Ladies and gentlemen, good afternoon. At this time, I would like to welcome everyone to the Theravance First Quarter 2015 Financial Results Webcast and 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. [Operator Instructions] Today's conference is being recorded. And now I would like to turn the conference over to Eric D'Esparbes, Chief Financial Officer of Theravance. Please go ahead, sir.

Good afternoon, everyone and thank you for joining us. With me on the call today is Mike Aguiar, our Chief Executive Officer. On today's call, Mike will review the highlights from the quarter and I will review our financial results. Following our comments, we will open up the call for questions. Earlier today, Theravance issued a press release announcing recent corporate developments and fourth quarter and full year 2014 financial results. A copy of the press release can be found on our website. Before we get started, we would like to remind you that this conference call contains forward-looking statements regarding future events and the future performance of Theravance. Forward-looking statements include anticipated results and other statements regarding Theravance's goals, plans, objectives, expectations, strategies and beliefs. These statements are based upon the information available to the Company today and Theravance assumes no obligation to update these statements as circumstances change. Future events and actual results could differ materially from those projected in the Company's forward-looking statements. Additional information concerning factors that could cause results to differ materially from our forward-looking statements are described in greater detail in the Company's press release and Form 10-K for the quarter ended March 31, 2015 to be filed with the Securities and Exchange Commission. I would now like to turn the call over to Mike Aguiar, our Chief Executive Officer. Mike.

Thank you Eric and good afternoon everybody. This is a very important time at Theravance and we are making good progress towards our 2015 goals. In particular I'm very pleased with last week’s approval by the FDA of BREO for the treatment of patients 18 years and older in the U.S. with asthma which according to IMS represents approximately 92% of total U.S. LABA ICS prescriptions for asthma. This is a significant catalyst for Theravance that provides an important new treatment option for patients and physicians dealing with a serious disease that substantially expands the market opportunity for BREO in the U.S. and it sets Theravance up for a successful 2015. In building Theravance as a standalone company, one of our primary objectives was to create an efficient low cost company with a short path to profitability. I'm pleased to report that in the first quarter of 2015 we have made further progress towards this goal by reducing operating expenses and expanding operating margin versus Q4 last year. Our second important goal of the spin was to return capital to shareholders. As part of this initiative we paid a cash dividend of $0.25 per share on March 31, 2015 and today declared another dividend of $0.25 payable on June 30 to stockholders of record as of the close of businesses on June 12, 2015. Turning now to our programs RELVAR/BREO is our lead respiratory program partnered with GSK for the treatment of patients with chronic obstructive pulmonary disease or COPD and asthma, it is a combination inhaled respiratory medicine consisting of vilanterol, a long-acting beta2 agonist or LABA, and fluticasone furoate, an inhaled corticosteroid, or ICS, both delivered in the ELLIPTA dry powder inhaler. As of March 31, 2015, this medicine has been approved in 58 countries and launched in…

Thanks, Mike. Before I present our Q1 financial results, I want to remind you that as a result of the separation of Theravance Biopharma from Theravance, Inc in mid 2014, there have been a number of adjusting entries to prior period that reflect the financial impact as discontinued operation accounting. This will result in limited comparability between Q1 financials, our previously reported results and our future operating results. Total revenues for the first quarter included $10.1 million of royalties earned and $0.2 million of revenues from collaborative arrangements offset by $3.5 million of amortization of capitalized fees from a related party. Royalty revenues earned include $9 million for BREO and $1.1 million for ANORO. As Mike stated earlier, while prescription trends for RELVAR/BREO and ANORO are continuing to show positive weekly growth during the first quarter, this growth was offset during Q1 by a few factors some of which we've discussed in our February call. First we experienced a widening growth to net spread reflective of improved coverage at lower net pricing especially with express script CVS Caremark and an extended coupon program by GSK. Both of which we view as important investments in the success of BREO and ANORO. Second Q4 2014 sales for RELVAR in Japan were higher associated with inventory stocking of one month dosage form due to the end of the Ryotan restrictions. Finally, we experienced foreign exchange headwinds related to the appreciation of the U.S. dollar especially against the euro as the appreciation of the U.S. dollar reached up to 20% in some markets across the globe from the previous quarter. Our operating costs decreased during the first quarter due to the completion of the transaction – transition activities following the separation of Theravance Biopharma. Total operating expense for the first quarter of 2015 were…

