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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 10-Q

(Mark One)

☒

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2025

☐

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission file number: 001-36033

THERAVANCE BIOPHARMA, INC.

(Exact Name of Registrant as Specified in its Charter)


Cayman Islands		98-1226628
(State or Other Jurisdiction of		(I.R.S. Employer
Incorporation or Organization)		Identification No.)

C/O Theravance Biopharma US, LLC
901 Gateway Boulevard
South San Francisco, CA		94080
(Address of Principal Executive Offices)		(Zip Code)

(650) 808-6000

(Registrant’s Telephone Number, Including Area Code)

Securities registered pursuant to Section 12(b) of the Act:


Title of each class	Trading Symbol	Name of each exchange on which registered
Ordinary Share $0.00001 Par Value	TBPH	The Nasdaq Global Market

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large, accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.


Large Accelerated Filer ☐				Smaller Reporting Company ☒
Accelerated Filer ☐				Emerging Growth Company ☐
Non-accelerated Filer ☒

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

As of November 3, 2025, the number of the registrant’s outstanding ordinary shares was 50,672,431.

Table of Contents

THERAVANCE BIOPHARMA, INC.

TABLE OF CONTENTS


	Page No.
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements (unaudited)	3
Condensed Consolidated Balance Sheets as of September 30, 2025 and December 31, 2024	3
Condensed Consolidated Statements of Operations and Comprehensive Income (Loss) for the three and nine months ended September 30, 2025 and 2024	4
Condensed Consolidated Statements of Shareholders’ Equity for the three and nine months ended September 30, 2025 and 2024	5
Condensed Consolidated Statements of Cash Flows for the nine months ended September 30, 2025 and 2024	6
Notes to Condensed Consolidated Financial Statements	7
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations	19
Item 3. Quantitative and Qualitative Disclosures About Market Risk	29
Item 4. Controls and Procedures	29

PART II. OTHER INFORMATION
Item 1. Legal Proceedings	30
Item 1A. Risk Factors	31
Item 5. Other Information	64
Item 6. Exhibits	65
Signatures	66

Table of Contents

PART I. FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

THERAVANCE BIOPHARMA, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited)

(In thousands, except per share data)


	September 30,		December 31,
	2025		2024
Assets
Current assets:
Cash and cash equivalents	$	174,773	$	37,797
Short-term marketable securities		154,907		50,553
Receivables from collaborative arrangements		18,267		18,440
Receivables from milestones and royalty assets		—		50,000
Other prepaid and current assets		6,750		4,277
Total current assets		354,697		161,067
Long-term marketable securities		3,029		—
Property and equipment, net		6,257		7,418
Operating lease assets		25,450		28,354
Future contingent milestone and royalty assets		—		144,200
Restricted cash		836		836
Other assets		25,191		12,286
Total assets	$	415,460	$	354,161

Liabilities and Shareholders' Equity
Current liabilities:
Accounts payable	$	2,213	$	2,242
Accrued personnel-related expenses		10,330		7,019
Accrued clinical and development expenses		5,842		1,058
Accrued general and administrative expenses		2,699		2,987
Operating lease liabilities		10,914		10,712
Income tax payable		4,074		5,853
Other accrued liabilities		1,335		2,214
Total current liabilities		37,407		32,085
Long-term operating lease liabilities		33,681		39,108
Future royalty payment contingency		32,213		30,334
Unrecognized tax benefits		79,165		75,199
Other long-term liabilities		313		1,890
Commitments and contingencies (Note 11)

Shareholders’ Equity
Preferred shares, $0.00001 par value per share: 230 shares authorized, no shares issued or outstanding		—		—
Ordinary shares, $0.00001 par value per share: 200,000 shares authorized; 50,672 and 49,471 shares issued and outstanding at September 30, 2025 and December 31, 2024, respectively		1		—
Additional paid-in capital		1,153,299		1,141,060
Accumulated other comprehensive income		32		7
Accumulated deficit		(920,651)		(965,522)
Total shareholders’ equity		232,681		175,545
Total liabilities and shareholders’ equity	$	415,460	$	354,161

See accompanying notes to condensed consolidated financial statements.

Table of Contents

THERAVANCE BIOPHARMA, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS)

(Unaudited)

(In thousands, except per share data)


	Three Months Ended September 30,				Nine Months Ended September 30,
	2025		2024		2025		2024

Revenues:
Viatris collaboration agreement	$	19,990	$	16,868	$	54,073	$	45,627
Licensing revenue		—		—		7,500		—
Total revenues		19,990		16,868		61,573		45,627

Expenses:
Research and development (1)		8,112		9,268		30,054		28,190
Selling, general and administrative (1)		18,333		16,875		55,132		50,673
Impairment of long-lived assets (non-cash)		—		1,562		—		4,513
Total expenses		26,445		27,705		85,186		83,376

Loss from operations		(6,455)		(10,837)		(23,613)		(37,749)
Net gain on realized contingent milestone and royalty assets		—		—		75,137		—
Interest expense (non-cash)		(573)		(630)		(1,879)		(1,903)
Interest and other income, net		4,139		1,415		6,534		3,977
Income (loss) before income taxes		(2,889)		(10,052)		56,179		(35,675)
Provision for income tax benefit (expense)		6,504		(2,646)		(11,308)		(5,216)
Net income (loss)		3,615		(12,698)	$	44,871	$	(40,891)

Net unrealized gain on available-for-sale investments		42		72		25		115
Total comprehensive income (loss)	$	3,657	$	(12,626)	$	44,896	$	(40,776)

Net income (loss) per share:
Net income (loss) per share - basic	$	0.07	$	(0.26)	$	0.89	$	(0.84)
Net income (loss) per share - diluted	$	0.07	$	(0.26)	$	0.88	$	(0.84)

Shares used to compute net income (loss) per share - basic		50,520		49,038		50,137		48,690
Shares used to compute net income (loss) per share - diluted		51,908		49,038		50,976		48,690

(1)	Amounts include share-based compensation expense as follows:


	Three Months Ended September 30,				Nine Months Ended September 30,
(In thousands)	2025		2024		2025		2024
Research and development	$	1,080	$	1,111	$	3,137	$	3,727
Selling, general and administrative		3,496		3,852		10,859		11,840
Total share-based compensation expense	$	4,576	$	4,963	$	13,996	$	15,567

See accompanying notes to condensed consolidated financial statements.

Table of Contents

THERAVANCE BIOPHARMA, INC.

CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY

(Unaudited)

(In thousands)


						Accumulated
				Additional		Other				Total
	Ordinary Shares			Paid-In		Comprehensive		Accumulated		Shareholders'
	Shares	Amount		Capital		Income (Loss)		Deficit		Equity
Balances at June 30, 2025	50,361	$	1	$	1,149,123	$	(10)	$	(924,266)	$	224,848
Proceeds from the sale of ordinary shares	—		—		—		—		—		—
Employee share-based compensation expense	—		—		4,576		—		—		4,576
Issuance of restricted shares	337		—		—		—		—		—
Option exercises	25		—		278		—		—		278
Repurchase of shares to satisfy tax withholding	(51)		—		(678)		—		—		(678)
Net unrealized gain on marketable securities	—		—		—		42		—		42
Net income	—		—		—		—		3,615		3,615
Balances at September 30, 2025	50,672	$	1	$	1,153,299	$	32	$	(920,651)	$	232,681

						Accumulated
				Additional		Other				Total
	Ordinary Shares			Paid-In		Comprehensive		Accumulated		Shareholders'
	Shares	Amount		Capital		Income		Deficit		Equity
Balances at December 31, 2024	49,471	$	—	$	1,141,060	$	7	$	(965,522)	$	175,545
Proceeds from the sale of ordinary shares	2		—		20		—		—		20
Employee share-based compensation expense	—		—		13,996		—		—		13,996
Issuance of restricted shares	1,368		1		—		—		—		1
Option exercises	25		—		278		—		—		278
Repurchase of shares to satisfy tax withholding	(194)		—		(2,055)		—		—		(2,055)
Net unrealized gain on marketable securities	—		—		—		25		—		25
Net income	—		—		—		—		44,871		44,871
Balances at September 30, 2025	50,672	$	1	$	1,153,299	$	32	$	(920,651)	$	232,681

						Accumulated
				Additional		Other				Total
	Ordinary Shares			Paid-In		Comprehensive		Accumulated		Shareholders'
	Shares	Amount		Capital		Income (Loss)		Deficit		Equity
Balances at June 30, 2024	48,922	$	—	$	1,131,008	$	(22)	$	(937,297)	$	193,689
Proceeds from the sale of ordinary shares	3		—		25		—		—		25
Employee share-based compensation expense	—		—		4,963		—		—		4,963
Issuance of restricted shares	297		—		—		—		—		—
Repurchase of shares to satisfy tax withholding	(48)		—		(397)		—		—		(397)
Net unrealized gain on marketable securities	—		—		—		72		—		72
Net loss	—		—		—		—		(12,698)		(12,698)
Balances at September 30, 2024	49,174	$	—	$	1,135,599	$	50	$	(949,995)	$	185,654

						Accumulated
				Additional		Other				Total
	Ordinary Shares			Paid-In		Comprehensive		Accumulated		Shareholders'
	Shares	Amount		Capital		Income (Loss)		Deficit		Equity
Balances at December 31, 2023	48,091	$	—	$	1,122,164	$	(65)	$	(909,104)	$	212,995
Repurchase of ordinary shares, net of transaction costs	(38)		—		(445)		—		—		(445)
Proceeds from the sale of ordinary shares	8		—		69		—		—		69
Proceeds from ESPP purchases	45		—		375		—		—		375
Employee share-based compensation expense	—		—		15,567		—		—		15,567
Issuance of restricted shares	1,310		—		—		—		—		—
Repurchase of shares to satisfy tax withholding	(242)		—		(2,131)		—		—		(2,131)
Net unrealized gain on marketable securities	—		—		—		115		—		115
Net loss	—		—		—		—		(40,891)		(40,891)
Balances at September 30, 2024	49,174	$	—	$	1,135,599	$	50	$	(949,995)	$	185,654

See accompanying notes to condensed consolidated financial statements.

