Ladies and gentlemen, good afternoon. I'd like to welcome everyone to the Theravance Biopharma Fourth Quarter and Full Year 2020 Conference Call. During the presentation, all participants will be in a listen-only mode. A question-and-answer session will follow the company's formal remarks. Also, today's conference call is being recorded. And now, I would like to turn the call over to Gail Cohen, Vice President, Corporate Communications. Please go ahead.

Good afternoon, and thank you for joining the Theravance Biopharma quarterly and full-year 2020 conference call to discuss our business. As always, I remind you that this call will contain forward-looking statements, which will involve risks and uncertainties, including statements about our development pipeline, expected benefits of our products, the anticipated timing of clinical trials, regulatory filings and expected financial results. Information concerning factors that could cause results to differ materially from our forward-looking statements is described further in our filings with the SEC. And now, I would direct your attention to Slide 3. Joining us are Rick Winningham, Chief Executive Officer; Frank Pasqualone; Chief Business Officer; Brett Haumann, Chief Medical Officer; and Andrew Hindman, Chief Financial Officer. Following our prepared remarks, we will open the call for questions. Now, I will hand the call to Rick for opening remarks.

Thanks, Gail. Good afternoon, and thank you for joining us. To begin, I want to highlight the resilience and persistence of the Theravance Biopharma team in 2020. Teams that drove our programs forward and helped us lay the foundation for 2021, which we believe will be a transformational year for the company. If you've been following Theravance Biopharma, it would come as no surprise during our fourth quarter and year-end presentation, we're leading with YUPELRI. YUPELRI is the first and only once daily nebulized bronchodilator approved in the U.S. for the maintenance treatment of patients with chronic obstructive pulmonary disease or COPD. YUPELRI reached standalone profitability, as reported last quarter, and continued to grow market share each quarter last year, despite a respiratory pandemic. This profitability measurement is based on accounting for consolidation of our 35% of the profit loss split with Viatris, formerly Mylan, and then factoring in additional YUPELRI expenses by Theravance that are not shared with the interest. The interest in Theravance Biopharma commercial teams accomplished this during ongoing COVID-19 viral surges, always remaining mindful of the health and safety of our teams and the communities they serve. Our market share continues to grow in the fourth quarter, and Frank will share the details of our progress with YUPELRI in 2020. YUPELRI is one of the key pillars for transformational change. Moving to Slide 4. The second major pillar for transformational change in our pipeline. Today we'll focus on TD-0903, an investigational nebulized lung-selective pan-JAK inhibitor to treat patients hospitalized with acute lung injury due to COVID-19, who required oxygen at the time of enrollment. This is part of our inhaled JAK inhibitor portfolio. The Theravance Biopharma team moved TD-0903 rapidly from preclinical stage into the clinic last year in response to the global pandemic. Our press release today shares encouraging initial clinical data from the first part of a two-part, placebo-controlled randomized Phase 2 study, including new significant improvements in clinical outcomes, shorter hospital stays, and fewer deaths when compared to placebo. TD-0903 was generally well controlled and demonstrated evidence of improvements in several relevant inflammatory biomarkers with low systemic exposure at all doses. Part 1 of the Phase 2 study enrolled a small number of patients consistent with other dose escalation studies, and wasn't powered for efficacy. Importantly, Part 1, as I said, is a double-blind placebo-controlled study, in contrast to some of the early open-label COVID-19 studies. We allowed all patients, including those on placebo, to be on standard of care treatment, including oxygen, anticoagulants, and dexamethasone. Brett will walk through the results of Part 1 in more detail shortly. In the past year, we've pioneered pan-JAK inhibition of the lung and garnered an incredible amount of data and insights. Our team is working diligently to put the puzzle pieces together to help make a difference for patients suffering from respiratory conditions, both acute and chronic. Since we last reported, we've completed additional analysis on TD-8236, a dry powder lung-selective pan-JAK inhibitor in asthma, taking a deep dive into the gene signature and biomarker data from the Phase 1c study. The gene pathway analysis and biomarker data are consistent with target engagement in the lung. The robust body of scientific evidence from TD-8236 and TD-0903 provides confidence for us to continue the lung-selective inhaled pan-JAK inhibitor program for asthma. However, based on our current understanding of TD-8236, we decided to pause that clinical program for TD-8236 in its current form and apply our TD-8236 and TD-0903 learnings by refining the form of TD-8236, as well as expanding the number of molecules in our portfolio of inhaled JAK inhibitors suitable for dry powder inhalation, drawn from our ongoing research efforts. The full dataset for TD-8236 will be presented at future scientific meetings. Turning to our later stage programs, we continue to expect Ampreloxetine Phase 3 results for symptomatic neurogenic orthostatic hypertension and Izencitinib Phase 2 results in ulcerative colitis and Crohn's disease to read out during the third quarter of 2021, likely in three separate press releases. And finally, as I highlighted during my presentation at the Annual JPMorgan Healthcare Conference last month, the third pillar of the transformation we expect to see in 2021 is our changing financial profile. Andrew will end the presentation with a financial update that includes 2021 operating guidance. So now let's move to Slide 5, and Frank will speak to the commercial team's progress with YUPELRI.

