Theravance Biopharma, inc (TBPH) Q2 2021 Earnings Call Transcript

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Theravance Biopharma, inc (TBPH 1.52%)
Q2 2021 Earnings Call
Aug 3, 2021, 5:00 p.m. ET

Contents:

• Prepared Remarks
• Questions and Answers
• Call Participants

Prepared Remarks:

Operator

Ladies and gentlemen, thank you for standing by. Good afternoon. I'd like to welcome everyone to Theravance Biopharma's Second Quarter 2021 Conference Call. [Operator Instructions]

And now I'd like to turn the call over to Gail Cohen, Vice President, Corporate Communications. Please go ahead.

Gail Cohen -- Corporate Communications

Good afternoon, and thank you for joining the Theravance Biopharma Second Quarter 2021 Conference Call to discuss our business. As always, I remind you that this call will contain forward-looking statements that involve risks and uncertainties, including statements about our development pipeline, expected benefits of our products, anticipated timing of clinical trials, regulatory filings and expected financial results. Information concerning factors that could cause results to differ materially from our forward-looking statements is described further in our filings with the SEC.

Now I would direct your attention to Slide three. Joining us are Rick Winningham, Chief Executive Officer; followed by Rick Graham, Senior Vice President, Development; Frank Pasqualone, Chief Business Officer; and Andrew Hindman, Chief Financial Officer.

Now I will hand the call to Rick Winningham for opening remarks.

Rick E Winningham -- Chairman and Chief Executive Officer

Thanks, Gail. 2021 has been about progress, progress of our clinical pipeline; of our commercial asset, YUPELRI; and progress as we as a company adapt to the ever-changing pandemic and define what our business will look like in the future. I'm grateful to the team at Theravance Biopharma who continue to show resilience and perseverance while continuing to ensure our advancement and commitment to developing medicines that make a difference.

Starting on Slide five. In the second quarter, we made strong progress delivering the data of one of our four pipeline catalysts, Phase II data for nezulcitinib, our investigational, inhaled, lung-selective, pan-JAK inhibitor for acute and chronic lung injury. We continue to drive forward our clinical programs, preparing for two critical data readouts, izencitinib Phase IIb data in ulcerative colitis, which will report top line results just ahead of ampreloxetine Phase III data for symptomatic neurogenic orthostatic hypotension in the third quarter.

On the respiratory front, moving to Slide six, YUPELRI and TRELEGY have continued to make strides, showing signs of rebounding from the pandemic headwinds of 2020 with continued market share and net sales growth. Frank will expand on the metrics from the second quarter and trends that we are continuing to see in July of 2021. We're also planning for the future of YUPELRI as we, along with our partner, Viatris, are initiating a Phase IV clinical study.

This study will compare improvements in lung function in adults with severe to very severe COPD and suboptimal inspiratory flow rate following once-daily treatment with either YUPELRI delivered via a standard jet nebulizer or tiotropium delivered via a dry powder inhaler. Findings from this study are intended to provide data to support a possible label update and help better inform physicians as they are working with their patients to design COPD treatment plans. We expect the study to kick off later this year.

I'll now turn the call over to Rick Graham, who will discuss the upcoming pipeline catalysts. Rick?

Richard A. Graham -- Senior Vice President, Development

Thanks, Rick. It's an exciting quarter for Theravance Biopharma as we approach top line data readouts for two of our key clinical programs. The Phase IIb study of izencitinib in ulcerative colitis will read out first, followed by the first of two ongoing pivotal studies for ampreloxetine in symptomatic nOH. I'll start with izencitinib, our oral gut-selective pan-JAK inhibitor to treat inflammatory bowel diseases, which is partnered with Janssen.

On Slide eight, we outline details for the izencitinib Phase IIb study. In addition to reporting the primary end point, we plan to share key secondary end points and standard disease surrogate IBD biomarkers. We will also provide a safety analysis and systemic drug concentrations. Low drug concentration in the systemic circulation is an important differentiator for izencitinib given the JAK class safety concerns. We will report the adverse event profile and highlight adverse events of special interest.

As a reminder, the goal for izencitinib is to maximize therapeutic benefit to patients while minimizing side effects. We believe a gut-selective JAK inhibitor, like izencitinib, has the potential to be a game changer for the treatment of IBD and that it has a potential to become a once-daily oral treatment amenable to earlier lines of therapy as well as combination approaches. On Slide 10 are the details for the ampreloxetine Phase III SEQUOIA study, which will read out this quarter shortly after izencitinib. SEQUOIA is the first of two ongoing pivotal studies. We'll share our time line for reporting on the second study, REDWOOD, in the near future.

As a reminder, ampreloxetine is a once-daily norepinephrine reuptake inhibitor for the treatment of symptomatic nOH. We are working to break new ground in this disease area as there is a significant unmet medical need for the treatment of patients with symptomatic nOH, a condition that profoundly impacts the quality of life and occurs in people suffering from Parkinson's disease, multiple system atrophy and pure autonomic failure. We plan to share the primary, the key secondary end points, and we'll also report the adverse event profile, including supine hypertension. We look forward to sharing results for both of these important pipeline catalysts soon.

Next, Frank will speak to our commercial team's progress with YUPELRI. Frank?