Table of Contents

THERAVANCE BIOPHARMA, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

(In thousands)


	Nine Months Ended September 30,
	2025		2024
Operating activities
Net income (loss)	$	44,871	$	(40,891)
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:
Depreciation and amortization		1,227		1,288
Amortization and accretion on investment securities, net		(1,520)		(1,729)
Future royalty payment contingency interest accretion		1,879		1,903
Share-based compensation		13,996		15,567
Loss on disposal of property and equipment		35		(129)
Loss on impairment of long-lived assets		—		4,513
Amortization of right-of-use assets		2,908		3,361
Deferred income taxes		(11,549)		(984)
Other		(95)		—
Changes in operating assets and liabilities:
Receivables from collaborative and licensing arrangements		173		629
Receivables from milestones and royalty assets		50,000		—
Prepaid clinical and development services		73		1,441
Other prepaid and current assets		(2,546)		3,926
Right-of-use lease assets		(4)		(634)
Future contingent milestone and royalty assets		144,200		—
Other assets		(1,328)		533
Accounts payable		(29)		(38)
Accrued personnel-related expenses, accrued clinical and development expenses, and other accrued liabilities		5,284		(1,523)
Operating lease liabilities		(5,225)		(4,178)
Unrecognized tax benefits		3,966		6,269
Income tax payable		(1,779)		—
Other long-term liabilities		68		43
Net cash provided by (used in) operating activities		244,605		(10,633)

Investing activities
Purchases of property and equipment		(34)		(142)
Purchases of marketable securities		(183,288)		(103,022)
Maturities of marketable securities		77,450		99,762
Net cash used in investing activities		(105,872)		(3,402)

Financing activities
Ordinary share repurchases		—		(445)
Proceeds from the sale of ordinary shares		20		69
Proceeds from ESPP purchases		—		375
Proceeds from option exercises		278		—
Repurchase of shares to satisfy tax withholding		(2,055)		(2,131)
Net cash used in financing activities		(1,757)		(2,132)

Net increase (decrease) in cash, cash equivalents, and restricted cash		136,976		(16,167)
Cash, cash equivalents, and restricted cash at beginning of period		38,633		40,381
Cash, cash equivalents, and restricted cash at end of period	$	175,609	$	24,214

Supplemental disclosure of cash flow information
Cash paid for income taxes, net	$	21,674	$	12

See accompanying notes to condensed consolidated financial statements.

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THERAVANCE BIOPHARMA, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

1. Organization and Summary of Significant Accounting Policies

Theravance Biopharma, Inc. (“Theravance Biopharma” or the “Company”) is a biopharmaceutical company primarily focused on the development and commercialization of medicines. The Company’s focus is to deliver medicines that make a difference^® in people's lives.

Basis of Presentation

The Company’s condensed consolidated financial statements as of September 30, 2025 and for the three and nine months ended September 30, 2025 are unaudited but include all adjustments (consisting only of normal recurring adjustments), which are considered necessary for a fair presentation of the financial position at such date and of the operating results and cash flows for those periods, and have been prepared in accordance with United States (“US”) generally accepted accounting principles (“GAAP”) for interim financial information. Accordingly, they do not include all of the information and notes required by GAAP for complete financial statements. The accompanying unaudited condensed consolidated financial statements should be read in conjunction with the audited consolidated December 31, 2024 financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2024, filed with the Securities and Exchange Commission (“SEC”) on March 7, 2025.

The results for the three and nine months ended September 30, 2025 are not necessarily indicative of the results to be expected for the year ending December 31, 2025, or for any other interim period or for any future period. These condensed consolidated financial statements include the accounts of the Company and its subsidiaries, and intercompany transactions and balances have been eliminated.

Use of Estimates

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses, and related disclosures in the condensed consolidated financial statements and accompanying notes. Management bases its estimates on historical experience and on assumptions believed to be reasonable under the circumstances. Due to the inherent uncertainty in making estimates, actual results could differ materially from those estimates.

Liquidity and Capital Resources

The Company expects its cash, cash equivalents, and marketable securities will be sufficient to fund its operations for at least the next twelve months from the issuance date of these condensed consolidated financial statements based on current operating plans and financial forecasts.

Significant Accounting Policies

Other than revisions to the “Future Contingent Milestone and Royalty Assets” accounting policy below, there have been no material revisions in the Company’s significant accounting policies described in Note 1 to the consolidated financial statements included in its Annual Report on Form 10-K as of and for the year ended December 31, 2024.

Future Contingent Milestone and Royalty Assets

Future contingent milestone and royalty assets (“Contingent Consideration”) on the Company’s consolidated balance sheets was initially measured at fair value in July 2022 utilizing a Monte Carlo simulation model to calculate the present value of the risk-adjusted cash flows estimated to be received from the Contingent Consideration. The fair value model involved significant unobservable inputs derived using Company estimates. The Company’s estimates were based in part on external data and reflected its judgements and forecasts. The primary significant unobservable input was the estimate of forecasted TRELEGY^® ELLIPTA (“TRELEGY”) net revenues which is considered a Level 3 fair value input.

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After initial recognition of the Contingent Consideration at fair value on the consolidated balance sheets, the Contingent Consideration was subsequently accounted for under Accounting Standards Codification (“ASC”) Topic 450, Contingencies. Subsequent gains to be recognized on the Contingent Consideration asset are recognized using the gain contingency guidance in ASC 450-30, Gain Contingencies, and subsequent impairments to the Contingent Consideration asset are recognized using the impairment guidance in ASC 450-20, Accounting for Loss Contingencies.

Accordingly, the Contingent Consideration’s carrying value is reduced in the period when milestone or royalty payments are realizable, which are based on TRELEGY’s global net sales. Furthermore, the Contingent Consideration asset was fully settled through the Royalty Sales Agreement, which resulted in the assignment of the TRELEGY royalties to GSK (see “Note 7. Net Gain on Realized Contingent Milestone and Royalty Assets” for more information). This transaction was accounted for under ASC 450-30 and was recognized using the gain contingency model. Any future milestone payments that are realized or realizable will continue to be recognized under the gain contingency guidance in ASC 450-30.

Recently Issued Accounting Pronouncements Not Yet Adopted

In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures (“ASU 2023-09”). ASU 2023-09 requires public entities to provide additional information in their tax rate reconciliation and additional disclosures about income taxes paid by jurisdiction. ASU 2023-09 is effective on a prospective basis for annual periods beginning after December 15, 2024. The Company is evaluating the impact of adopting ASU 2023-09 on its consolidated financial statements income tax disclosures.

In November 2024, the FASB issued ASU 2024-03, Income Statement – Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40) (“ASU 2024-03”). ASU 2024-03 modifies the rules on income statement disclosures to enhance the transparency of and include more detailed information about the types of expenses, including purchases of inventory, employee compensation, depreciation, amortization, and depletion, in commonly presented expense captions such as cost of sales, research and development, and selling, general and administrative expenses. ASU 2024-03 is effective for annual periods beginning after December 15, 2026. All entities should apply the guidance prospectively, but have the option to apply it retrospectively, and early adoption is permitted. The Company is evaluating the impact of adopting ASU 2024-03 on its consolidated financial statements and related disclosures.

The Company has evaluated other recently issued accounting pronouncements and does not currently believe that any of these pronouncements will have a material impact on its consolidated financial statements and related disclosures.

2. Earnings per Share

Basic net income (loss) per share is computed by dividing net income (loss) by the weighted-average number of shares outstanding during the period. Diluted net income per share is computed by increasing the weighted-average number of shares outstanding for the dilutive effect of potential ordinary shares. The Company’s potential ordinary shares include outstanding options to purchase ordinary shares and restricted share units (“RSUs”), including market-based and performance-contingent awards. Basic and diluted net income (loss) per share for the three and nine months ended September 30, 2025 and 2024 was as follows:


	Three Months Ended September 30,				Nine Months Ended September 30,
(In thousands, except per share data)	2025		2024		2025		2024
Numerator:
Net income (loss)	$	3,615	$	(12,698)	$	44,871	$	(40,891)

Denominator:
Weighted-average ordinary shares outstanding - basic		50,520		49,038		50,137		48,690
Dilutive effect of options and awards		1,388		—		839		—
Weighted-average ordinary shares outstanding - diluted		51,908		49,038		50,976		48,690

Net income (loss) per share:
Net income (loss) per share - basic	$	0.07	$	(0.26)	$	0.89	$	(0.84)
Net income (loss) per share - diluted	$	0.07	$	(0.26)	$	0.88	$	(0.84)

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Securities excluded from the computation of diluted net income per share because their effect would have been anti-dilutive consist of 0.9 million outstanding service-based options and 0.7 million of RSUs, market-based RSUs, and performance-based RSUs as of September 30, 2025.

In accordance with ASC Topic 260, Earnings Per Share, if a company incurred a net loss, then potential ordinary shares are considered anti-dilutive for the periods in which the net loss was recognized. For the three and nine months ended September 30, 2024, the Company recognized net losses. As a result, the potential ordinary shares were not included in the computation of diluted net loss per share for the three and nine months ended September 30, 2024, as presented above, due to their anti-dilutive effects. See “Note 9. Share-Based Compensation” for information related to outstanding options and RSUs as of September 30, 2024.