Thanks, Rick. Remember, YUPELRI is indicated for the maintenance treatment of patients with COPD. It's the first and only once daily nebulized long-acting muscarinic antagonist that provides a full 24-hours of control for patients. In the second full year since its commercial launch, YUPELRI continued to experience solid net sales growth on an annual basis in 2020. This was achieved through our combined commercial sales and marketing efforts with our partner Viatris, formerly Mylan. Theravance Biopharma and Viatris co-promote in the U.S. with our combined sales infrastructure targeting healthcare professionals that treat the universe of COPD patients suitable for YUPELRI. We cover the hospitals, Viatris covers the community. YUPELRI year-over-year sales grew by 159% compared to 2019, in the face of many obstacles related to the pandemic. Turning to Slide 6, since the launch of YUPELRI, we've gained share in both the hospital and the community settings. Many patients with COPD experienced an acute episode serious enough to require a trip to the hospital for immediate care. The hospital then becomes a key point to switch a person with COPD from a handheld inhaler to YUPELRI. Data shows that most patients that received YUPELRI in the hospital are discharged with a prescription to continue treatment, allowing for continued YUPELRI therapy post-discharge. You can see by the market share and its growth, the strategy and collaboration between the Viatris and Theravance Biopharma teams continue to work effectively at converting business from competitive products to YUPELRI. On Slide 7, we break down Theravance Biopharma's implied 35% share of net sales for YUPELRI during Q4 of 2020, $13.6 million, totaling $50 million in revenues for full year 2020. Remember, the Viatris - Theravance Biopharma commercial partnership is a 65-35 Profit and Loss split. So this only shows our implied 35% of the YUPELRI sales. It's been reassuring to see that while the COVID-19 pandemic affected YUPELRI sales growth in 2020, specifically in quarter two, we recovered to growth in the second half of the year. Additionally, we continue to be encouraged by market feedback and performance indicators, including hospital formulary wins, patient uptake, and market access over the past 12 months. And we continue to track key performance metrics since launch. A total of 627 formulary and non-formulary accounts have ordered YUPELRI, and two-thirds of these accounts have reordered at least once. We’ve recorded 198 formulary wins, covering over 400 accounts with a formulary win rate of 91%. 85% of these formulary accounts have purchased to date, owing to a lag between formulary approval and ordering. YUPELRI's commercial coverage has increased to 74%. While we continue to provide exceptional medical information support to our customer base by fulfilling 100% of healthcare provider requests in under 30 days since launch, we remain encouraged by healthcare industry indicators, the market and customer response to YUPELRI's promotional efforts fueling YUPELRI's growth, including an emphasis on digital innovation. We will continue to expand as we work through the future stages of the pandemic. To be able to demonstrate month-over-month share gains despite COVID-19 speaks to the unique attributes of YUPELRI, the patient needs in the market and the strategies and promotional investments we have in place for the brand. So now, I'll turn the call over to Brett to delve into the TD-0903 data.