Frank Pasqualone -- Senior Vice President, Chief Business Officer

Thanks, Rick. Turning to Slide 12. YUPELRI is indicated for the maintenance treatment of patients with COPD. It's the first and only once-daily, nebulized, long-acting muscarinic antagonist that provides a full 24 hours of control for patients. Last year, despite the headwinds created as a result of the global pandemic, YUPELRI recorded solid sales growth. Through the second quarter of 2021, the trend continues, and we remain optimistic given the significant patient opportunity for YUPELRI. As a reminder, Theravance Biopharma and Viatris co-promote in the U.S., with our combined sales infrastructure targeting healthcare professionals who treat COPD patients suitable for YUPELRI.

Theravance Biopharma commercial and medical field teams cover the hospital segment of healthcare providers, and Viatris covers community healthcare professionals. Also remember, the Viatris-Theravance Biopharma commercial partnership is a 65-35 profit share split. Slide 13 shows Theravance Biopharma's implied 35% share of net sales for YUPELRI during quarter two of 2021 of $14.6 million. Importantly, we saw YUPELRI sales pick up momentum throughout the quarter. Quarter two of 2021 net sales were up 13% from quarter one of 2021 and up 38% compared to quarter two of last year.

Turning to Slide 14. You can see that our share continues to grow both in the hospital and the community setting. As we've noted previously, many patients with COPD experience an acute respiratory episode serious enough to require a trip to the hospital for immediate care. The hospital then becomes a key point to assess a person with COPD and convert or switch them from their current medicine to YUPELRI. Data shows that many patients who receive YUPELRI in the hospital are discharged with a prescription to continue treatment, allowing for continuity of YUPELRI therapy postdischarge.

The Viatris and Theravance Biopharma teams continue to work effectively using several tools, tactics and coordination to convert appropriate patients from competitive products to YUPELRI during the hospital-to-outpatient experience. As evidenced by the share gain since launch, this strategy is effectively being executed by both companies' teams. Demand doses increased 13% second quarter over first quarter 2021 and 34% over second quarter of 2020. The impact of COVID on commercial efforts may be easing somewhat as states, local governments and institutions in some parts of the country are beginning to allow in-person meetings.

However, in-person access to customers as well as patient visits to HCPs remain below pre-pandemic levels. Approximately 62% of all COPD-targeted hospital accounts are physically accessible to our field colleagues. However, the TBPH sales team continues to leverage customer engagement opportunities via virtual meetings and phone interactions. In the second quarter, total HCP interactions grew by 16% over quarter one of 2021, with live face-to-face interactions reaching 39% of total interactions, the highest quarterly average since the pandemic began. We've also been encouraged with prescription activity through June.

Both new-to-brand Rxs and total Rxs have continued the upward growth that was reignited in late first quarter. In addition, hospitals continue to add YUPELRI to formularies, and new accounts are being added weekly. Looking specifically at the Theravance field sales deployment efforts in quarter two 2021. Doses sold exclusively in the hospital setting represented a 25% increase from the previous quarter. June hospital volume hit a new launch to date high, and we saw 127% year-over-year growth from June 2020. Quarter two of 2021 incremental volume growth was 47% from April to June, representing the highest in-quarter growth launched to date.

You can see this upward growth on Slide 15 progressing through the end of the second quarter. We also continue to track the key performance metrics since launch, and the following are the quarter two 2021 metrics. A total of 815 hospital accounts have ordered YUPELRI, and 69% of these accounts have ordered YUPELRI at least twice. Quarter two 2021 formulary wins totaled five, which equates to 446 formulary accounts launched to date with a formulary win rate of 91%. 85% of these formulary accounts purchased to date, owing to a lag between formulary approval and ordering commencing.

The medical science liaison's formulary support for presentations in quarter two 2021 was the highest since quarter one of 2019 when the brand was launched. In-person interactions by the MSL team were 3 times higher in quarter two versus quarter one but remained markedly below pre-pandemic levels. At the end of quarter two, YUPELRI's commercial coverage was 75%. So looking ahead, it's important to understand that according to the GOLD guidelines, a LAMA is foundational to COPD maintenance care.

The execution of our tactical plan will continue to leverage the guidelines in appropriate patient types, while we continue to optimize the marketing mix through rigorous and continued measurement of tactics. As Rick Winningham mentioned, we'll be initiating a Phase IV PIFR clinical study, which is aimed at helping to better inform decisions when physicians are designing a personalized COPD treatment plan with patients. YUPELRI has demonstrated resilience to many of the external factors, and we remain committed to continuing to bring this medicine to appropriate patients in the second half of this year and beyond.

So now I'll turn the call over to Andrew to review the financials.

Andrew A. Hindman -- Senior Vice President, Chief Financial Officer

Thanks, Frank. And before moving to Theravance Biopharma's quarterly financial highlights, let's start with an update on GSK's TRELEGY on Slide 17. As a reminder, TRELEGY is the first and only once-daily single inhaler triple combination therapy approved for the treatment of COPD and asthma. Theravance Biopharma is entitled to receive upward tiering royalties on global net sales of TRELEGY. At present, 75% of the income from our economic interest is pledged to service principal and interest payments on our outstanding 2035 nonrecourse notes, and the remaining 25% of income is retained by us.