3. Revenue

Revenue from Collaborative Arrangements

Viatris

In January 2015, the Company and Viatris Inc. (“Viatris”) established a strategic collaboration (the “Viatris Agreement”) for the development and commercialization of revefenacin, including YUPELRI^® (revefenacin) inhalation solution. The Company entered into the collaboration to expand the breadth of its revefenacin development program and extend its commercial reach. In November 2018, YUPELRI was approved by the US Food and Drug Administration (the “FDA”) for the maintenance treatment of patients with chronic obstructive pulmonary disease (“COPD”). In June 2025, YUPELRI received regulatory approval by China’s National Medical Products Administration (“NMPA”) which triggered a $7.5 million milestone from Viatris to the Company. The milestone amount was recognized as “licensing revenue” on the condensed consolidated statements of operations for the nine months ended September 30, 2025, as the milestone was variable consideration that became no longer constrained.

In the US, Viatris is leading the commercialization of YUPELRI, and the Company co-promotes the product under a profit and loss sharing arrangement (65% to Viatris; 35% to the Company). Outside the US (excluding China and adjacent territories), Viatris is responsible for development and commercialization and will pay the Company a tiered royalty on net sales at percentage royalty rates ranging from low double-digits to mid-teens. Viatris also holds exclusive development and commercialization rights to nebulized revefenacin in China and adjacent territories, which include the Hong Kong SAR, the Macau SAR, and Taiwan (collectively, the “China Region”), and the Company is eligible to receive tiered royalties ranging from 14% to 20% on net sales of nebulized revefenacin in the China Region. Viatris is responsible for all aspects of development and commercialization in the China Region, including pre- and post-launch activities and product registration and all associated costs. Viatris is the principal in the YUPELRI sales transactions, and as a result, the Company does not reflect the product sales in its condensed consolidated financial statements.

As of September 30, 2025, the Company is eligible to receive from Viatris potential global sales and regulatory milestone payments (excluding the China Region) up to $205.0 million in the aggregate, with $160.0 million associated with YUPELRI monotherapy and $45.0 million associated with future potential combination products. Of the $160.0 million associated with monotherapy, $150.0 million relates to sales milestones based on achieving certain levels of US net sales and $10.0 million relates to regulatory actions in the European Union (“EU”). The Company is also eligible to receive additional potential sales and regulatory milestones up to $45.0 million related to Viatris’ development and commercialization of nebulized revefenacin in the China Region with $37.5 million associated with YUPELRI monotherapy and $7.5 million associated with future potential combination products. The $37.5 million relates to sales milestones based on achieving certain levels of net sales in the China Region, and the $7.5 million relates to achieving regulatory milestones.

The Viatris Agreement is considered to be within the scope of ASC 808, Collaborative Arrangements, as the parties are active participants and exposed to the risks and rewards of the collaborative activity with a unit of account provided to Viatris as a customer. Under the terms of the Viatris Agreement, which included the delivery by the Company of a license to Viatris to develop and commercialize revefenacin, Viatris was responsible for reimbursement of the Company’s costs related to the registrational program up until the approval of the first new drug application in

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November 2018; thereafter, R&D expenses are shared by both parties according to the profit and loss sharing percentages noted above. Performing R&D services for reimbursement is considered a collaborative activity under the scope of ASC 808. Reimbursable program costs are recognized proportionately with the performance of the underlying services and accounted for as reductions to R&D expense. For this unit of account, the Company did not recognize revenue or analogize to ASC 606, Revenue Recognition, and, as such, the reimbursable program costs are excluded from the original transaction price.

The future potential milestone amounts for the Viatris Agreement were not included in the original transaction price, as they were all determined to be fully constrained following the concepts of ASC 606. As part of the Company’s evaluation of the development and regulatory milestones constraint, the Company determined that the achievement of such milestones is contingent upon success in future clinical trials and regulatory approvals which are not within its control and uncertain at this stage. The Company expects that the sales-based milestone payments and royalty arrangements will be recognized when the sales occur or the milestone is achieved.

Following the FDA approval of YUPELRI in November 2018, net amounts payable to or receivable from Viatris each quarter under the profit-sharing structure are disaggregated according to their individual components. In accordance with the applicable accounting guidance, amounts receivable from Viatris in connection with the commercialization of YUPELRI are recorded within the condensed consolidated statements of operations as revenue from “Viatris collaboration agreement” irrespective of whether the overall collaboration is profitable.

The following YUPELRI-related amounts were recognized within revenue in the Company’s condensed consolidated statements of operations:


	Three Months Ended September 30,				Nine Months Ended September 30,
(In thousands)	2025		2024		2025		2024
Viatris collaboration agreement – Amounts receivable from Viatris	$	19,990	$	16,868	$	54,073	$	45,627
Licensing revenue – China Region regulatory approval milestone		—		—		7,500		—
Total	$	19,990	$	16,868	$	61,573	$	45,627

While Viatris records total YUPELRI net sales within its own consolidated financial statements, Viatris collaboration agreement revenue on the Company’s condensed consolidated statements of operations included the Company’s implied 35% share of total YUPELRI net sales, before deducting shared commercial expenses, as presented below:


	Three Months Ended September 30,				Nine Months Ended September 30,
(In thousands)	2025		2024		2025		2024
YUPELRI net sales (Theravance Biopharma implied 35%)	$	24,977	$	21,766	$	68,613	$	60,181

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4. Segment Information

The Company operates in a single segment, which is the development and commercialization of human therapeutics. The Company has determined that its chief executive officer is the Chief Operating Decision Maker (“CODM”). When evaluating the Company’s financial performance, the CODM reviews total revenues and total expenses and makes financial decisions using this information on a consolidated net income (loss) basis. The measure of segment assets is the Company’s total assets which is reported on the condensed consolidated balance sheets. The Company’s segment revenue and long-lived assets are primarily generated and maintained in the US.

The following table summarizes significant segment expenses:


	Three Months Ended September 30,				Nine Months Ended September 30,
(In thousands)	2025		2024		2025		2024
Viatris collaboration agreement	$	19,990	$	16,868	$	54,073	$	45,627
Licensing revenue		—		—		7,500		—
Total revenue		19,990		16,868		61,573		45,627

Employee-related (Research and development) ¹		2,790		2,829		10,256		9,345
External-related (Research and development)		3,453		4,448		14,209		12,658
Facilities and other allocated expenses (Research and development)		789		880		2,452		2,460
Supporting general and administration functions ¹		7,481		6,581		22,960		20,295
Sales and marketing, and medical affairs ¹		7,356		6,442		21,313		18,538
Share-based compensation		4,576		4,963		13,996		15,567
Total recurring operating expenses		26,445		26,143		85,186		78,863
Impairment of long-lived assets		—		1,562		—		4,513
Total operating expenses		26,445		27,705		85,186		83,376
Loss from operations		(6,455)		(10,837)		(23,613)		(37,749)
Net gain on realized contingent milestone and royalty assets		—		—		75,137		—
Interest expense (non-cash)		(573)		(630)		(1,879)		(1,903)
Interest and other income, net		4,139		1,415		6,534		3,977
Provision for income tax benefit (expense)		6,504		(2,646)		(11,308)		(5,216)
Net income (loss)	$	3,615	$	(12,698)	$	44,871	$	(40,891)

¹Excludes share-based compensation

5. Cash, Cash Equivalents, and Restricted Cash

The following table provides a reconciliation of cash, cash equivalents, and restricted cash reported within the current period and comparable prior year period condensed consolidated balance sheets that sum to the total of the same such amounts shown on the condensed consolidated statements of cash flows.


	September 30,
(In thousands)	2025		2024
Cash and cash equivalents	$	174,773	$	23,378
Restricted cash		836		836
Total cash, cash equivalents, and restricted cash	$	175,609	$	24,214

The Company maintains restricted cash for certain lease agreements and letters of credit by which the Company has pledged cash and cash equivalents as collateral. The cash-related amounts reported in the table above exclude the Company’s investments in short-term marketable securities that are reported separately on the condensed consolidated balance sheets.

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The increase in cash and cash equivalents, as of September 30, 2025, compared to the prior year comparable period was primarily due to (i) proceeds of $225.0 million from the sale of TRELEGY royalties, received in June 2025 (see “Note 7. Net Gain on Realized Contingent Milestone and Royalty Assets” for more information) and (ii) a $50.0 million milestone payment from Royalty Pharma Investments, received in February 2025, associated with the achievement of certain minimum royalty payments related to 2024 TRELEGY global net sales.

The Company periodically engages in foreign exchange transactions as a part of its operations. The Company recognized net realized and unrealized foreign currency losses were immaterial for the three and nine months ended September 30, 2025 and 2024, respectively. These amounts are included in the Company’s condensed consolidated statements of operations within “Interest income and other income, net”.

6. Investments and Fair Value Measurements

Available-for-Sale Securities

The estimated fair value of marketable securities is based on quoted market prices for these or similar investments obtained from a commercial pricing service. The fair market value of marketable securities classified within Level 1 is based on quoted prices for identical instruments in active markets. The fair value of marketable securities classified within Level 2 is based on quoted prices for similar instruments in active markets; quoted prices for identical or similar instruments in markets that are not active; or model-driven valuations whose inputs are observable or whose significant value drivers are observable. Observable inputs may include benchmark yields, reported trades, broker/dealer quotes, issuer spreads, two-sided markets, benchmark securities, bids, offers, and reference data including market research publications.