Thank you, Frank. Turning to Slide 8, TD-0903, a lung-selective nebulized JAK inhibitor is currently in development for the treatment of hospitalized COVID-19 patients, who require oxygen support. TD-0903 has the potential to inhibit the pulmonary inflammation that's associated with severe COVID-19 disease, in an effort to reduce the number of patients who require admission to ICU for assisted ventilation, the duration of hospital stay, and the risk of death. As previously reported, when the pandemic took hold around the world early last year, we moved TD-0903 quickly into the clinic, where we evaluated a range of nebulized doses of the single and multiple doses in a Phase 1 study in healthy volunteers. Moving to Slide 9, the healthy volunteer data showed TD-0903 to have a favorable safety and tolerability profile and low systemic PK. This data allowed us to initiate a two-part Phase 2 study. Part 1 was a placebo-controlled, double-blind, multiple ascending dose study, evaluating three nebulized dose levels, 1, 3, and 10 milligrams in hospitalized patients with COVID-19, compared to placebo with eight patients in each cohort. Today, we're sharing the initial data from Part 1, that has informed our confidence to progress to Part 2, our larger placebo-controlled study of 198 patients, testing the 3 milligram dose of TD-0903 added to standard of care. Part 2 is actively enrolling patients, and we expect to report results in the second quarter of 2021. Turning to Slide 10, Part 1 is a small sub-study intended to assess safety, PK, and exploratory clinical measures, but has nevertheless provided us with directional information about the potential of TD-0903 in COVID-19. TD-0903 was well tolerated in hospitalized COVID-19 patients, as it had been in healthy volunteers in Phase 1. There were no drug-related serious adverse events, although one patient in the 10 milligram cohort met predefined stopping rules and was withdrawn as a precaution due to an isolated incident of high ALT. This patient recovered with no additional consequences. From a clinical perspective, it was encouraging to see TD-0903 show a positive trend versus placebo on a number of parameters, including improved clinical status, shortened hospital stay, and fewer deaths, albeit in a small number of patients. As reported in our press release today, we saw a reduction in mean hospital stay from 22.5 days on placebo to 15.3 days for those patients on a 3 milligram dose and 15.2 days for those patients on the 10 milligram dose of TD-0903. In terms of mortality, we know that hospitalized COVID-19 patients have an increased risk of death, and in this study, there were two deaths in the placebo cohort, one death in the 1 milligram cohort, and none in the 3 or 10 milligram cohorts. We also saw evidence of improvement in several biomarkers, and in keeping with our lung-selective approach, we saw low systemic exposure at all doses. Moving to Slide 11, this histogram shows the clinical status quo for each dose during the seven-day treatment period. At a score of five, shown in pink, indicating the clinical status on admission, with darker shades of red showing levels of deterioration, and levels of grey and blue showing levels of improvement. Now, I must continue to remind you, this is a small study group. But what is noteworthy is that the number of patients in the placebo group continued to decline after admission into the hospital, with 50% requiring intubation by day seven. In contrast, none of the patients in the TD-0903 cohorts declined during the seven-day treatment period, and some patients showed evidence of improvement. Turning to Slide 12, the numerical differences between placebo and TD-0903 cohorts continued for the remainder of the 28-day observation period, with the treatment effects more marked for the 3 and 10 milligram cohorts than the 1 milligram cohort. Moving to Slide 13, TD-0903 also demonstrated the same consistent PK characteristics that had previously been seen in the healthy volunteers, with low dose-dependent concentrations in the blood, following once daily administration for seven days, that were well below those expected to inhibit systemic JAK pathways, and consistent with our intended profile for this lung-selective nebulized pan-JAK inhibitor. Note that we administered a loading dose on day one of double the dose in the 1 and 3 milligram dose groups in order to achieve steady state levels more quickly in the lung, in recognition of the fact that hospitalized COVID-19 patients on oxygen are prone to deteriorate quickly after admission. Turning to Slide 14, the data from Part 1, including safety and exploratory clinical data across all doses, informed our decision to progress the 3 milligram dose into Part 2 of the study. If the data from Part 1 is ultimately predictive of what we see in Part 2, including these data showing the improvements in oxygenation in the blood, with the 3 milligram dose compared to placebo over the seven-day treatment period, then TD-0903 could potentially offer an important additional treatment option for hospitalized COVID-19 patients. Importantly, TD-0903 offers the potential for broad pan-JAK and anti-inflammatory therapy in the lung, without increasing the risk of systemic side effects that are associated with other JAK inhibitors, including the risk of blood clotting, already a high risk in patients with COVID-19. TD-0903 also targets the lung inflammation caused by COVID-19, not the Coronavirus itself, so it should not be affected by which mutational strains of COVID-19 cause this acute lung injury. In fact, TD-0903 could potentially produce similar anti-inflammatory effects in response to other sources of acute lung injury, including influenza and other coronaviruses such as MERS and SARS. We look forward to updating you on our progress with TD-0903 next quarter, when we expect we'll have data from Part 2. I'll now turn the call over to Andrew for the financial updates.

