular structure that provides significant bronchodilation as demonstrated in the presentation at the European Respiratory Society Meeting back in September. So three products featuring dual mechanisms either by combining two mechanisms in a single inhaler or by a bi-functional molecule is in MABA.

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