Available-for-sale securities are summarized below:


		September 30, 2025
				Gross		Gross
		Amortized		Unrealized		Unrealized		Estimated
(In thousands)		Cost		Gains		Losses		Fair Value
US government securities	Level 1	$	140,932	$	36	$	—	$	140,968
Corporate notes	Level 2		17,132		—		(8)		17,124
Commercial paper	Level 2		45,862		7		(3)		45,866
Marketable securities			203,926		43		(11)		203,958
Money market funds	Level 1		120,521		—		—		120,521
Total		$	324,447	$	43	$	(11)	$	324,479


		December 31, 2024
				Gross		Gross
		Amortized		Unrealized		Unrealized		Estimated
(In thousands)		Cost		Gains		Losses		Fair Value
US government securities	Level 1	$	17,306	$	8	$	—	$	17,314
Corporate notes	Level 2		5,431		1		(1)		5,431
Commercial paper	Level 2		35,285		1		(2)		35,284
Marketable securities			58,022		10		(3)		58,029
Money market funds	Level 1		550		—		—		550
Total		$	58,572	$	10	$	(3)	$	58,579

As of September 30, 2025, all of the Company’s available-for-sale securities had contractual maturities within 18 months, and the weighted-average maturity of marketable securities was approximately two months. There were no transfers between Level 1 and Level 2 during the periods presented, and there have been no material changes to the Company’s valuation techniques during the three and nine months ended September 30, 2025.

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Available-for-sale securities with unrealized losses as of September 30, 2025 are summarized below:


	September 30, 2025
	Less than 12 Months				Greater than 12 Months				Total
			Gross				Gross				Gross
	Estimated		Unrealized		Estimated		Unrealized		Estimated		Unrealized
(In thousands)	Fair Value		Losses		Fair Value		Losses		Fair Value		Losses
Corporate notes	$	16,079	$	(8)	$	—	$	—	$	16,079	$	(8)
Commercial paper		26,086		(3)		—		—		26,086		(3)
Total	$	42,165	$	(11)	$	—	$	—	$	42,165	$	(11)

Available-for-sale securities with unrealized losses as of December 31, 2024 are summarized below:


	December 31, 2024
	Less than 12 Months				Greater than 12 Months				Total
			Gross				Gross				Gross
	Estimated		Unrealized		Estimated		Unrealized		Estimated		Unrealized
(In thousands)	Fair Value		Losses		Fair Value		Losses		Fair Value		Losses
Corporate notes	$	4,114	$	(1)	$	—	$	—	$	4,114	$	(1)
Commercial paper		18,883		(2)		—		—		18,883		(2)
Total	$	22,997	$	(3)	$	—	$	—	$	22,997	$	(3)

The Company invests primarily in high credit quality and short-term maturity debt securities with the intent to hold such securities until maturity at par value. The Company does not intend to sell the investments that are currently in an unrealized loss position, and it is unlikely that it will be required to sell the investments before recovery of their amortized cost basis, which may be at maturity. The Company reviewed its available-for-sale debt securities and determined that there were no credit-related losses to be recognized as of September 30, 2025, and there were no individual securities that were in a significant unrealized loss position as of September 30, 2025.

For the three and nine months ended September 30, 2025 and 2024, the Company did not sell any marketable securities.

Ampreloxetine Funding

The Company recognizes a contingent liability related to funding received from Royalty Pharma in exchange for certain future royalty rights to ampreloxetine. The contingent liability consists of an upfront $25.0 million received in July 2022 and management’s estimate of (i) a risk-adjusted future contingent $15.0 million milestone; and (ii) the amount and timing of royalties to be paid to Royalty Pharma and then discounted over the life of the arrangement using an imputed rate of interest. The excess of future estimated royalty payments over the amount of cash funding received is recognized as interest expense using the effective interest method. The balance associated with the contingent liability was initially recorded as $25.0 million, net of allocated transaction costs, in July 2022 and is reported on the condensed consolidated balance sheets as “Future royalty payment contingency”.

The Company periodically reassesses the amount and timing of estimated royalty payments. To the extent such payments are materially greater or less than the Company’s previous estimates, the Company will prospectively adjust the amortization of the contingent liability and the effective interest rate. The imputed effective rate of interest on the unamortized portion of the contingent liability was approximately 6.9% as of September 30, 2025.

There are a number of factors that could materially affect the amount and timing of the contingent $15.0 million milestone and royalty payments, some of which are not within the Company’s control. Such factors include, but are not limited to, changes in the projected market size, the introduction of competing products, patent protection matters, and regulatory product approval for ampreloxetine. The contingent liability was recognized using significant unobservable inputs. These inputs were derived using internal management estimates and reflect management’s judgements and forecasts. The significant unobservable inputs include the forecasted revenues, the probability and timing of the regulatory milestone, and the expected term of the royalty stream, as well as the overall probability of ampreloxetine’s success. These estimates are considered Level 3 fair value inputs. A significant change in certain unobservable inputs,

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such as the probability of ampreloxetine’s success, could result in a material increase or decrease to the effective interest rate of the contingent liability. If ampreloxetine regulatory approval is not achieved or if ampreloxetine sales are never recognized, the contingent liability recognized would be extinguished as the Company would not be obligated to repay any of the funding amounts received from Royalty Pharma.

Changes to the contingent liability were as follows for the nine months ended September 30, 2025:


(In thousands)
Balance at December 31, 2024	$	30,334
Non-cash interest expense accretion		1,879
Balance at September 30, 2025	$	32,213

Contract Derivative

On December 27, 2024, the Company purchased a contract derivative to manage its exposure to financial risk and to mitigate potential tax liability. The Company determined that the contract derivative met the definition of a derivative under ASC Topic 815, Derivatives and Hedging.

The contract derivative is measured at fair value using the discounted cash flow method and includes unobservable inputs derived from management’s estimates and assumptions. Management’s estimates and assumptions are based in part on external data and internal data and involve a significant degree of judgment. The primary unobservable inputs, classified as Level 3 under the fair value hierarchy, include the remote possibility of a future payout of taxes. The original discount rate utilized in the fair value model was 5.5%, as of December 27, 2024 and December 31, 2024.

The contract derivative was recognized within non-current other assets on the condensed consolidated balance sheets and changes to the contract derivative fair value were as follows for the nine months ended September 30, 2025:


(In thousands)
Balance at December 31, 2024	$	2,292
Unrealized gain		97
Balance at September 30, 2025	$	2,389

For the nine months ended September 30, 2025, the increase in the contract derivative’s fair value was driven by a decrease in the estimated discount rate to 4.8% as of September 30, 2025, and an unrealized gain was recognized within interest and other income, net on the condensed consolidated statements of operations.

7. Net Gain on Realized Contingent Milestone and Royalty Assets

The Company recognized future contingent milestone and royalty assets related to the sale of its equity interests in Theravance Respiratory Company, LLC (“TRC”) to Royalty Pharma Investments 2019 ICAV, an Irish collective asset-management vehicle (“Royalty Pharma”), in July 2022 (the “TRC Transaction”). The future contingent milestone and royalty assets represented the fair value of potential future milestone payments and royalties related to worldwide net sales of GSK plc’s (“GSK”) TRELEGY as described below.

From and after January 1, 2023, for any calendar year starting with the year ended December 31, 2023 and ending with the year ending December 31, 2026, upon certain milestone minimum royalty amounts for TRELEGY being met, Royalty Pharma is obligated to make certain cash payments to the Company, which are not to exceed $250.0 million in aggregate (the “Milestone Payments”). Additionally, the Company was eligible to receive from Royalty Pharma 85% of the royalty payments on TRELEGY payable by GSK (a) for sales or other activities occurring on and after January 1, 2031 related to TRELEGY in the US, and (b) for sales or other activities occurring on and after July 1, 2029 related to TRELEGY outside of the US (the “Royalties”).

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The future contingent milestone and royalty assets were initially measured at fair value utilizing a Monte Carlo simulation model to calculate the present value of the risk-adjusted cash flows estimated to be received from the future contingent milestone and royalty assets. The fair value model involved significant unobservable inputs derived using management’s estimates. Management’s estimates were based in part on external data and reflected management’s judgements and forecasts. The primary significant unobservable input was the estimate of forecasted TRELEGY net sales which is considered a Level 3 fair value input. In July 2022, the Company estimated the fair value of the future contingent milestone and royalty assets to be $194.2 million, and the discount rate utilized in the valuation model was 7.83%. While the $194.2 million was comprised of two components: (i) Milestone Payments and (ii) Royalties, the Company accounted for the future contingent milestone and royalty assets as a combined single unit of account. As a result, the Company would not recognize any income associated with any potential future contingent milestone and royalty assets payments until the cumulative payments received exceeded the original $194.2 million fair value.

In February 2025, the Company received a $50.0 million Milestone Payment from Royalty Pharma, which was the maximum that the Company could have received, upon achieving certain milestone minimum royalty amounts that were met related to 2024 TRELEGY global net sales. Following the receipt of the $50.0 million, the remaining aggregate Milestone Payments available to the Company totaled $150.0 million, and the remaining fair value of the future contingent milestone and royalty assets was $144.2 million as of March 31, 2025.

On May 30, 2025, the Company entered into a definitive agreement to assign the Royalties to GSK for a one-time upfront payment of $225.0 million (the “Royalty Sales Agreement”) while retaining its right to receive the remaining potential $150.0 million in Milestone Payments from Royalty Pharma. The Company received the $225.0 million cash payment from GSK on June 27, 2025. The gain on the sale of the Royalties, for the nine months ended September 30, 2025, was presented as “net gain on realized contingent milestone and royalty assets” on the condensed consolidated statements of operations and was determined as follows:


(In thousands)
Cash proceeds	$	225,000
Less:
Future contingent milestone and royalty assets carrying value		(144,200)
Transaction costs		(5,663)
Net gain on realized contingent milestone and royalty assets	$	75,137

No amount remains on the condensed consolidated balance sheets related to the arrangement with Royalty Pharma. The Company may still receive Milestone Payments up to $50.0 million for 2025 and $100.0 million for 2026 which would be recorded upon satisfaction of the contractual Milestone Payment provisions.