Thank you, Brett. And before moving to our financials, let's start with an update on GSK's TRELEGY on Slide 16. As a reminder, TRELEGY is the first and only once daily single inhaler triple combination therapy approved for the treatment of COPD and asthma. Theravance Biopharma receives upward tiered royalties on global net sales of TRELEGY. At present, 75% of the income from our economic interest is pledged to service principal and interest payments on our outstanding 2035 non-recourse notes, and the remaining 25% of income is retained by us. During GSK's recent earnings call, they noted that TRELEGY continued to lead the market as a single inhaler triple therapy, with full year-over-year global sales growth in 2020 of 60% over 2019 results, generating global net sales of $315 million during the fourth quarter of 2020 and $1.1 billion for the full year. Moving to Slide 17, here we provide our 2021 financial guidance, providing a new format that focuses on key operating expense categories of R&D and SG&A, excluding share-based compensation. We believe this change provides greater transparency in how we are allocating capital and will begin to highlight the changing financial complexion of our business. For 2021, R&D expenses excluding share-based compensation, we expect to invest between $195 million and $225 million, relative to an actual expense of $230 million in 2020. For SG&A expenses, excluding share-based compensation, we are providing a range of $80 million to $90 million relative to an actual expense of $70 million in 2020. Regarding the timing of expenses throughout 2021, for R&D in particular, we expect greater spend during the first half of 2021 due to the completion of the Ampreloxetine and Izencitinib studies in Q3. With that, I'll turn it back to Rick for some closing remarks.

Thanks, Andrew. Moving to Slide 18, I remain grateful for the work of the Theravance Biopharma team and what they've been able to deliver for their passion, dedication, and commitment in 2020 as we move into 2021. We anticipate 2021 will be a transformational year for Theravance, thanks in part to YUPELRI, with its capability to continue to grow market share and sales and beyond in 2021 and beyond. GSK's TRELEGY, in which we have an economic interest, continues its strong commercial launch, each central to our changing financial complexion. Our lung-selective JAK inhibitor TD-0903 showed encouraging data in the Phase 2 Part 1 trial, and with Part 2 data not far behind, with results expected next quarter, is also part of the picture. Therapeutics, anti-inflammatories will continue to play an important role in the COVID-19 fight, making the investigation of TD-0903 that much more timely and important. Three critical data readouts in Q3 2021: Ampreloxetine Phase 3 for symptomatic neurogenic orthostatic hypertension, Izencitinib in Phase 2b for ulcerative colitis, and Phase 2 for Crohn's disease, a very busy third quarter for the company. Over the past few years, our knowledge of organ-selective drug design applied to modifying inflammation and specific tissue has increased significantly, whether targeting tissues in the lung, the gut, the eye, or the skin. We rely on our proven development and our commercial expertise, complemented by strategic partnerships and a strong capital position to create the value-driving catalysts that we expect to see in 2021. A transformational year. I'll now hand the call back to the operator for questions.

Thank you, sir. We'll have our first question from Geoffrey Porges with SVB Leerink. Your line is open.

Thank you very much, and appreciate all the additional data on TD-0903. Quick questions if I may; a few on TD-0903. Could you just remind us of the frequency of dosing over the seven-day course? And then Rick, could you perhaps give us an update on the arbitration with Innoviva, the timing for resolution of that? Another question for Brett. Look, there is obviously being a bit of noise about JAK inhibitors and their safety, and just wondering if you have been contacted or have any requests from the FDA about CV safety observations, studies, or anything where you might have any additional requirements that might be imposed on you for Izencitinib. And then Rick, lastly, could you just comment on the process and timing for an opt-in decision from J&J after you get those Phase 2 results? I know it's a lot to talk you through?

Yes, absolutely. I'll address both of my questions, and then I'll turn it over to Brett. Well, in the arbitration, the arbitration hearing is finished. We have yet to file a brief for closing arguments. We would expect results from the arbitrator late in this quarter or early in the second quarter. And because of the confidentiality provisions of the LLC agreement, I really can't go beyond that right now. So that's where we are with the arbitration. We expect to see it resolved here over the next several weeks. In terms of the process for timing on the J&J opt-in, what we do is we deliver a data package to them that begins to trigger a 90-day clock for opting. We've worked with J&J very closely throughout this process. I think they've been an extraordinary partner in the IBD program. So we've already developed what that package is; the information that's included, all of our programming has already begun. Once the study closes and we have data, we'll be able to turn that data package into J&J very quickly to start the clock. So those are my two questions. Now I'll turn it back to Brett for TD-0903 commentary on dosing frequency first.