We've received $46.3 million from TRC LLC during the first seven months of 2021. And during GSK's recent earnings call, they noted that TRELEGY continued to lead the market as a single inhaler triple therapy with Q2 2021 sales growth of over 68% over Q2 2020, generating global net sales of $405 million. Moving to Slide 18. Here, we provide our second quarter 2021 financial highlights compared to the second quarter 2020. R&D expenses for the second quarter were $51.1 million compared to $62.4 million in the second quarter of 2020. SG&A expenses for the second quarter were $25.9 million compared to $24.8 million in the second quarter of 2020. And as a reminder, all of these figures exclude share-based compensation.

In addition to those end of quarter financial highlights -- or second quarter highlights, during June, we closed a public offering of ordinary shares at a price to the public of $15 per share with gross proceeds of $115.6 million before deducting expenses. And we ended the second quarter with $265 million in cash and cash equivalents. Regarding financial guidance for the full year 2021, we are reiterating previously issued guidance. And now as for R&D, we expect to invest between $195 million to $225 million relative to actual R&D investment of $230 million in 2020. For SG&A, we provided a range of $80 million to $90 million relative to an actual SG&A expense of $77 million in 2020. And again, all of those figures exclude share-based compensation.

With that, I'll turn the call back to Rick for closing remarks.

Rick E Winningham -- Chairman and Chief Executive Officer

Thanks, Andrew. On Slide 19, we summarize what makes Theravance Biopharma valuable. We're a unique entity for a company our size with value drivers and include a mix of differentiated wholly owned compounds, coupled with strategic collaborations and partnerships. This includes our commercial partnership with Viatris to co-promote YUPELRI; in the second quarter -- or in the second full year since its launch, YUPELRI continued to experience solid net sales growth on an annual basis in 2020, which is a trend we're continuing to see in 2021; TRELEGY, for which we're entitled to receive upward tiering royalties on global net sales; our partnered pipeline with Janssen on izencitinib and TD5202 with a potential of up to $1 billion in milestone payments to TBPH plus profit sharing in the U.S. and double-digit royalties ex U.S.; and then finally, our wholly owned assets, several in later-stage development, ampreloxetine in Phase III and nezulcitinib in Phase II and several other key programs to address large patient populations.

When you add this to our in-house research and development capability plus U.S. commercial infrastructures that leverages analytics-driven deployment and has demonstrated success, we believe there's a strong case for value creation at Theravance Biopharma as we deliver key clinical data and YUPELRI commercial performance in the future.

In closing, on Slide 22, this quarter is critical to us as we look to deliver the data for izencitinib in ulcerative colitis and ampreloxetine in symptomatic nOH. These programs are value drivers and have the potential not only to be transformational to Theravance Biopharma but also to patients impacted by these diseases. Our mission to continue to develop medicines that make a difference and the progress of our clinical pipeline, along with YUPELRI and TRELEGY, demonstrate that we're working to make that a reality.

I'll now hand the call back over to the operator for questions. Operator?

Questions and Answers:

Operator

Thanks for taking my questions. [Operator Instructions] Our first question comes from the line of Geoff Porges from SVB Leerink.

Anna Baran -- SVB Leerink -- Analyst

This is Anna Baran on for Geoff Porges. First, can you remind us of the hurdle for statistically and clinically significant results from the ampreloxetine pivotal trial results coming up? And second, on cash, you ended the quarter with $265 million in cash and then put up a net loss of about $50 million, which presumably approximate cash burn. If you run those numbers out, you have less than six quarters of cash runway. Do you expect expenses to come down significantly at the end of the year? And could R&D be cut, let's say, in half once the current trials for ampreloxetine and izencitinib are completed?

Rick E Winningham -- Chairman and Chief Executive Officer

Yes. Rick, do you want to take the ampreloxetine questions? And Andrew will take the finance questions, and I'll close. Rick?

Richard A. Graham -- Senior Vice President, Development

Sure. Sounds good. Thanks for the question, Anna. For the -- you mentioned the hurdle with regard to statistical and clinical significance for ampreloxetine. With regard to the SEQUOIA study that we'll be reading out this -- in quarter three, the primary end point is a change in OHSA one from baseline. And what we have agreed to with regard to the end point with the FDA is a clinically meaningful change in OHSA one of one point. So it's a 10-point scale, and that's the primary end point for the SEQUOIA study.

Rick E Winningham -- Chairman and Chief Executive Officer

Yes, Andrew?

Andrew A. Hindman -- Senior Vice President, Chief Financial Officer

Sure. With respect to the question on the financial profile there, Anna, I guess there's two components that I would focus in on. Yes, the math, if you simply straight-line $265 million divided by about $50 million of cash utilization or investment during Q2, that gets you to about six months of "runway." However, that is an overly simplistic view of our business. Number one, we've been talking to investors and the sell-side for quite some time about the changing financial profile of our P&L. And this relates predominantly to an increased revenue growth and cash flow from both YUPELRI and TRELEGY that are becoming increasingly material contributors to our balance sheet.

And we've mentioned previously, and it is still true today, that the -- on a brand basis, YUPELRI is generating cash flow into Theravance Biopharma when we factor in our 35% profit split and all-in costs associated with commercialization of the brand, both shared costs with Viatris and then the nonshared commercial costs that we absorb 100% at Theravance Biopharma. So the source of cash flow generation from both YUPELRI and TRELEGY, even the 25% stake that is not used to pay down the 2035 notes, is becoming increasingly meaningful contributors to our balance sheet.