8. Subleases

Sublease Income

The Company entered a non-cancelable agreement commencing on January 3, 2025 (“January 2025 Sublease”), under which it subleased approximately 12,000 square feet of its South San Francisco office and laboratory space to an unaffiliated company. The sublease period is for two years with an option to extend for one additional year. Under the terms of the January 2025 Sublease, the Company is entitled to receive an initial monthly base rent of approximately $67,000 with a 3.5% increase after the first year. The Company will recognize approximately $1.5 million in total sublease income over the two-year sublease term.

As of September 30, 2025, the Company has subleased approximately 130,000 square feet of a total 162,000 square feet of its South San Francisco office and laboratory space to four unaffiliated companies. The Company’s sublease income is recognized as a reduction to rent expense within selling, general and administrative expenses on the condensed consolidated statements of operations. The Company’s sublease income from its subleases is summarized below:


	Three Months Ended September 30,				Nine Months Ended September 30,
(In thousands)	2025		2024		2025		2024
Sublease income	$	2,447	$	2,204	$	7,197	$	6,498

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2024 Impairment of Long-Lived Assets

The Company evaluates the carrying value of its long-lived asset groups, which includes operating lease assets and leasehold improvements, for impairment when indicators exist that the carrying amounts of an asset may not be fully recoverable. An impairment loss is recognized when estimated undiscounted future cash flows expected to result from the use of the asset or asset group are less than its carrying amount. Impairment, if any, is measured as the amount by which the carrying amount of a long-lived asset exceeds its fair value.

As of September 30, 2024, the Company determined that the ceased occupancy of certain laboratory space in South San Francisco were indicators of impairment. Based on the Company’s impairment assessment as of September 30, 2024, the Company determined that the carrying values of two asset groups, consisting of vacant vivarium laboratory space and vacant general laboratory space (including related leasehold improvements) and comprising approximately 22,000 square feet, exceeded the estimated undiscounted future cash flows of the two asset groups under the current sublease market conditions. The Company had previously recognized a non-cash impairment charge of $3.0 million for the three and six months ended June 30, 2024 related to the two asset groups. Under ASC 360, Property, Plant, and Equipment, the Company proceeded to update the estimated the fair value of the two asset groups as of September 30, 2024. The Company applied a discounted cash flow method to estimate the fair values of the two asset groups, which represented Level 3 non-recurring fair value measurements. The estimated fair values of the two asset groups were determined by discounting the estimated sublease net cash flows based on the Company’s estimates and assumptions including, but not limited to, expected sublease rental income of $1.4 million, an annual discount rate of 9.7%, and other variable lease-related expenses to be incurred during the subtenant search period.

As a result of its updated impairment analysis, the Company recognized a non-cash impairment charge of $1.5 million for the three months ended September 30, 2024, based on the amount of excess carrying value of the two asset groups over its estimated fair values. In aggregate, the Company recognized a total non-cash impairment charge of $4.5 million for the nine months ended September 30, 2024. The impairment amount is presented in the Company’s condensed consolidated statements of operations within “Impairment of long-lived assets”. As of September 30, 2025, no further indicators of impairment of long-lived assets have been identified.

9. Share-Based Compensation

Share-Based Compensation Expense

Share-based compensation expense included in the condensed consolidated statements of operations was recognized as follows:


	Three Months Ended September 30,				Nine Months Ended September 30,
(In thousands)	2025		2024		2025		2024
Research and development	$	1,080	$	1,111	$	3,137	$	3,727
Selling, general and administrative		3,496		3,852		10,859		11,840
Total share-based compensation expense	$	4,576	$	4,963	$	13,996	$	15,567

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Share-Based Compensation Option and Award Activity

The following tables summarize option and RSU activity (including market-based and performance-contingent RSUs) for the three and nine months ended September 30, 2025 and 2024:


		Weighted-Average		Weighted-Average
	Number of Shares	Remaining		Exercise Price of	Number of Shares
	Subject to	Contractual		Outstanding Options	Subject to
	Outstanding Options	Term (Years)		(in dollars)	Outstanding RSUs
Outstanding at December 31, 2024	1,896,908		$	15.53	3,955,487
Granted	—			—	1,311,088
Exercised/Released	—			—	(619,026)
Forfeited	—			—	(163,160)
Outstanding at March 31, 2025	1,896,908			15.53	4,484,389
Granted	169,806			—	74,543
Exercised/Released	—			—	(413,240)
Forfeited	—			—	(44,996)
Expired	(50,500)			—	—
Outstanding at June 30, 2025	2,016,214	6.02		14.91	4,100,696
Granted	—			—	12,500
Exercised/Released	(25,000)			—	(336,744)
Forfeited	(562)			—	(39,854)
Expired	(6,500)			—	—
Outstanding at September 30, 2025	1,984,152	5.86		14.96	3,736,598


		Weighted-Average	Weighted-Average
	Number of Shares	Remaining	Exercise Price of		Number of Shares
	Subject to	Contractual	Outstanding Options		Subject to
	Outstanding Options	Term (Years)	(in dollars)		Outstanding RSUs
Outstanding at December 31, 2023	2,305,876		$	18.65	3,995,750
Granted	—			—	60,976
Exercised/Released	—			—	(656,431)
Forfeited	—			—	(325,441)
Expired	(6,000)			—	—
Outstanding at March 31, 2024	2,299,876			18.62	3,074,854
Granted	165,032			—	1,987,121
Exercised/Released	—			—	(357,038)
Forfeited	—			—	(175,781)
Expired	(204,000)			—	—
Outstanding at June 30, 2024	2,260,908	5.49		17.53	4,529,156
Granted	—			—	58,750
Exercised/Released	—			—	(297,284)
Forfeited	—			—	(8,962)
Expired	(362,000)			—	—
Outstanding at September 30, 2024	1,898,908	6.25		15.53	4,281,660

10. Income Taxes

For the three and nine months ended September 30, 2025, the Company recognized an income tax benefit and income tax expense of $6.5 million and $11.3 million, respectively, which were primarily related to the net gain on realized contingent milestone and royalty assets arising from the sale of the Company’s TRELEGY royalties to GSK in May 2025.

No provision for income taxes has been recognized on undistributed earnings of the Company's foreign subsidiaries because it considers such earnings to be indefinitely reinvested.

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The Company follows the accounting guidance related to accounting for income taxes which requires that a company reduce its deferred tax assets by a valuation allowance if, based on the weight of available evidence, it is more likely than not that some portion or all of its deferred tax assets will not be realized. In 2022, the Company released its valuation allowance for US federal tax purposes stemming from the effects of the TRC Transaction. As of September 30, 2025, the Company does not believe a valuation allowance against its deferred tax assets should be re-established to offset its deferred tax assets for US federal tax purposes. As of September 30, 2025, the Company continues to maintain a full valuation allowance in certain states, including California, and other jurisdictions.

The Company records liabilities related to uncertain tax positions in accordance with the income tax guidance which clarifies the accounting for uncertainty in income taxes recognized in an enterprise’s financial statements by prescribing a minimum recognition threshold and measurement attribute for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. Resolution of one or more of these uncertain tax positions in any period may have a material impact on the results of operations for that period. The Company includes any applicable interest and penalties related to income tax matters in income tax expense.

The Company’s future income tax expense may be affected by such factors as changes in tax laws, regulations, its business, tax rates, interpretation of existing laws or regulations, the impact of accounting for share-based compensation, the impact of accounting for business combinations and other transactions, its international organization, shifts in the amount of income before tax earned in the US as compared with other regions in the world, and changes in overall levels of income before tax.

On July 4, 2025, the One Big Beautiful Bill Act (“OBBBA”) was enacted into law. The OBBBA includes significant provisions, such as the permanent extension of certain expiring provisions of the Tax Cuts and Jobs Act of 2017, modifications to the international tax framework, and the restoration of favorable tax treatment for certain business provisions. The OBBBA has multiple effective dates, with certain provisions effective in 2025 and others implemented through 2027. The changes introduced by the OBBBA do not have a material impact on the Company’s annual effective tax rate for 2025.

11. Commitments and Contingencies

Legal Proceedings

In the ordinary course of business, the Company may be subject to legal claims and regulatory actions that could have a material adverse effect on its business or financial position. The Company assesses its potential liability in such situations by analyzing the possible outcomes of various litigation, regulatory, and settlement strategies. If the Company determines that a material loss is probable and its amount can be reasonably estimated, it will accrue an amount equal to the estimated loss. As of September 30, 2025, the Company did not accrue any estimated losses related to its ongoing legal proceedings.

Litigation – Patent Infringement

During January 2023, the Company received notice from Accord Healthcare, Inc.; Cipla USA, Inc. and Cipla Limited; Eugia Pharma Specialties Ltd.; Lupin Inc.; Mankind Pharma Ltd.; Orbicular Pharmaceutical Technologies Private Limited; and Teva Pharmaceuticals, Inc. (collectively, the “generic companies”), that they have each filed with the FDA an abbreviated new drug application (“ANDA”), for a generic version of YUPELRI. The notices from the generic companies each included a paragraph IV certification with respect to five of the Company’s patents listed in the FDA’s Orange Book for YUPELRI on the date of the Company’s receipt of the notice. The asserted patents relate generally to polymorphic forms of and a method of treatment using YUPELRI. In February 2023, the Company filed patent infringement suits against the generic companies in federal district courts, including the United States District Court for the District of New Jersey, the U.S. District Court for the District of Delaware, and the U.S. District Court for the Middle District of North Carolina. The suits in Delaware and North Carolina have been dismissed, as all generic companies have agreed to venue in New Jersey. The complaint alleges that by filing the ANDAs, the generic companies have infringed five of the Company’s Orange Book listed patents. The Company is seeking a permanent injunction to prevent the generic companies from introducing a generic version of YUPELRI that would infringe the Company’s patents. As a result of this lawsuit, a stay of approval through May 2026 has been imposed by the FDA on the generic

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companies’ ANDAs pending any adverse court decision. Additional patents covering YUPELRI, granted on July 4, 2023 and January 2, 2024, were subsequently listed in FDA’s Orange Book. The Company filed additional patent infringement suits in the U.S. District Court for the District of New Jersey during August 2023 and January 2024. These suits have been consolidated with the above action. Further, the original complaint was amended during December 2023 to include certain patents not listed in the Orange Book.