Thanks, Rick. Hi, Jeff, thanks for your question. In terms of frequency of dosing, we administered the first dose as patients came into the hospital and were admitted requiring oxygen. Subsequent doses were given once daily, every morning for the remainder of that seven-day period, or until patients were discharged from the hospital. If they left sooner than they would obviously receive fewer doses before being discharged. But up to seven days of dosing, and it was a single administration each day; it was delivered by a nebulized device. One of the benefits of that nebulized device is that it can be given to patients who are on oxygen. But it could also be given to patients who go on to a ventilator. We actually didn't see any of our patients go onto a ventilator in the active group. But if it were required, you can introduce this nebulizer into the ventilation circuit as well. In terms of general safety, you're asking, Jeff, about presumably the most recent data now regarding tofacitinib. We've not been contacted by the FDA since the data came out, requiring any additional safety observations or any additional monitoring. We do have an established surveillance program in place looking at a broad range of known JAK inhibitor risks. Of course, with our approach, we believe that the lung-selective, or in the case of Izencitinib, gut-selective approach, should reduce the risk of systemic side effects. But nevertheless, because they're well-established, we continue to monitor for those ongoing on all of our programs. But we've not had any additional requirements from the FDA beyond routine surveillance. I think one last thing to add on that is that, of course, the tofacitinib MACE data was generated in patients with rheumatoid arthritis, and follows on a long history of data being generated in the RA space. In our case with Izencitinib, our focus is entirely on a gut-selected program. So we don't seek particularly to treat patients with conditions in other parts of the body because we believe that our therapy remains organ-selected. So there are elements of our program that distinguish us and differentiate us from the existing products when it comes to Izencitinib.

Great, thank you.

Our next question comes from Marc Frahm with Cowen and Company. Your line is open.

Hey, thanks for taking my questions, and congrats on a nice quarter. Brett, just digging into the TD-0903 data a little bit. I know you mentioned there's not a background of standard of care. But of course, it seems like standard of care for treatment COVID-19 changes every day. Can you describe what the patients in the different groups were actually receiving in terms of how much steroids, were any of them getting remdesivir or some of the antibody therapies? And were there any differences between the groups in this therapy?

Thanks for the question, Marc. Great question. It’s worth noting that we were running this study in the late summer and into the fall of last year, at which stage dexamethasone had become established as a standard of care therapy. It wasn't established in the first half of last year and for non-placebo controlled studies. If you look at the first generation of studies that were run, they were non-placebo controlled, and very few of them had background steroids, including the baricitinib study. So our study had a high degree of background use; in fact, almost all of our patients were on dexamethasone at the standard 4-milligram dose every day. All patients were also receiving anticoagulant therapy, because by the time our study started, it was fairly well understood that clotting was a background risk factor. Now we started a study in the UK and then moved into parts of Eastern Europe, where remdesivir was not an established standard of care. We've implemented Part 2 of the study into a much larger range of countries, including the U.S., Brazil, Argentina, and South Africa. We've seen not only a broader reach across sites but we're now also seeing a more established use of remdesivir. Therefore, the Part 2 study is likely to include a greater use of remdesivir, but we saw very little of that in the Part 1 study. We also deliberately excluded patients on tofacitinib in Part 1 because of the potential for interference with IL-6. In truth, we weren't confident that tofacitinib had actually established itself as the standard of care. I think there's still a question mark about that.

Yes. How about...

I am sorry. I beg your pardon. It’s tocilizumab, yes toci is the drug I'm referring to.

Okay. And what about, I'm guessing, since remdesivir was not standard of care most in place since then, also the antibody therapy was also not being pursued in those new sites.

That's correct. So I think what we've seen is that therapies such as convalescent plasma and tofacitinib are being reserved really for patients who cannot tolerate dexamethasone, which is consistent with current guidance that is now emerging based on evidence generated over the last six to eight months of different therapies.

Our next question comes from Douglas Tsao with H.C. Wainwright. Your line is open.

Hi, good afternoon. Thanks for taking my questions. Just if you could Brett, maybe walk us through the decision to proceed with the 3 milligram versus the 10. It seems that perhaps, on some of the metrics, it seems like maybe the 10 does better sort of in the first seven days or by day seven, but by day 28, you start to see some better trends in the 10 mg, although I get it that these are super small numbers. But in that same vein, why not potentially investigate the 10 milligram?

Thank you. Great question, Doug. I think I'd start by describing the way we approach our assessment of all of our JAK inhibitors: we look at therapeutic index. So we place a great deal of emphasis on the evidence of safety as well as on the efficacy side. I mentioned that one of our patients in the 10 milligram group triggered a stopping criterion for an isolated elevation on one of the liver function tests, ALT. Now, it's not clear whether that was actually associated with therapy. There are other reasons why patients can have elevations in liver function tests in hospital. But out of an abundance of caution, we acknowledged that that patient had met that stopping rule. When we looked at the treatment differences between 3 and 10, there were some modest differences between 3 and 10. Both seemed to provide comparable benefits. So on balance, we felt that the 3 would have an optimal balance of both safety and efficacy. A reminder that we did give a doubling dose in the 3 milligram group as well, so actually, those patients get 6 milligrams in total on the first day. We did not do that with a 10 milligram group because our modeling had suggested they would not need that loading dose. For those reasons, we felt that the 3 was really optimal for further assistance.