Thank you Eric. In summary I'm pleased with the progress of our programs and on increasing volume and getting approval for Asthma in the U.S., our primary focus for the remainder of 2015 will remain on maximizing the value of our base businesses collaboration with GSK. This includes working with GSK to optimize the commercial success of both BREO and ANORO and continuing the global rollout of both products. We're encouraged by the approval of BREO for asthma in the U.S. the recent commercial trends of both products and remain optimistic about the future prospects of Theravance. I would now like to turn the call over to the conference facilitator and open up the call for questions.

Thank you sir. [Operator Instructions] And our first question comes from Tyler Van Buren of Cowen and Company. Your line is open. Q – Tyler Van Buren: Hi. Thanks for taking my question. I guess, just on the strategic front, in terms of the various strategic potential options that you are considering in terms of bringing in additional royalty streams, clearly that seems like a long term opportunity, but at what point in time, in the inflection of these launch curves from a financial stand point, do you all become comfortable enough to start examining those opportunities, if you are not already, and is the potential redomiciling still in the works? Are those two related, as well as potential other royalties in the future, heard an update from Glaxo this morning on the Close Triple we’re just hoping you could confirm timing on that program, as well as the vilanterol monotherapy program. Thanks so much. A – Michael W. Aguiar: Great. And thanks for the question, Tyler. There is few things to talk about here. So no updates on the Closed Triple or on vilanterol, Closed Triple, as I think everybody knows is in the middle of the Phase III program, there are a number of studies underway, the results from the totality of that probably are not due here for a couple of years yet at this point. So no updates on either of those. With regard to our prioritization, what we working on, again the most important thing we can do right now, is continue to make progress with GSK on our base business. I think in one of the calls, when we first completed the separation, I laid out the priorities, number one was to get the company set up for public company status, I think that…

Our next question comes from Ronny Gal with Bernstein. Your line is open.

Good afternoon. And thank you for taking my question. I got two. First one is regarding Advair detailing, can you just, I don’t know what GSK said on the call today, do we know if GSK will continue to detail Advair in parallel to BREO as essentially the focus is shifting essentially completely or near to detailing BREO. And second, higher gross to net adjustment still don’t speak very clearly to what you might want to call just realized profit or net profit. So if you kind of look at the projection going forward couple of years that you’re working on with GSK, should we think about the realized price of BREO and ANORO as being flat, increasing or decreasing. A – Michael W. Aguiar: Thanks, Ronny. So on the Advair question, there are changes that are happening here but I really would like to punt that back over to GSK, since that’s an Advair question as opposed to a BREO question. The important announcement today was the creation of these separate groups, particular, a BREO salesforce and an ANORO sales force, which obviously is something we’re pretty supportive of; if you have a rep with a relatively short time with a doctor and there is a question in your mind about what’s the priority or what the messaging, right, this clears that up a lot. So I would just say we are quite pleased with the changes we’re aware of, I really wouldn’t want go into much more detail beyond that particularly for something like Advair and would have to punt that one back to GSK. So on the second question, higher gross to net again there is a fairly complex answer to this. As I think a lot of folks in the call we had talked about this…