In May 2024, the Company received notice from Qilu Pharmaceuticals Co., Ltd. (“subsequent ANDA filer”), that it had filed with the FDA an ANDA for a generic version of YUPELRI. The notice from the subsequent ANDA filer included a paragraph IV certification with respect to certain of the Company’s patents listed in FDA’s Orange Book for YUPELRI. The asserted patents relate generally to polymorphic forms of and a method of treatment using YUPELRI. In June 2024, the Company filed a patent infringement suit against the subsequent ANDA filer in the U.S. District Court for the Eastern District of Pennsylvania. The complaint alleges that by filing the ANDA, the subsequent ANDA filer has infringed certain of the Company’s Orange Book listed patents.

As of October 31, 2025, the Company has settled all litigation with Accord Healthcare, Inc.; Cipla USA, Inc. and Cipla Limited; Eugia Pharma Specialties Ltd.; Lupin Pharmaceuticals, Inc.; Orbicular Pharmaceutical Technologies Private Limited; Qilu Pharmaceuticals Co., Ltd.; and Teva Pharmaceuticals, Inc. pursuant to individual agreements in which the Company granted these companies a royalty-free, non-exclusive, non-sublicensable, non-transferable license to manufacture and market their respective generic versions of YUPELRI inhalation solution in the US on or after the licensed launch date of April 23, 2039, subject to certain exceptions as is customary in these type of agreements. As required by law, the settlements are subject to review by the U.S. Department of Justice and the Federal Trade Commission. The patent litigation against the one remaining generic company, Mankind Pharma Ltd., along with certain affiliates, remains pending.

Further method of treatment patents, with expiration dates of August 2039, were granted on July 30, 2024 and April 29, 2025 and were listed in the Orange Book. The Company filed additional patent infringement suits in the U.S. District Court for the District of New Jersey during August 2024 and May 2025 against the generic companies remaining at the time. These suits have been consolidated with the action described above.

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Forward-Looking Statements

You should read the following discussion in conjunction with our condensed consolidated financial statements (unaudited) and related notes included elsewhere in this report. This report includes “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). Such forward-looking statements involve risks, uncertainties, and assumptions. All statements in this report, other than statements of historical facts, including statements regarding our strategy, future operations, future financial position, future revenues, projected costs, prospects, plans, intentions, designs, expectations, and objectives are forward-looking statements. The words “aim,” “anticipate,” “assume,” “believe,” “contemplate,” “continue,” “could,” “designed,” “developed,” “drive,” “estimate,” “expect,” “forecast,” “goal,” “indicate,” “intend,” “may,” “mission,” “opportunities,” “plan,” “possible,” “potential,” “predict,” “project,” “pursue,” “represent,” “seek,” “suggest,” “should,” “target,” “will,” “would,” and similar expressions (including the negatives thereof) are intended to identify forward-looking statements, although not all forward-looking statements contain these identifying words. These statements reflect our current views with respect to future events or our future financial performance, are based on assumptions, and involve known and unknown risks, uncertainties and other factors which may cause our actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements. We may not actually achieve the plans, intentions, expectations or objectives disclosed in our forward-looking statements and the assumptions underlying our forward-looking statements may prove incorrect. Therefore, you should not place undue reliance on our forward-looking statements. Actual results or events could differ materially from the plans, intentions, expectations, and objectives disclosed in the forward-looking statements that we make. Factors that we believe could cause actual results or events to differ materially from our forward-looking statements include, but are not limited to, those discussed in “Risk Factors,” “Management’s Discussion and Analysis of Financial Condition and

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Results of Operations” and elsewhere in this report and in our Annual Report on Form 10-K for the year ended December 31, 2024. Our forward-looking statements in this report are based on current expectations, and we do not assume any obligation to update any forward-looking statements for any reason, even if new information becomes available in the future. When used in this report, all references to “Theravance Biopharma”, the “Company”, or “we” and other similar pronouns refer to Theravance Biopharma, Inc. collectively with its subsidiaries.

Management Overview

Theravance Biopharma, Inc. (“we,” “our,” “Theravance Biopharma” or the “Company”) is a biopharmaceutical company primarily focused on the development and commercialization of medicines. Our focus is to deliver medicines that make a difference^® in people’s lives.

In pursuit of our purpose, we leverage decades of expertise, which has led to the development of the United States (“US”) Food and Drug Administration (the “FDA”) approved YUPELRI^® (revefenacin) inhalation solution indicated for the maintenance treatment of patients with chronic obstructive pulmonary disease (“COPD”). Ampreloxetine, our late-stage investigational once-daily norepinephrine reuptake inhibitor in development for the treatment of symptomatic neurogenic orthostatic hypotension (“nOH”) in patients with Multiple System Atrophy (“MSA”), has the potential to be a first in class therapy effective in treating a constellation of cardinal symptoms in MSA patients.

Core Program Updates

YUPELRI(revefenacin) Inhalation Solution

YUPELRI (revefenacin) inhalation solution is a once-daily, nebulized long-acting muscarinic antagonist (“LAMA”) approved for the maintenance treatment of COPD in the US. LAMAs are recognized by international COPD treatment guidelines as a cornerstone of maintenance therapy for COPD, regardless of severity of disease. Our market research indicates there is an enduring population of COPD patients in the US that either need or prefer nebulized delivery for maintenance therapy. The stability of revefenacin in both metered dose inhaler and dry powder inhaler (“MDI/DPI”) formulations suggests that revefenacin could also serve as a foundation for novel handheld combination products.

We co-developed YUPELRI with our collaboration partner, Viatris Inc. (“Viatris”). Under the terms of the Viatris Development and Commercialization Agreement (the “Viatris Agreement”), we led the US Phase 3 development program for YUPELRI in COPD, and Viatris was responsible for reimbursement of our costs related to the registrational program up until the approval of the first new drug application, after which costs were shared. YUPELRI was approved by the FDA for the maintenance treatment of patients with COPD in November 2018. In the US, Viatris is leading the commercialization of YUPELRI, and we co-promote the product under a profit and loss sharing arrangement (65% to Viatris; 35% to us). Outside the US (excluding China and adjacent territories), Viatris is responsible for development and commercialization and will pay us a tiered royalty on net sales at percentage royalty rates ranging from low double-digits to mid-teens. We retain worldwide rights to revefenacin delivered through other dosage forms, such as a MDI/DPI.

Under the terms of the Viatris Agreement, as amended, as of September 30, 2025, we were eligible to receive from Viatris potential global sales and regulatory milestone payments (excluding the China Region) of up to $205.0 million in the aggregate with $160.0 million associated with YUPELRI monotherapy and $45.0 million associated with future potential combination products. Of the $160.0 million associated with monotherapy, $10.0 million relates to regulatory actions in the EU and $150.0 million relates to sales milestones based on achieving certain levels of annual aggregate US net sales as follows:


YUPELRI US Net Sales	Sales Milestones
(In a Calendar Year)	Due from Viatris
$250.0 million	$25.0 million
$500.0 million	$50.0 million
$750.0 million	$75.0 million

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To achieve the $25.0 million sales milestone for the year ending December 31, 2025, approximately $54.0 million in US net sales is required in the fourth quarter of 2025. By comparison, YUPELRI US net sales totaled $66.7 million in the fourth quarter of 2024.

In 2019, we granted Viatris exclusive development and commercialization rights to nebulized revefenacin in China and adjacent territories, which include the Hong Kong SAR, the Macau SAR, and Taiwan (collectively, the “China Region”). In November 2023, we learned that Viatris’ Phase 3 study of YUPELRI in China was positive, and the data were consistent with previous findings of YUPELRI’s strong efficacy. In June 2024, Viatris completed a registrational filing for YUPELRI in China, and on June 26, 2025, we announced that Viatris had secured regulatory approval from China’s National Medical Products Administration (“NMPA”) for YUPELRI. The regulatory approval triggered a one-time $7.5 million milestone payment from Viatris which we received on July 7, 2025. Viatris is responsible for all aspects of development and commercialization of YUPELRI in the China Region, including pre- and post-launch activities and product registration and all associated costs.

As of September 30, 2025, we were also eligible to receive additional potential sales and regulatory milestones of up to $45.0 million related to Viatris’ development and commercialization of nebulized revefenacin in the China Region with $37.5 million associated with YUPELRI monotherapy and $7.5 million associated with achieving regulatory milestones related to future potential combination products. The $37.5 million relates to sales milestones based on achieving certain levels of cumulative net sales in the China Region as follows:


YUPELRI China Region Net Sales	Sales Milestones
(Cumulative)	Due from Viatris
$100.0 million	$2.5 million
$200.0 million	$5.0 million
$400.0 million	$10.0 million
$800.0 million	$20.0 million

With respect to the China Region royalties, we are also eligible to receive tiered royalties on net sales of nebulized revefenacin as follows:


YUPELRI China Region Net Sales Thresholds	Royalty Rate
(Annual)	Due from Viatris
≤ $75.0 million	14%
> $75.0 million to ≤ $150.0 million	17%
> $150.0 million	20%

While Viatris records total YUPELRI net sales, we are entitled to a 35% share of the net profit (loss). Our implied 35% share of total YUPELRI net sales is presented below:


	Three Months Ended September 30,				Change				Nine Months Ended September 30,				Change
(In thousands)	2025		2024		$		%		2025		2024		$		%
YUPELRI net sales (100% recorded by Viatris)	$	71,363	$	62,189	$	9,174	15	%	$	196,037	$	171,945	$	24,092	14	%
YUPELRI net sales (Theravance Biopharma implied 35%)		24,977		21,766		3,211	15			68,613		60,181		8,432	14

Ampreloxetine (TD-9855)

Ampreloxetine is an investigational, once-daily Norepinephrine Reuptake Inhibitor (“NRI”) that we are developing for the treatment of Multiple System Atrophy (“MSA”) patients with symptomatic neurogenic orthostatic hypotension (“nOH”). nOH is caused by primary autonomic failure conditions and the majority of patients with MSA experience symptoms of nOH. Ampreloxetine has high affinity for binding to the norepinephrine (“NE”) transporter. By blocking the action of the NE transporter, ampreloxetine causes an increase in extracellular concentrations of norepinephrine. Ampreloxetine is wholly owned by Theravance Biopharma.