Okay, great. That's really helpful. And then just turning to YUPELRI, if I look at the trends, in terms of the hospital market share, it looks like in the third quarter, it increased a little bit and then really came back strong right in the fourth quarter. I know there was some talk or sort of confusion around sort of the use of a nebulized therapy in the context of COVID. Do you think that was what attributed to that step back in the third quarter? Or was it just a lack of access given the situation in terms of being able to get into institutions to talk about the product? Thank you.

Hey, Frank, you want to handle that?

Yes. It was mostly attributed to pulmonologists being very busy treating patients with COVID-19, coupled with the lack of access to healthcare institutions, and frankly, doctors’ offices were closed. The other factor that compounded it is pulmonologists, based on our marketing research, we know that pulmonologists are reticent to change therapy or initiate a new therapy unless they do a proper live exam, including spirometry, in other words, not telemedicine. So, all of those factors caused the dip that you see there in the third quarter. It recovered nicely in the fourth quarter, and it appears the recovery is continuing in the beginning of 2021.

Okay. And then just frankly, a quick follow-up. I mean, I know towards the end of the year, we did see another surge in infections, and that seems to be coming down pretty dramatically. Did you see any sort of impact on trends at the end of the fourth quarter and into the first quarter? Or was it really just limited to that third quarter? Thank you.

Well, yes, the business recovered nicely in December. In fact, December was our biggest month of all the months involved in the pandemic, dating back to March. We also see a desire on the part of pulmonologists to want to see patients, to want to have patients come in, get checked out, because they haven't checked out in quite some time. So, we are seeing as the country is seeing a bit of a recovery and the vaccines are beginning to roll out, we're seeing an increase in the number of visits to pulmonologists.

Our next question comes from Liisa Bayko with Evercore ISI. Your line is open.

Hi, there. Can you maybe talk a little bit more about how you are thinking about read-through from anything you've seen with COVID into the asthma program, and maybe a little bit more about what you're doing to tweak the asthma program? And what we should expect on timing there? And then I'll have one more question after that. Thanks.

Yes, I'll start, and then I'll transition it over to Brett. I mean, I think clearly, the biomarkers in TD-0903 that we saw move the number of other metrics that we follow give us an understanding of how a JAK inhibitor can be used in an acute hyper-inflammatory state like COVID. It informs the asthma program. The other aspect of this, the work over the last couple of months has been incredibly informative, really dissecting the gene pathway data from the 1c study. I think we were having broadly and directionally the effect that we wanted to have on a number of gene pathways. Keep in mind, if you remember the 1c study, these patients were on inhaled corticosteroids. We were seeing a change in proteins on top of what these patients were experiencing on steroids. So this was another important piece of the puzzle. Brett?

Thanks, Rick. Just to add to what Rick was saying, Liisa, in the asthma program with TD-8236, we now have consistent evidence of target engagement, whether we look at nitric oxide that's excluded in the breath or if we look at cytokines that are released into the fluid that fills the lungs, or even in the gene signature assays. All of that is telling us that if we deliver a JAK inhibitor into the lungs, we're able to modulate that inflammation. Clearly this data with TD-0903 in COVID-19 is further validation of our ability to modulate inflammation in these different conditions. One last thing to add is that, of course, TD-0903 prior to COVID was being developed for a chronic condition; it was being looked at for lung transplantation. Although the COVID signal is in acute conditions, it gives us some encouragement that this anti-inflammatory mechanism may be of utility in chronic conditions as well, such as in reducing the rejection rates in lung transplantation.

I think the other point to close, Liisa, that ties back to other publications that we've had is we've seen now in the COVID-19 study a reduction in CRP, a systemic marker of inflammation. As a reminder, in Izencitinib Phase 1b, even though the drug was almost completely contained to the intestinal tissue and less systemic circulation, we also saw marked reductions in CRP in patients with ulcerative colitis. So we know that we're reducing systemic markers of inflammation by simply focusing on the organ that is inflamed.

Okay. And so I guess, as it pertains to the asthma program, what are the next steps then?

Yes. Brett, do you want to start, and then I'll close?