Okay. So I'm going to ask you one more question about projections. So GSK have given long term projections for the respiratory franchise saying that they will globally in 2020 equal the 6 billion pounds that came in 2014, but that will be spread across more products, so essentially nine products contributing as opposed to being primarily Advair. The question that I have for you is primarily are BREO and ANORO still the hallmarks of that GSK 6 billion pounds or should we think about them being equal in size to the other seven products in that portfolio? A – Michael W. Aguiar: Again I couldn’t make comments on every product in that portfolio, I think our view here at Theravance has been in the spaces where we play and I am very distinctly not including something like single agents steroids because we don’t have a product in that particular mix and I wouldn’t know how GSK has reflected that in their mix or not. But in the space that we play with GSK which is largely the LABA ICS space and again in the bronchodilator space, I think that the three programs that we have that are either approved today or that are in Phase 3 so you would add to that the close triple, those probably occupy the disproportionate amount of what we see as the opportunity set, today as you think about guidelines, as you think about treatment paradigms et cetera those are really the three combinations that have more likely not the potential to be disproportionate contributors. So I wouldn’t be able to make a comment around the entirety of their nine fit products that we would not even be playing in that space but our view here for quite a while has been the combination products rather than single products are going to ultimately be the biggest players in these spaces and if you look at something like guidelines it would really point towards one of those three products or all three of those products has been the likely contributors to that. So we will see where things go certainly in the short term here and the short term on the finance before the triple potentially comes to market which is several years down the road, I think our view is that BREO and ANORO have the highest probability of being the biggest contributors in that group.

Okay. Thank you very much. A – Michael W. Aguiar: Thanks Ronny.

Thank you. Our next question comes from Gena Wang of Leerink Partners. Your line is open.

Thank you for taking my question. So for both BREO and ANORO U.S. sales its seems like the reporting number much less than what that implied sales, so just wondering in addition to widening gross to that with their significant inventory destocking in 1Q? A – Michael W. Aguiar: Hi, Gena, it’s Mike. I wouldn’t want to make any specific comments that are too direct on that one. There clearly as always some level of inventory movement. The [Indiscernible] of course IMA is on place among all the major players which limits the movement around but there is always something that is going on at some levels just, normal inventory fluctuation. So there was probably something there. I think that as we described here you would expect normal, kind of year-over-year, quarter-over-quarter inventory fluctuates, going to be some small portion of it to date early in launch has the potential to be perhaps little bit larger then later in the launch. And the addition to that there was a couponing program, that was started here and my opinion is pretty successful so far, that was certainly a measurable contributor to that an then you have some of the recent changes that have happen with the additional coverage that kicked I mean for example, the BREO coverage is kicked on January 1 and typically what you do when you have new coverage as you have to adjust your estimates for sales throughout in the channel things like that. So there were number of moving pieces, I’m not sure I would in any one particular went down on all of those and the end of the day what we really view as the most important metric is scripts. We had talked about the growth from the widening for period of time as…

I would add is, of course if we saw those two slops converging at some point in time, then, of course we would have conversation around it. So I don’t think it would be case that we will get down to the last nickel before it dawned on us to something was going on. So we feel pretty comfortable today. Obviously, we watch that closely because it is important to us, but it is a relatively early warning signal that you would theoretically see these slops converging and see that ahead of time before there was a big issue. Q – Gena Wang: Okay. So my last question is the stock option for SG&A. This quarter seems a little bit high versus last quarter, would this be the benchmark we should think of for the remaining of 2015. A – Michael W. Aguiar: Is the question about total effects or a stock based compensation? Q – Gena Wang: It’s stock base compensation. A – Michael W. Aguiar: Right. It really is a function of grants and accruals, we’ve viewed a stock based compass of non-cash OpEx, so at the end of the day, it really follows the cycle of grants and accruals. So from that perspective, we can’t make any specific forecast on this one, which is why we gave guidance for OpEx for the year before stock based comp especially for that reason. Q – Gena Wang: Okay. So maybe I will ask like, is that 1Q usually the time you would issue the stock option?

So yes, when you have new issuance, you have additional accruals that add up. But then it is spread out over divesting period. So that’s the – if you wanted the basic mechanic of those accruals. A – Michael W. Aguiar: Yes Gena, I would just add one of those things, so Eric, exactly correct, if you could spread out over period of time but there is some lumpiness to it and portions of that related to the separation. So that’s why we are being a little bit increased size in this because there will be some lumpiness this year and if not because our stock option are down, it’s due to some corks of win we did the separation here. So again, I would just expect a little bit of lumpiness here and it’s not going to be anything other than again non-cash compensations. Q – Gena Wang: Okay. Thank you. A – Michael W. Aguiar: Thanks.