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Based on positive results from a small exploratory Phase 2 study in nOH and discussions with the FDA, we advanced ampreloxetine into a Phase 3 program. We announced the initiation of patient dosing in the study in early 2019. The Phase 3 program consisted of two pivotal studies and one non-pivotal study. The first pivotal study (SEQUOIA), a four-week, randomized double-blind, placebo-controlled study, was designed to evaluate the efficacy and safety of ampreloxetine in Parkinson’s disease (“PD”), pure autonomic failure (“PAF”) and MSA patients with symptomatic nOH. The second pivotal study (REDWOOD), a four-month open label study followed by a six-week randomized withdrawal phase was designed to evaluate the durability of the same patient group’s response to ampreloxetine. The protocol for the pivotal studies stipulated an enrollment threshold of 40% MSA patients based on the hypothesis ampreloxetine would work the best in patients with MSA because they have more intact nerves on which ampreloxetine can exert its effect, relative to the other patient types in the study. The third, non-pivotal study (OAK), was a three-and-a-half-year long-term extension study.

In September 2021, we reported that the SEQUOIA Phase 3 clinical study did not meet its primary endpoint. Most treatment-related adverse events were mild or moderate in severity. Serious adverse events occurred in two patients on placebo and four on ampreloxetine, none of which were considered related to the study drug. No deaths were reported, and there was no signal for supine hypertension.

In April 2022, we reported that the REDWOOD Phase 3 clinical study did not meet its primary endpoint as the results were not statistically significant for the overall population of patients which included patients with PD, PAF, and MSA. The pre-specified subgroup analysis by disease type suggested that the average benefit seen in patients receiving ampreloxetine was largely driven by a benefit to MSA patients. The benefit to MSA patients in the study was observed in multiple endpoints including Orthostatic Hypotension Symptom Assessment Scale (“OHSA”) composite, Orthostatic Hypotension Daily Activities Scale (“OHDAS”) composite, Orthostatic Hypotension Questionnaire (“OHQ”) composite and OHSA #1. Throughout the study, there was no indication of worsening of supine hypertension among any of the patient sub-groups. Data suggest that ampreloxetine was well-tolerated and no new safety signals were identified among any of the patient sub-groups.

In June 2022, we held a Type C meeting with the FDA. From this meeting, we aligned on a path to a New Drug Application (“NDA”) filing with one additional Phase 3 clinical study (CYPRESS) in MSA patients with symptomatic nOH, using the OHSA composite score as the primary endpoint. This Phase 3 study was initiated in the first quarter of 2023, and the last patient was enrolled in the open label period of the study in late-August 2025. We expect top-line data to be available in the first quarter of 2026. In May 2023, we announced that the FDA granted Orphan Drug Designation status to ampreloxetine for the treatment of symptomatic nOH in patients with MSA.

In July 2022, Royalty Pharma Investments (“Royalty Pharma”) agreed to invest up to $40.0 million to advance the development of ampreloxetine in MSA in exchange for unsecured low single-digit royalties. Royalty Pharma’s $40.0 million investment in ampreloxetine included a $25.0 million upfront payment received in July 2022 and an additional $15.0 million payment upon the first regulatory approval of ampreloxetine. In exchange, Royalty Pharma will receive future unsecured royalties of 2.5% on annual ampreloxetine global net sales up to $500.0 million and 4.5% on annual global net sales over $500.0 million. If ampreloxetine regulatory approval is not achieved or if ampreloxetine sales are never recognized, the amounts invested by Royalty Pharma would not be repaid by us.

Economic Interests and Other Assets

Mid- and Long-Term Economic Interest in TRELEGY^®

In July 2022, we completed the sale of all of our equity interests in Theravance Respiratory Company, LLC (“TRC”) representing our 85% economic interest in the sales-based royalty rights on worldwide net sales of GSK plc's (“GSK”) TRELEGY ELLIPTA (“TRELEGY”) to Royalty Pharma for approximately $1.11 billion in upfront cash while retaining future value through the right to receive contingent milestone payments and certain outer year-royalties.

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we were informed by Royalty Pharma that the 2024 minimum royalty amount for TRELEGY was achieved based on $3.46 billion of 2024 TRELEGY global net sales, and we received the maximum $50.0 million Milestone Payment from Royalty Pharma in February 2025.

As of September 30, 2025, a total of $150.0 million in potential Milestone Payments remain available to us. For the next potential Milestone Payment, we are eligible to receive either (i) $25.0 million if Royalty Pharma receives $260.0 million or more in royalty payments from GSK with respect to 2025 TRELEGY global net sales, which we would expect to occur in the event TRELEGY global net sales are approximately $3.06 billion or (ii) $50.0 million if Royalty Pharma receives $295.0 million or more in royalty payments from GSK with respect to 2025 TRELEGY global net sales, which we would expect to occur in the event TRELEGY global net sales exceed approximately $3.41 billion. Achievement of either the $25.0 million or $50.0 million milestone in 2025 would not require an increase in global net sales compared to 2024, as the $3.46 billion in global net sales achieved in 2024 exceeds the threshold necessary to trigger the higher $50.0 million milestone payment in 2025.

With respect to 2026 TRELEGY global net sales, we are eligible to receive either (i) $50.0 million if Royalty Pharma receives $270.0 million or more in royalty payments from GSK, which we would expect to occur in the event TRELEGY global net sales are approximately $3.16 billion or (ii) $100.0 million if Royalty Pharma receives $305.0 million or more in royalty payments from GSK, which we would expect to occur in the event TRELEGY global net sales exceed approximately $3.51 billion. To achieve the higher $100.0 million milestone in 2026, TRELEGY global net sales would require less than a 2% increase over its 2024 global net sales.

Total 2024 TRELEGY global net sales represented a 26% increase compared to 2023, and TRELEGY is currently expected to generate global peak sales of approximately $4.0 billion in 2026 according to consensus estimates. TRELEGY global net sales for the three and nine months ended September 30, 2025 were $979 million and $2.92 billion, respectively, which represented 24% and 13% year-over-year growth, respectively.

In addition to potential Milestone Payments, we were eligible to receive from Royalty Pharma 85% of the royalty payments on TRELEGY payable to Royalty Pharma for: (a) sales or other activities occurring on and after January 1, 2031 related to TRELEGY in the US; and (b) sales or other activities occurring on and after July 1, 2029 related to TRELEGY outside of the US. On a country-by-country basis, we were entitled to royalties until the expiration of the longest-lived patent or 15 years after commercial launch, whichever comes later. We expect fifteen years after the commercial launch in the US will occur in late 2032 and fifteen years after the first commercial launch in ex-US jurisdictions will start occurring in the mid-2030s. The TRELEGY royalties that were payable to us by Royalty Pharma are country specific. Total royalty rates were upward tiering from 6.5% to 10% and based on total annual global net sales as follows:


TRELEGY Global Net Sales Thresholds	Royalty Rate
(Annual)	Due from GSK to Royalty Pharma
≤ $750.0 million	6.5%
> $750.0 million to ≤ $1,250.0 million	8.0%
> $1,250.0 million to ≤ $2,250.0 million	9.0%
> $2,250.0 million	10.0%

On June 2, 2025, we announced that we had entered into a definitive agreement to sell our remaining royalty interest in the global net sales of TRELEGY (as described above) to GSK for $225.0 million (the “Royalty Sales Agreement”) while retaining our right to receive the remaining potential $150.0 million in Milestone Payments from Royalty Pharma. We received the $225.0 million cash payment from GSK on June 27, 2025.

The Royalty Sales Agreement transaction represented the first outcome of the ongoing efforts of the Strategic Review Committee (the "Committee") of the board of directors. We announced in November 2024 that the board of directors had formed the Committee, composed entirely of independent directors, to assess all strategic alternatives available to us to unlock shareholder value. We remain focused on disciplined capital allocation and returning

excess cash to shareholders, and the Committee will continue to evaluate a range of alternatives to further enhance shareholder value, though there can be no assurance that additional transactions will occur.

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The following information regarding the TRELEGY program is based solely upon publicly available information and may not reflect the most recent developments under the program.

TRELEGY provides the activity of an inhaled corticosteroid (FF) plus two bronchodilators (UMEC, a LAMA, and VI, a long-acting beta2 agonist, or LABA) in a single delivery device administered once-daily. TRELEGY is approved for use in the US, European Union (“EU”), and other countries for the long-term, once-daily, maintenance treatment of patients with COPD. Additionally, the FDA approved an sNDA for the use of TRELEGY to treat asthma in adults in September 2020 making TRELEGY the first once-daily single inhaler triple therapy for the treatment of both asthma and COPD in the US. GSK continues to pursue approval for the asthma indication in additional markets.

See “Risk Factors—We do not control the commercialization of TRELEGY; accordingly, our receipt of Milestone Payments will depend on, among other factors, GSK’s ability to further commercialize TRELEGY” for additional information.