Apologies, sorry. I think as Rick was saying earlier, we were really taking the learnings from these programs. We've decided that for the lead form of TD-8236, we're going to pause that development program. We're investing our efforts in the portfolio of JAK inhibitors that could be brought forward to evaluate in asthma and other inflammatory conditions. But we're really looking to pick the best candidates among these; this is something that we have previously done, for example, in the beta agonist program, where we considered several iterations before landing on the optimal performing agent, which went on to become a component of the combination therapies like TRELEGY. So this approach of looking for the best rather than first past the post I think could be well applied to JAK inhibition.

And just to add to that, I think that's where our focus is. Our focus today is on the development of a medicine that can stand the test of time in a chronic condition that is delivered via a dry powder inhaler for asthma patients. We have an understanding of how good that drug has to be. I think the quality of the drug itself certainly creates a barrier to entry for others. So the next steps are quite simply working through the TD-8236 in another form and bringing other potential DPI JAK inhibitors forward into translational science and then continuing to move TD-0903 forward. Most importantly, getting the data from Part 2 of the Phase 2 study, which is going to give us a larger data set than what we've seen today. However, the Part 1 data that we do have is now a JAK inhibitor that is not in a disease model but in a disease, showing albeit small numbers showing an effect of reducing inflammation in the lung in that disease.

Our next question comes from Anupam Rama with JPMorgan. Your line is open.

Hey, guys, thanks so much for taking the question. Just a quick one for me on Izencitinib. The press release noted, and I think you guys talked about on the call that UC and Crohn's disease readouts, they're going to be provided separately in Q3. Can you maybe talk to us a little bit about the cadence of the disclosures if you can? And I might have a follow-up, I'm not sure.

Sure. Yes, Anupam, really unfortunately, we can't give you much more granularity right now. The studies are ongoing. We'll be as forthright and transparent in the communication as we can be. We understand the criticality and materiality of the data for both studies and also for Ampreloxetine. But unfortunately, we're not going to be able to get more granular right now.

Great. Thanks for taking my question.

Our next question comes from Vikram Purohit with Morgan Stanley. Your line is open.

Great. Thanks for taking my question. So my first one was a follow up on Izencitinib, specifically with regards to the J&J opt-in. I was wondering if you could just clarify for us for that 90-day period that you mentioned that J&J has, is that 90-days per indication? Or is the process more that they get a data package that combines both data sets for UC and Crohn's, and then they have 90-days based off of that data package to make a decision for both indications? That's my first question.

Yes, it's a good question. We anticipate delivering the data package that has both sets of data in it to J&J for their decision.

Understood. To the best of your understanding with J&J, are they going to be making separate decisions for UC and Crohn's? Or is it a decision for a broad development program in IBD based on both datasets?

Well, I think they'll consider both datasets. I don't have a perspective on whether one is more important than the other. I think they're going to be looking at both data sets. Obviously, the ulcerative colitis data set is a more advanced data set being in Phase 2b, and now we're actually rolling patients out of the 2b program into the Phase 3 maintenance study. Whereas the Crohn's study is a Phase 2 sort of proof of concept. I'll just ask Brett to add anything.

Yes, just perhaps one additional comment, Vikram. And that's that it's not a sense that we don't know who we're talking to with Janssen colleagues. We are working day to day with these individuals on the ongoing conduct. They had an integral part in the original design of these studies. This has been a real hand-in-glove partnership. We continue to work very closely with them in anticipation of these readouts. So that 90-day period is really used to maximize their understanding of the data. A lot of the planning work is going into this right now being done in collaboration with Janssen, ensuring that we use this window of time effectively.

Okay, understood, that's helpful. And then just one follow-up shifting gears to your earlier stage programs like 5202 and the inhaled oxide inhibitor you spoke about previously. Just wanted to get a sense of what the status is with those programs and what the next milestones are that we should be looking for?

In 5202, we continue to work with Janssen on the next stage of that program, likely targeting a development pathway in celiac disease. With the IL-5 inhibitor, we've been going through a Phase 1 single ascending and then multiple ascending dose-ranging study of the inhaled IL-5 inhibitor. We're continuing to work through that. Before the end of this year, certainly, we should have Phase 1c or b, however you like to characterize it, with some exposure in patients with idiopathic pulmonary fibrosis in that program. So, Brett, anything to add there?

No, I think you summarized it well, Rick. Nothing to add.

Okay, great. Thank you.

Our next question comes from Brian Skorney with Baird. Your line is open.

