Theravance, Inc. (THRX)

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Theravance, Inc. (THRX)

Q3 2009 Earnings Call

October 27, 2009, 2009 5:00 pm ET


Mike Aguiar - SVP and CFO

Rick Winningham - CEO


Tom Russo - Baird

Michael Aberman - Credit Suisse

Brian Skorney - ThinkEquity

John Stephenson - Summer Street Research

Biren Amin - FTN Equity Capital

Ian Sanderson - Cowen & Company



I would like to welcome everyone to the Theravance Conference Call to review results for the quarter ended September 30, 2009. 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.

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

Mike 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, 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 third quarter 2009 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 Winningham

Thanks Mike. Good afternoon everyone. This has been a very exciting time for Theravance with the recent US and Canadian approvals of VIBATIV for the treatment of adult patients with complicated skin and skin structure infections caused by Gram-positive bacteria including MRSA.

VIBATIV's approval is a significant accomplishment for Theravance and it validates our drug-discovery and development strategy as well providing concession for the new treatment options for patient with these serious infections.

In the Horizon program, GSK and Theravance announced this morning the initiation of the Phase 3 program in chronic obstructive pulmonary disease another important milestone for Theravance and our collaboration with GSK.

Now I'll provide you with more details on these developments and then Mike will walk you through the financials later in the call. First let turn to our Horizon program with GSK.

GSK and Theravance reported in a press release this morning that the first patient was dosed in the Horizon Phase 3 program. The goal of which is to develop a next generation combination treatment for patients with COPD. This program consists of a broad range of large scale Phase 3 studies to evaluate the combination of investigational once-daily long-acting beta agonists 444 and the once-daily inhaled corticosteroid fluticasone furoate or F.

The overall program which will study more than 6,000 patients, includes two 12-month exacerbation studies; two, six-month efficacy and safety studies and a detailed lung function profile stud, and studies to assess the potential for superiority of the fixed combination of '444 and FF versus other strip treatments for COPD.

The Phase 3 program is designed to generate data comprehensive enough to meet global registration requirement. The initiation of the Phase 3 program in COPD is important due to the significant unmet medical need for better and more convenient treatment options for the millions of patients worldwide with this disease.

In addition to the COPD development program, GSK and Theravance remain committed to progression of the Horizon program for the treatment of asthma and we look forward to providing you an update when additional information becomes available.

As a reminder, Theravance is entitled to receive royalties of 15% on the first $3 billion of annual net sales and 5% on annual net sales above $3 billion for the approved single-agent LABA and combination LABA ICS medicines. We have no development costs associated with this program.

Now, we will turn to telavancin. VIBATIV the brand name of telavancin gained approval in the US and Canada for the treatment of adult patients with complicated skin and skin structure infections during the third quarter.

This is the first approved indication for VIBATIV and Theravance's first drug approval, marking a major milestone for the company. In October we announced that Theravance earned a milestone payment of $20 million for FDA approval of VIBATIV and supplying our partners Astellas, with the launch inventory for the first commercial sale in the United States. Astellas recently began notifying wholesalers that they are now accepting orders for VIBATIV in preparation for a commercial launch this quarter.

We have set our wholesale acquisition cost pricing at $150 for 750 ml vial and $50 for 250 ml vial. VIBATIV dosing is dependent upon the patients weight, as well as their renal function. The recommended dosing for VIBATIV is 10 mg per kilogram once-a-day.

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