And then secondly -- and by the way, that trend is true today. It was true last year, and it will become increasingly true that YUPELRI and TRELEGY are net cash contributors to our balance sheet in 2022 and beyond. So six quarters out, five quarters out, four quarters out, the change in financial complexion is increasingly cash flow generation from nonfinancing sources. The other component that's very important to keep in mind is that while Janssen is our collaboration partner on izencitinib, they currently will have to make a decision once we generate the data packages both for UC and Crohn's and deliver those data packages.

After the receipt of the second data package for Crohn's, they will have approximately 90 days to decide if they want to enter into an exclusive global collaboration agreement. And if they choose to do so, they will pay us $200 million for an option payment. And that is going to be a significant source of additional capital that will extend our runway beyond 2023. So I hope that helps answer it with a bit of detail. But Rick Winningham, if I missed anything, please chime in.

Rick E Winningham -- Chairman and Chief Executive Officer

No. I think you covered everything adequately. We continue to have a robust research organization and translational science group that continues to deliver clinical assets into the clinic. And in some of those instances, those tests that we will enter into partnerships in certain regions of the world with those assets. So I think in total, that's a pretty complete complexion of both the financial picture as well as our expectations for ampreloxetine from the 169 study.

Anna Baran -- SVB Leerink -- Analyst

Very helpful, thank you.

Operator

Thank you. Our next question comes from the line of Marc Frahm from Cowen & Company. Your question please.

Marc Frahm -- Cowen & Company -- Analyst

Thanks for taking my questions. Maybe just on RHEA, can you remind us kind of what you would expect on the safety analysis just kind of on background rate of the key safety events like infections and thromboembolic events for a study population like RHEA and considering the limited follow-up that's in the Phase II portion?

Rick E Winningham -- Chairman and Chief Executive Officer

Yes. That's a great point, Marc. Rick, do you want to take that?

Richard A. Graham -- Senior Vice President, Development

Yes. Sure. Marc, so the RHEA study, and maybe I'll step back for a minute and just remind everybody that the program here is a seamless Phase IIb/III design. So the RHEA study is the IIb portion. And that's a dose-finding portion where we have three different dose levels relative to placebo. Patients that complete RHEA or the Phase IIb study roll into a 44-week maintenance study, so that's the Phase III portion. And then after we select the dose or more than one dose, we would initiate a second confirmatory induction study.

So I think what you are alluding to with regard to some of these adverse events of special interest, with a small sample size of 240 patients, we're probably not going to be able to prove definitively that izencitinib is not causing any unwarranted safety effects. But what we're going to be focusing on is adverse events of special interest like multidermatomal zoster, opportunistic infections, malignancy and thrombolytic events. So these are certainly JAK class events. But again, they have a relatively low adverse event rate.

We're going to be focused on those, and we'll report on those as we read out the trial. Some of the things that are more sensitive, though, that we do have confidence with the sample size of 240 to really hone in on the gut-selective nature of izencitinib are lab parameters like cholesterol and CPK. So these are things that we'll also be focused on to understand whether there's a gut-selective effect or not with regard to izencitinib on safety.

Rick E Winningham -- Chairman and Chief Executive Officer

And I think just to close off, Marc, obviously, the driver of the toxicity of the systemic JAKs is the concentration of the drug in the bloodstream and where that bloodstream carries the drug throughout the body. And obviously, our expectation in the Phase IIb study for izencitinib is to see extremely low concentrations of the drug in the bloodstream in contrast to the systemic JAK inhibitors.

Marc Frahm -- Cowen & Company -- Analyst

Okay. Great. That's helpful. And then maybe just a follow-up on the last question on cash burn. Can you just remind us kind of what the spend level is on kind of the early stage pipeline? That obviously doesn't get talked about a lot. And then kind of what the expectation would be assuming ampreloxetine trial is positive in terms of needing to build out the commercial organization to kind of support that filing and hopefully approval.

Andrew A. Hindman -- Senior Vice President, Chief Financial Officer

Yes. Marc, this is Andrew. The quick answer is everything that is what I would characterize as early development or research is not very much of our R&D spend. You could probably use Pareto assumptions to get to what I mean by that. And with respect to the commercial build-out, I mean, I'll take a stab at it and Frank Pasqualone can certainly correct me if I'm wrong. But we're looking -- and as we've talked about with investors for quite some time, we're looking with ampreloxetine, given that it's focused on a rare disease population, to build out our commercial infrastructure to rightsize the launch.

And of course, that will be based on finalizing the development time lines with the regulators once we have the study 169 results. And we will invest in the launch appropriately well in advance to ensure its success. But we will be leveraging existing investments that we're already making to support YUPELRI in the home office and in other areas of management and medical affairs. So the incremental investment to adequately support the launch of ampreloxetine will not be a material addition to our SG&A in total. But Frank?

Frank Pasqualone -- Senior Vice President, Chief Business Officer

Yes. No. Thanks, Andrew. I don't know if I have much to add to that. We'll take a very targeted approach. We are doing the work now to understand exactly where these patients are headed when they need help and what are those physicians that treat those patients. And we're going to focus very heavily on those as a start. And I'll just reiterate what Andrew said. We do plan to leverage the investment that we have in the commercial organization now. We're -- in some ways, we're a little bit inefficient with one product. We'll be able to leverage those investments much, much better going forward with two products in the bag.

Rick E Winningham -- Chairman and Chief Executive Officer

And just to conclude, the -- as other rare disease companies have done, obviously, the medical -- clinical team, that is our clinical liaisons that are in the field, those clinical liaisons will move over to augment the medical group that we currently have in the field. So that really gets at some of the points that are making about incremental investment.