Hey, good afternoon. Thanks for taking the question. Two questions. I mean, to start, I guess, I think the other week, Glaxo filed a pretty brutal 13D on Innoviva. And I'm just wondering if there's anything to take away from this vis-à-vis the arbitration decision. I think it's the first time we've sort of seen publicly Glaxo weigh in and they kind of call out specifically Innoviva's intent to be divergent from what the intent of the parties rolled out at the time of separation. So is that admissible? Is Glaxo a party to the arbitration? Do they have a sort of role in testifying here?

Yes, Brian. Listen, thanks for the question. I really can't get into the arbitration process itself. I think we were surprised as anybody with regard to the filing. To get more color on the filing, I think it probably should come from GSK, because we weren't aware that it was going to be done.

Got it. And then I have another question on TD-0903, just in terms of the ALT threshold achieving the stopping criteria at the 10 mg dose. Can you outline what that threshold was, and then whether or not there was any concomitant bilirubin increases? Have you guys looked at all at systemic administration of TD-0903 in any of the animal models? And if so, is the liver the end organ toxicity there?

Thanks, Brian. I can describe ALT. We put a threshold across all of our protocols for four times the upper limit of normal. This patient triggered the stopping rule based only on ALT; there was absolutely no change on AST, bilirubin, or any of the other liver function parameters. There were no additional issues or clinical manifestations with this patient. It was purely a single biochemical finding. Because we continue to monitor for these things, and because it was stipulated in the protocol, we withdrew therapy as a precaution. We continue to routinely monitor for liver toxicity in our preclinical toxicology studies, and these prioritize that potential risk. Liver toxicity is not a concern in the animal models we use for TD-0903 due to their low concentrations in systemic circulation.

Got it. Thanks, that's helpful.

Our next question comes from Joseph Stringer with Needham and Company. Your line is open.

Hi, everyone. Thanks for taking our question. Just wanted to switch to Ampreloxetine and the launch, given that there will be all back in 2021. I was just wondering if you could comment on potential thoughts on pricing given sort of the two opposing forces of generic entry and that potentially better profile for Ampreloxetine. Secondly, how does the generic entry potentially affect the target patient population for the drug? Would you see it as more inadequate responders or treatment-naive patients? Maybe some color on that? Thanks.

Yes, I'll start. Just give Brett a heads-up that I'm going to come to him after a couple of remarks. I think we see Ampreloxetine as a dramatically different medicine than Northera droxidopa. The fact is that, in the label, the effect of Northera does not last very long in terms of efficacy on neurogenic orthostatic hypertension because it is effectively an agonist. There are probably some tachyphylaxis that happens with longer exposure to droxidopa. Whereas a drug like Ampreloxetine, administered once a day, works more like an antagonist, making use of the body's own norepinephrine while droxidopa introduces exogenous norepinephrine into the system. We see Ampreloxetine finding a home in a much larger patient population. We also hope to see what we've seen in other studies with Ampreloxetine that it does not lead to supine hypertension, an issue that plagues droxidopa’s use. For all those reasons, we remain committed to the Ampreloxetine program, as we believe it will be highly differentiated.

Yes, I think you said it well, Rick. Again, this is about therapeutic index, just as it is with the rest of our portfolio. Ampreloxetine is optimized to drive efficacy when it's needed, taking the body's own endogenous norepinephrine and allowing it to last longer. That tends to occur in the early part of the day or when patients are eating, and the levels of norepinephrine need to be high during that time. Ampreloxetine maintains those. When patients go to sleep at night and the nervous system shuts down, they do not produce as much norepinephrine and our drugs do not potentiate any additional effect because the body is not producing norepinephrine. All these factors should set us apart from droxidopa. We know, for example, even today that if we see efficacy at four weeks in our pivotal Phase 3 study, the FDA would view that as distinct and improved on the Northera data, which is efficacy at one week. The Northera label, in fact, is a conditional approval; they still don't have full approval because there's outstanding data required with the originator company. One question mark about the generics is what happens if Lundbeck, the originator, can't support those labeling requirements, and what implications that may have on generic substitutions as well. For all those reasons, we remain really committed to the Ampreloxetine program.

Thank you. There appear to be no further questions on the phone. I'd now like to turn the conference back over to Mr. Winningham. Please go ahead, sir.

Thank you, operator. I'd like to thank everybody for joining us for this call. We're very excited about the year ahead and what we have the capability to do as an organization. We look forward to updating you as the quarters roll by for 2021. Please have a good day and stay safe. Thank you.

This concludes today's conference call. We thank you for your participation. You may now disconnect. Everyone, have a great day.