Thank you. Our next question comes from Brian Skorney of Robert W. Baird. Your line is open. Q – Brian Skorney: Hey, good afternoon, guys. Thanks for taking my question. I guess just when we start thinking about modeling out the launch in the asthma indication for BREO. How we should think about formulary restrictions given other some segmentation in the asthma market between kids and adults and the label is only adults. Could you just walk through kind of your expectation of how access to formulary can still be negotiated despite the divergence between your label and as say Adware [indiscernible] on the courts. A – Michael W. Aguiar: Thanks, Brian. I don’t expect to have any particular issues on reimbursement, we’ve got the existing reimbursements in place, reimbursement typically as a product – by products reimbursement as opposed to an indication or an age category or whatever. So I don’t expect to see anything on that. That being said, of course, we are clearly not going to be out promoting this for in the age category that’s not in the label or anything like that. But I just don’t expect that that’s going to result in restriction, we have the coverage we’ve got, and the coverage is in place today so the good news is unlike when we launch in COPD we are not starting from 0. We are starting from the mid-70s and up for BREO for example so I think we are feeling pretty good about the overall coverage is out there. And then last point again is the age group that we have covered is greater than 90% of the total volume of LABA ICS prescription that are written for asthma in the United States anyways. So we’ve covered the vast majority of patients with our label. So I don’t expect to see any particularly hiccups on that I suppose something could happen somewhere. But we are just not expecting any big drama around that. Q – Brian Skorney: And I guess just to jump off from the share announce mode, do you have a feel for what the breakdown in terms of patients new to all therapies, what were percentage of adults versus kids? A – Michael W. Aguiar: I don’t have at the top of my head, we share a good number for you, I don’t have that information in front of me. Q – Brian Skorney: Thanks guys. A – Michael W. Aguiar: Thanks Brian.

Thank you. [Operator Instructions] Our next question comes from Stephen Willey of Stifel. Your line is open.

Yes thanks for taking the question. Just kind of wondering I guess if you look at where commercial BREO reimbursement is at this point I think CSK was around 65% as of the end of the quarter just kind of wondering if maybe kind of look at those plans whereby you made still not be covered or covered with kind of non preferred I am just wondering if those plans are expected to conduct reviews either on the buy annual kind of June, July timeframe or towards the end of the year, and I guess does that having label now somehow facilitates that process in terms of either care jumping or getting coverage, thanks. A – Michael W. Aguiar: Yes I don’t have any specific forward-looking statements on where we are going to be with coverage and you are correct about the numbers that you had noted around 55% commercial, this is really gave me the hard one the items we talked about a little bit earlier which was couponing because of that program I don’t expect to see a significant impact on coverage meaning patients who are getting rejected because again, patients should be able to get in with these coupons so where we continue to work on improving coverage improving tearing all that’s the year, yes, I don’t think I have a singular answer of what are all these other companies are that we haven’t got coverage lift whether they are on a middle of June, July cycle or something else I think again answers are all over the place. But I don’t really expect to see any big issues around coverage on a commercial at a Part D again in deed we have done some market research area, at Theravance and that issue is cropping far, far frequently today and then it was before and so I think we are feeling pretty good about the overall coverage status of the products at this point in time.

Okay. Thanks. A – Michael W. Aguiar: Great. Thanks, Steve.

Thank you. It appears we have no further question on the phone. I’d like to turn the conference back over to Mr. D'Esparbes for closing remarks.

All right. Thank you very much, operator. And thanks everyone for participating. Just to mention we will be participating at the BOMA Healthcare Conference next week and Mike will be presenting so hopefully we look forward to see some of you over there. Have a great day.