Operator

Thank you. Our next question comes from the line of Liisa Bayko from Evercore ISI. Your question please.

Liisa Bayko -- Evercore ISI -- Analyst

Hi, thanks for taking my question. Can you maybe just elaborate a little bit more on -- you kind of had mentioned in your last comment that you're looking at various lab parameters -- sorry, lipid, I think you said, parameters to see if it's -- if izencitinib is indeed gut-selective. Can you maybe expand on a little bit more on that, what we should be looking for exactly?

Rick E Winningham -- Chairman and Chief Executive Officer

Yes. Rick?

Richard A. Graham -- Senior Vice President, Development

Yes. Sure, Liisa. So what I was meaning is that for the systemic JAK inhibitors across the board, it's been reported that there are changes in a relatively short amount of time in cholesterol, whether that's HDL or LDL. And then the other one is creatinine phosphokinase. So those are parameters that with a gut-selective JAK inhibitor like izencitinib, we don't expect to be targeting or modulating. So we'll take a close look at those because with a relatively small sample size, we should be able to discern whether or not there's a signal there.

Liisa Bayko -- Evercore ISI -- Analyst

Okay. So we would expect to see no changes or more modest changes? Or what's the goal?

Richard A. Graham -- Senior Vice President, Development

Yes. We would expect to see no changes in those parameters, again, that are relatively sensitive to systemic JAKs because we're not expecting to see high levels of izencitinib in the liver where these enzymes are synthesized or in the case of CPK, in the muscle.

Liisa Bayko -- Evercore ISI -- Analyst

Okay. Any more -- can you give us any more color on your kind of like timing in the quarter for the different studies or which one we should expect first? Should we read anything from like kind of the order in which you're discussing them? Just curious.

Rick E Winningham -- Chairman and Chief Executive Officer

No, I think nothing with any more granularity. I think izencitinib will read out first to be shortly followed by ampreloxetine, and that's the sequence that we'll roll out the data.

Liisa Bayko -- Evercore ISI -- Analyst

Okay. Great. And then can you talk about next step for your acute lung injury program?

Rick E Winningham -- Chairman and Chief Executive Officer

Sure. I mean, I'll start, and then Rick can chime in. We've begun to meet with regulators in Europe, and we'll meet with the regulators in the U.S., really focused on COVID as a part of acute lung injury and defining the sample size that we need for studies in acute lung injury, various types of acute lung injury going forward. Rick?

Richard A. Graham -- Senior Vice President, Development

Yes. The only thing I would add there, in addition to interactions with health authorities, which has been very helpful, we've been talking to a number of different groups that have platform trials. And so we're getting feedback and considering our options there as well.

Liisa Bayko -- Evercore ISI -- Analyst

Can you -- is acute lung injury -- how does that differ from ARDS? Or is that sort of the same thing?

Rick E Winningham -- Chairman and Chief Executive Officer

No. It's not the same thing. Usually, you see acute lung injury precede ARDS. That's the general clinical path that ARDS takes, and we would expect to be able to modulate acute lung injury that's related to the inflammatory cascade that -- like what we saw in the CRP subset with nezulcitinib. And I think that was a fairly important finding. And certainly, as we've shared the data with others, they've agreed with us that CRGP is -- sorry, the biomarker that we used was a very important point to cut off in terms of rates of inflammation alone. Rick?

Richard A. Graham -- Senior Vice President, Development

Yes. So I don't -- Liisa, if you remember, we had actually reported that we saw a meaningful reduction in 28-day all-cause mortality and time to recovery in patients with COVID who were treated with nezulcitinib and those that had a baseline C-reactive protein level of less than 150 milligram per liter. So that despite the fact that we didn't hit the primary end point on the ordinal scale, which is a tricky one to hit, and that's been true for other molecules in the space, we do believe that this change in mortality was meaningful.

Liisa Bayko -- Evercore ISI -- Analyst

Okay. Great. And then just final question from me. For ampreloxetine, can you describe any conversations with -- you've had with regulators that may indicate flexibility and how they're willing to consider the data? I just -- you look back at some of the approvals in the space, and you're kind of scratching your head. So I'm just wondering kind of what the bar is for you guys in nOH, and that's my last question.

Rick E Winningham -- Chairman and Chief Executive Officer

Yes. That's a great point. I think we've had a great relationship with the FDA on this application overall since we began the work in nOH. And it's because of the more or less paucity of data that exists for the existing agents and, in fact, the risk/benefit that's there for the existing agents. And Rick, do you want to provide even more color?

Richard A. Graham -- Senior Vice President, Development

Yes. It's important to step back again and think about the design of this body of work. So there's two pivotal trials. One is the SEQUOIA study, which will read out very shortly. And that's a four-week efficacy study, randomized 1:1, active drug ampreloxetine to placebo. Patients that finished SEQUOIA can then roll into a study that's called REDWOOD. This is a 16-week open-label study. So everybody gets active drug. And at the end of 16 weeks, they're randomized 1:1 again, active to placebo. And they're looking -- we're looking then for a worsening of effect in that randomized withdrawal period over six weeks.