Critical Accounting Policies and Estimates

Our discussion and analysis of our financial condition and results of operations is based on our condensed consolidated financial statements, which have been prepared in accordance with US Generally Accepted Accounting Principles (“GAAP”). The preparation of these financial statements requires us to make estimates and assumptions that affect the reported amounts of revenues, expenses, assets, liabilities, and other related disclosures. Our estimates are based on our historical experience and on various other factors that we believe are reasonable under the circumstances, the results of which form the basis for making judgments about the carrying value of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions.

We believe that the accounting policies and estimates discussed in our Annual Report on Form 10-K for the year ended December 31, 2024 are essential to understanding our operating results and financial condition, as these policies and estimates relate to the more significant areas involving management’s judgments. There have been no material changes to the critical accounting policies and estimates discussed in our Annual Report on Form 10-K for the year ended December 31, 2024.

Results of Operations

Revenue

While Viatris records the total net sales of YUPELRI within its own financial statements, our implied 35% YUPELRI revenue, as compared to the prior year comparable periods, was as follows:


	Three Months Ended September 30,				Change				Nine Months Ended September 30,				Change
(In thousands)	2025		2024		$		%		2025		2024		$		%
YUPELRI net sales (100% recorded by Viatris)	$	71,363	$	62,189	$	9,174	15	%	$	196,037	$	171,945	$	24,092	14	%
YUPELRI net sales (Theravance Biopharma implied 35%)		24,977		21,766		3,211	15			68,613		60,181		8,432	14

Our recognized revenue, as compared to the prior year comparable periods, was as follows:


	Three Months Ended September 30,				Change				Nine Months Ended September 30,				Change
(In thousands)	2025		2024		$		%		2025		2024		$		%
Viatris collaboration agreement	$	19,990	$	16,868	$	3,122	19	%	$	54,073	$	45,627	$	8,446	19	%
Licensing revenue		—		—		—	NM			7,500		—		7,500	NM
Total revenues	$	19,990	$	16,868	$	3,122	19	%	$	61,573	$	45,627	$	15,946	35	%

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We are entitled to a share of US profits and losses (65% to Viatris; 35% to Theravance Biopharma) received in connection with YUPELRI net sales. In accordance with the applicable accounting guidance, amounts receivable from Viatris in connection with the commercialization of YUPELRI are recorded within the condensed consolidated statements of operations as revenue from “Viatris collaboration agreement”. Any reimbursement from Viatris attributed to the 65% cost-sharing of our R&D expenses is characterized as a reduction of R&D expense, as we do not consider performing R&D services for reimbursement to be a part of our ordinary operations.

For the three and nine months ended September 30, 2025, we recognized revenue of $20.0 million and $54.1 million, respectively, under the Viatris collaboration agreement. These amounts represented increases of 19%, compared to the corresponding periods in the prior year. The increases were primarily attributed to higher net sales of YUPELRI, which grew 15% year-over-year in the third quarter and were driven by customer demand growth of 6% and improved net pricing due to favorable channel mix. We view customer demand as the primary driver for the brand and believe improvements to net pricing will likely moderate in the future.

For the nine months ended September 30, 2025, we also recognized $7.5 million in licensing revenue related to YUPELRI’s regulatory approval by China’s National Medical Products Administration (“NMPA”) in June 2025.

Research and Development

Our R&D expenses consist primarily of employee-related costs, external costs, and various allocable expenses. We budget total R&D expenses on an internal department level basis, and we manage and report our R&D activities across the following four cost categories:

Employee-related costs, which include salaries, wages, and benefits;

Share-based compensation, which includes expenses associated with our equity plans;

External-related costs, which include clinical trial related expenses, other contract research fees, consulting fees, and contract manufacturing fees; and

Facilities and other allocated expenses, such as general and administrative support functions, office rent, software subscriptions, and insurance.

The following table summarizes our R&D expenses incurred, net of any reimbursements from collaboration partners, as compared to the prior year comparable periods:


	Three Months Ended September 30,				Change				Nine Months Ended September 30,				Change
(In thousands)	2025		2024		$		%		2025		2024		$		%
Employee-related	$	2,790	$	2,829	$	(39)	(1)	%	$	10,256	$	9,345	$	911	10	%
Share-based compensation		1,080		1,111		(31)	(3)			3,137		3,727		(590)	(16)
External-related		3,453		4,448		(995)	(22)			14,209		12,658		1,551	12
Facilities and other allocated expenses		789		880		(91)	(10)			2,452		2,460		(8)	(0)
Total research & development	$	8,112	$	9,268	$	(1,156)	(12)	%	$	30,054	$	28,190	$	1,864	7	%

R&D expenses decreased by $1.2 million for the three months ended September 30, 2025 compared to the prior year period. The $1.2 million decrease was primarily attributed to a $1.0 million decrease in external-related expenses which was primarily driven by the completion of the CYPRESS study enrollment in August 2025 and partially offset by incremental NDA and regulatory-related activities associated with ampreloxetine

R&D expenses increased by $1.9 million for nine months ended September 30, 2025 compared to the prior year period. The $1.9 million increase was primarily attributed to a $1.6 million increase in external-related expenses which was primarily driven by the continued progression of the CYPRESS study and incremental NDA and regulatory-related activities associated with ampreloxetine.

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Selling, General and Administrative

Selling, general and administrative (“SG&A”) expenses consist primarily of salaries and benefits, facilities and overhead costs, and other costs related to areas such as legal, finance, information technology, sales and marketing, and medical affairs.

SG&A expenses, as compared to the prior year comparable periods, were as follows:


	Three Months Ended September 30,				Change				Nine Months Ended September 30,				Change
(In thousands)	2025		2024		$		%		2025		2024		$		%
Selling, general and administrative	$	18,333	$	16,875	$	1,458	9	%	$	55,132	$	50,673	$	4,459	9	%

Total SG&A expenses were $18.3 million for the three months ended September 30, 2025. Excluding share-based compensation expense (“SBC”), total SG&A expenses were $14.8 million for the third quarter of 2025 and were comprised of $7.5 million of general and administrative (“G&A”) expenses and $7.3 million of selling, marketing & medical affairs (“SM&M”) expenses. Total SG&A expenses (excluding SBC) were $13.0 million for the third quarter of 2024 and were comprised of $6.6 million of G&A expenses and $6.4 million of SM&M expenses.

Third quarter of 2025 G&A expenses (excluding SBC) increased by $0.9 million compared to the prior year period and were primarily due to one-time legal costs. Excluding the one-time legal costs, G&A expenses (excluding SBC) were relatively flat compared to the prior year period. SM&M expenses (excluding SBC) increased by $0.9 million in the third quarter of 2025 compared to the prior year period and were primarily due to pre-launch medical affairs and commercialization expenses associated with ampreloxetine.

Total SG&A expenses were $55.1 million for the nine months ended September 30, 2025. Excluding SBC, total SG&A expenses were $44.3 million and were comprised of $23.0 million of G&A expenses and $21.3 million of SM&M expenses. Total SG&A expenses (excluding SBC) were $38.8 million for the prior year period and were comprised of $20.3 million of G&A expenses and $18.5 million of SM&M expenses.

The $2.7 million increase in year-to-date G&A expenses (excluding SBC) compared to the prior year period was primarily due to one-time legal costs. Excluding the one-time legal costs, G&A expenses (excluding SBC) were 3% lower compared to the prior year period driven by cost savings initiatives. SM&M expenses (excluding SBC) increased by $2.8 million year-to-date 2025 compared to the prior year period and was primarily due to pre-launch medical affairs and commercialization expenses associated with ampreloxetine and an increase in employee-related expenses.

Total SBC related to SG&A expenses were $3.5 million and $10.9 million for the three and nine months ended September 30, 2025, respectively, and $3.9 million and $11.8 million for the three and nine months ended September 30, 2024, respectively.

Impairment of Long-Lived Assets

Impairment of long-lived assets, as compared to the prior year comparable periods, was as follows:


	Three Months Ended September 30,				Change				Nine Months Ended September 30,				Change
(In thousands)	2025		2024		$		%		2025		2024		$		%
Impairment of long-lived assets (non-cash)	$	—	$	1,562	$	(1,562)	NM	%	$	—	$	4,513	$	(4,513)	NM	%

For the three and nine months ended September 30, 2024, we recognized non-cash impairment charges of $1.6 million and $4.5 million, respectively, related to our vacant laboratory spaces and related leasehold improvements in South San Francisco, California, which were on the market for sublease. There was no charge for impairment of long-lived assets recognized for the three and nine months ended September 30, 2025.

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Net Gain on Realized Contingent Milestone and Royalty Assets

Net gain on realized contingent milestone and royalty assets was as follows:


	Three Months Ended September 30,				Change				Nine Months Ended September 30,				Change
(In thousands)	2025		2024		$		%		2025		2024		$		%
Net gain on realized contingent milestone and royalty assets	$	—	$	—	$	—	—	%	$	75,137	$	—	$	75,137	NM	%

For the nine months ended September 30, 2025, we recognized a $75.1 million net gain on contingent milestone and royalty assets resulting from the sale of our TRELEGY royalties to GSK. This net gain reflects total cash proceeds of $225.0 million from GSK, less (i) the contingent milestone and royalty assets carrying value of $144.2 million and (ii) transaction costs of $5.7 million. We received the $225.0 million from GSK in June 2025.

Although we sold the future royalties related to TRELEGY, we retained the right to receive the potential remaining $150.0 million in Milestone Payments from Royalty Pharma if certain TRELEGY global nets sales thresholds are achieved in 2025 and 2026.

Interest Expense

Interest expense, as compared to the prior year comparable periods, was as follows:

Theravance Biopharma, Inc. 10-Q