So between the first study and the second, this is a very robust body of work to demonstrate the benefit and risk profile of ampreloxetine. Again, as Rick said, Liisa, we worked closely with the FDA on the design of this body of work. And we do expect that both studies are going to be required for a full approval. However, we will have a conversation with the FDA at the end of the SEQUOIA study with the data in hand and have an opportunity to have a conversation about the data. In particular, we would focus on a breakthrough therapy designation request, which is an opportunity for an expedited review of an NDA based on therapies that meet an unmet medical need.

Liisa Bayko -- Evercore ISI -- Analyst

Okay, great. Thank you.

Operator

Thank you. Our next question comes from the line of Douglas Tsao from H.C. Wainwright. Your question please.

Douglas Tsao -- H.C. Wainwright -- Analyst

Hi, good afternoon. Thanks for taking the questions. Just maybe as a starting point on YUPELRI, I'm just curious, I think you indicated that you -- the second quarter saw the most formulary presentation since launch. And was that just sort of improved access post-COVID? And how long should it take before we start to see those translate into wins and ultimately revenues?

Rick E Winningham -- Chairman and Chief Executive Officer

Yes. Frank, go ahead.

Frank Pasqualone -- Senior Vice President, Chief Business Officer

Okay. Yes. Thanks for the question. We -- on the MSL, the metric that we reported related to the MSLs, they were really -- had many, many requests from the field for formulary support presentations. And as I mentioned in the script, it was the highest quarterly amount since we launched the drug. We launched the drug in quarter one of 2019. So we were very pleased that, that's an indicator that the level of awareness and interest that the teams -- the field teams are generating is paying off for us. And we do measure the amount of time it takes from those first formulary presentations to a win and then also ordering.

Now I will tell you that the length of time has been lengthening since the pandemic began because obviously, these pulmonologists have a lot on their plate. And typically, even if you have everybody else shaking their head affirmatively for a formulary review, a pulmonologist has to weigh in very heavily in support of the drug. So the typical average time is somewhere between -- somewhere approaching three months. It's been as high as 90 days. It's been as low as 60 days. So I hope that answers your question, but it's just a tough metric to key in on right now because of the pandemic lengthening that cycle time for us.

Douglas Tsao -- H.C. Wainwright -- Analyst

No. That's very helpful. And just on nezulcitinib, in terms of -- it sounds like you're looking at sort of some of these bigger trials that are evaluating multiple products at a given time. I know the mortality benefit was quite compelling. Are you looking at that as potentially an end point versus one that is sort of more based on respiratory function?

Rick E Winningham -- Chairman and Chief Executive Officer

Yes. Rick, do you want to...

Richard A. Graham -- Senior Vice President, Development

Yes. Thanks, Doug. The general interest, as Rick has said, not just from Theravance Biopharma but from the stakeholders externally that we've shared the data with, has really been around the mortality benefit. So certainly, as you've said, with each of these platform trials, they have different objectives. And we're keeping our options open with regard to what makes sense for the next steps with nezulcitinib.

Douglas Tsao -- H.C. Wainwright -- Analyst

Okay, great. Thank you.

Operator

Thank you. Our next question comes from the line of Anupam Rama from JPMorgan. Your question please.

Anupam Rama -- JPMorgan -- Analyst

Hi guys, thanks so much for taking the question. Can you give us an update on sort of the latest that's ongoing with the arbitration with Innoviva? I think most recently, you've kind of made a response back to the courts. And I think you may be in a waiting phase for a response back. Maybe you just can give us an update there.

Rick E Winningham -- Chairman and Chief Executive Officer

Yes. Well, I think we've concluded the -- obviously concluded the second arbitration period, where our perspective is that there were certain guidelines relative to the usage of the royalties that became slightly more clear with the arbitrator's ruling. There are some just -- some particular parts of that ruling, we are in the middle of seeking clarity on those particular sections. I don't have anything to update one on at this point in time with regard to that. But we continue to watch the Innoviva management and the TRC royalty company quite closely such that the actions of Innoviva as manager are consistent with maximizing the value of the royalty stream for the partnership as well -- limited partnership as well as Theravance Biopharma. So that's about it on the arbitration.

Anupam Rama -- JPMorgan -- Analyst

Thanks so much.

Operator

Thank you. Our next question comes from the line of Vikram Purohit from Morgan Stanley. Your question please.

You might have your phone on mute.

Vikram Purohit -- Morgan Stanley -- Analyst

Hi, can you hear me now.

Operator

Yes.

Rick E Winningham -- Chairman and Chief Executive Officer

Yes.

Vikram Purohit -- Morgan Stanley -- Analyst

Okay, great. Great, thanks for taking my question. So I had one on the RHEA program. So it seems that the highest dose you're evaluating in the Phase IIb portion here is a bit lower than the dose that was evaluated in the Phase Ib portion. So I was wondering if you could just talk us through the thinking behind dose selection for the Phase IIb study.

Rick E Winningham -- Chairman and Chief Executive Officer

Rick?

Richard A. Graham -- Senior Vice President, Development

Yes. Sure, Vikram. So the Phase Ib study that we conducted in patients with moderately to severely active ulcerative colitis, we published in the Journal of Crohn's and Colitis recently. That study used doses of 20, 80 and 270 milligram. But that study was done with a powder and capsule formulation. It was literally just the active pharmaceutical ingredient put in a capsule. When we moved on to later stages of development, we wanted to move into a tablet formulation to start getting close to a commercial formulation. And this was just a practical matter. This wasn't with regard to a difference between 270 versus 200 milligram, which is our highest dose in the IIb. It was just that, that was a capsule size that we chose that could accommodate that load of 200 milligram. So we don't consider those to be markedly different.

Vikram Purohit -- Morgan Stanley -- Analyst

Okay. Understood. And I had a follow-on question on ampreloxetine. So I know that you mentioned that a one point difference is something you would consider clinically meaningful. But based on any conversations you've had with clinicians, what's your sense on durability? And how much duration of response would be clinically meaningful over some of the options that are currently on the market?

Rick E Winningham -- Chairman and Chief Executive Officer

Yes. Well, obviously, if we saw a change of that magnitude at four weeks versus placebo, that would be a meaningful difference for clinicians. And I think that showing it at four weeks, that duration is greater than what's been shown by droxidopa. And as Rick said, we're really shooting for two different objectives here. One of them is efficacy, both effect and duration of effect. And the second is safety with regard to supine hypertension. And that's -- both objectives we expect to be able to meet with the study 169 and then complement with the 170 study. Rick?

Richard A. Graham -- Senior Vice President, Development

Yes. Not really much to add other than unfortunately, for these patients, there isn't really anything that is good for their durability as it stands currently. So while they have some options, I think if you look at the package insert for droxidopa, for example, there was a one point change approximately from placebo at one week after treatment in their pivotal study. But that went away after one week. The other point about durability, though, is in the second study, which we'll report on later after a report on the SEQUOIA study.

But the second study really gets a bit at durability, which is the 16-week open-label followed by that six-week randomized withdrawal. So in totality, the data between both of these studies is really going to get at both the four-week efficacy and then the longer-term durability. In that randomized withdrawal study, it's also a one point change in OHSA 1, coupled with an end point on what's called PGI, which is a patient global impression score. So those two together make up the end point for 170 or the REDWOOD study.

Rick E Winningham -- Chairman and Chief Executive Officer

Yes. I think it's important to understand that the 169 and the 170, that they represent the largest data set that's been studied for symptomatic nOH with -- in a randomized setting. So we're -- as we've said before, we're very excited about completing 169 and taking a look at the 169 data status with regard to efficacy and safety.

Vikram Purohit -- Morgan Stanley -- Analyst

Okay. I understood. Thank you.

Operator

Thank you. Our next question comes from the line of Tazeen Ahmad from Bank of America. Your question please.

Tazeen Ahmad -- Bank of America -- Analyst

Good afternoon and thanks for taking my questions. Most of them have already been answered. But as it relates to izencitinib, you're going to have data in Q3 in ulcerative colitis and then more toward the end of the year and potentially early next year data in Crohn's. So my question is, just based on whatever results you show for ulcerative colitis, should we try to extrapolate based on that result what the data could look like for Crohn's? That's my first question. And then for YUPELRI, as it relates to this Phase IV study, and I'm sorry if I missed this in your prepared remarks, but could it increase your addressable patient population if run successfully? And if so, by how much?

Rick E Winningham -- Chairman and Chief Executive Officer

Sure. Both very good questions. I think the izencitinib data for ulcerative colitis will provide some guidance in Crohn's disease. But they are two different diseases, Crohn's being more transmural and involving, from a sort of geographic perspective, more of the intestinal tract potentially than ulcerative colitis. So we do believe that there's some information, obviously, that will be good for -- from the ulcerative colitis study to view Crohn's. But it is a different disease, and we'll -- given that we're getting very close to the end of the Crohn's program, we'll complete that Crohn's program and see what the data are as we unblind.

The second question on YUPELRI, that's a great point to bring up because there are some estimates that as many as one in five COPD patients have low peak inspiratory flow. And I think this has been an area of significant interest for Theravance for quite some time in addressing that particular population with nebulized therapy. Now there are many reasons why patients use a nebulizer: Dexterity issues, just certain -- the involvement of a caregiver, etc., the inability to, because of dexterity, to work, of course, a metered dose inhaler or, in fact, a dry powder inhaler.

But certainly, what we do see is we see some patients utilizing nebulization because they do have peak -- low peak inspiratory flow. And we're hopeful that this Phase IV program that we're running will be able to complement an earlier Phase II data set where we showed in patients with low to very low peak inspiratory flow, there was an advantage of YUPELRI in those patients. That was a small data set so, hence, the need to do the Phase IV confirmatory trial, and look to potentially expand the overall population that is addressable by a nebulized once-a-day medicine like YUPELRI. Frank, anything to add?

Frank Pasqualone -- Senior Vice President, Chief Business Officer

Yes. I think you hit most of the key points. There are a lot of patients that are on handheld agents that have dexterity issues. Separate from dexterity, they have coordination issues where you have to manipulate the handheld device. You have to breathe in deeply at just the right time as well as cognitive issues. The other thing is we're testing a bit of a hypothesis because previous nebulized agents maybe were not optimal in this patient population.

YUPELRI is the first once-a-day agent that provides a full 24 hours of control, and it takes about eight minutes in the morning and then you're good for the rest of the day until the following morning. And with a nebulized agent, you only have to execute tidal breathing as opposed to deep inhalations with a handheld device. So we look at this as an opportunity well worth investing in not only for the brand but particularly for the patients that potentially will be treated with YUPELRI with low PIFR.

Tazeen Ahmad -- Bank of America -- Analyst

Okay. And I know it's probably difficult to answer numerical questions. But just -- I don't know. Could it increase the patient population by 50%, more than that, less than that?

Rick E Winningham -- Chairman and Chief Executive Officer

Well, there's about 9% to 10% of patients that use nebulizers for maintenance therapy. And again, there's been some indication that one in five patients have low peak inspiratory flow. So you're looking at a fairly significant increase, I think 900,000 patients or something that use nebulizers for maintenance therapy with COPD. So this is a significant additional segment of the market.

However, I think what's exciting for us with YUPELRI is the progress that YUPELRI is making in the -- with our existing marketing strategy with Viatris and really targeting those patients who are underserved by either existing handheld therapy or, in fact, using short-acting agents and just not getting the benefit of the short-acting agents for an entire 24-hour period, like what is possible with YUPELRI.

So again, I do think this -- the way you're looking at it is right. This is really targeting to expand the size of the pie with YUPELRI, but we have a significant amount of work to do. And I think we can do that work successfully in positioning YUPELRI and increasing its share, continuing to increase its share in the existing market segment. Frank, anything there?

Frank Pasqualone -- Senior Vice President, Chief Business Officer

No. No, I think that's it. I don't have anything to add, Rick.

Tazeen Ahmad -- Bank of America -- Analyst

Okay, great. Thank you, Rick.

Operator

Thank you. Our final question for today comes from the line of Joseph Stringer from Needham & Company. question please.

Joseph Stringer -- Needham & Company -- Analyst

Hi, everyone. Thanks for taking my questions. Two from us. One, sort of on ampreloxetine and nOH, kind of related to the questions that have been asked earlier. Just curious, in your discussions with clinicians, with the available options and therapies out there, what's really the main sort of concern or main drawback that you can point to? I know there are several, but is it really efficacy-based, sort of durability of effect? Or is it safety-related in terms of supine hypertension?

And I guess where I'm going with this is if you had an efficacy result with ampreloxetine that's clinically relevant but similar to available therapies, but you have other safety such as lower supine hypertension, then could you -- do you think that, that would still translate into the ability to capture majority of the market share given sort of the current competitive dynamics?

And then second question is just beyond nOH and UC/Crohn's, what's a top program that we can look for in terms of advancing in the clinic or we could see clinical data from?

Rick E Winningham -- Chairman and Chief Executive Officer

Sure. Well, I'll just start with ampreloxetine. I think when you look at the market research is that physicians are looking for a therapy where they can be -- there can be a level of confidence with their patient that they're going to achieve durability of response and durability of response without potential titration with unknown consequences and certainly, in some instances, with that titration increasing, the risk of supine hypertension. This is -- and you look at the program of 169 and 170. This is the most significant body of evidence that's been developed for symptomatic nOH.

There won't -- there is not another compound that's used either on-label or off-label that has -- will have a data set like ampreloxetine. So the -- I think overall, it's simply the ability to deliver on the promise of a product and delivering efficacy without significantly increasing the risk of supine hypertension. I'll just tie it back to another product that -- where we're seeing success, and that's in YUPELRI. And if you look at the success of YUPELRI and -- with clinicians and the feedback loops that they get from patients, the root of YUPELRI's success is it delivers on its promise as a product.

And that's what we're seeking to achieve with ampreloxetine. So on the next significant clinical program, well, I think the significance, obviously, of the ampreloxetine 169 and 170 study, ulcerative colitis and Crohn's for izencitinib, these are very, very significant programs for us. And now we just announced another program, a Phase IV study in YUPELRI with low PIFR patients versus tiotropium. So that's likely to be the next.

But we remain quite excited about the inhaled JAK program, both inhaled from a dry powder inhaler as well as -- for a certain segment of the population as well as the acute use of a JAK inhibitor for acute lung injury caused by viral illnesses as well as the promise that we might have in both acute and chronic lung allograft dysfunction, i.e., transplant. So these -- all these programs are moving forward. But obviously, our focus is on right now, in the near term, which is the data on ampreloxetine and the data in ulcerative colitis.

Joseph Stringer -- Needham & Company -- Analyst

Great, thank you.

Operator

Thank you. This does conclude the question-and-answer session of today's program. I'd like to hand the program back to Mr. Winningham for any further remarks.

Rick E Winningham -- Chairman and Chief Executive Officer

Thank you, operator. And I'd like to thank everyone for joining us today. Obviously, we're on the eve of some very important data readouts for us in ulcerative colitis as well as symptomatic neurogenic orthostatic hypotension. And we continue to -- we're very excited by the continued strength that YUPELRI is showing even in the face of a continuing pandemic. And we look forward to updating you on these programs as the remainder of the year unfolds. So thank you very much for your time.

Operator

[Operator Closing Remarks]

Duration: 58 minutes

Call participants:

Gail Cohen -- Corporate Communications

Rick E Winningham -- Chairman and Chief Executive Officer

Richard A. Graham -- Senior Vice President, Development

Frank Pasqualone -- Senior Vice President, Chief Business Officer

Andrew A. Hindman -- Senior Vice President, Chief Financial Officer

Anna Baran -- SVB Leerink -- Analyst

Marc Frahm -- Cowen & Company -- Analyst

Liisa Bayko -- Evercore ISI -- Analyst

Douglas Tsao -- H.C. Wainwright -- Analyst

Anupam Rama -- JPMorgan -- Analyst

Vikram Purohit -- Morgan Stanley -- Analyst

Tazeen Ahmad -- Bank of America -- Analyst

Joseph Stringer -- Needham & Company -- Analyst

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