Theravance Biopharma Inc
NASDAQ:TBPH
Earnings Call Analysis
Summary
Q3-2023
The company has shown remarkable resilience and financial growth through challenging times, including the COVID-19 pandemic. They have successfully grown YUPELRI's net sales annually since 2020. With focused cost-reduction strategies, operating expenses have decreased by 70% from $370 million in 2020 to a projected $115 million in 2023. Additionally, the company has eliminated all debt by monetizing its TRELEGY interest for $1.1 billion, which also funded a shareholder return of $325 million through share buybacks, reducing share count by 34%. They are now debt-free and are redirecting capital towards growing YUPELRI and advancing ampreloxetine. This quarter's results exceeded expectations, particularly in cutting general and administrative (G&A) expenses and collaboration revenue hit a record $15.7 million. The company expects to complete its remaining $30 million capital return program by year-end and forecasts non-GAAP profitability in Q4 due to higher projected sales of YUPELRI, despite not expecting to reach a $50 million TRELEGY milestone in 2023. Instead, they look forward to potential milestone payments from TRELEGY sales in 2024 and beyond.
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Ladies and gentlemen, good afternoon. I'd like to welcome everyone to the Theravance Biopharma Third Quarter 2023 Conference Call. [Operator Instructions] Also, today's conference call is being recorded. And now I would like to turn the call over to Rick Winningham, Chief Executive Officer. Please go ahead, sir.
Good afternoon, everyone, and thank you for joining the Theravance Biopharma Third Quarter 2023 Earnings Results Conference Call. Turning to Slide 2. I'd remind you that this call will contain forward-looking statements that involve risks and uncertainties, including statements about our development pipeline, expected benefits of our products, anticipated timing of clinical trials, regulatory filings and expected financial results. Information concerning factors that could cause results to differ materially from our forward-looking statements is described further in our filings with the SEC. On Slide 3, I'm again joined today by Rick Graham, our Head of Research and Development; Rhonda Farnum, Theravance's Chief Business Officer; and Aziz Sawaf, our Chief Financial Officer. Moving to Slide 4. Throughout the year, we've communicated progress on several strategic objectives for the company, namely: to grow YUPELRI while completing and disclosing the results of the PIFR-2 study; initiating and advancing our Phase III CYPRESS study; and advancing -- achieving non-GAAP profitability during the second half of the year, subject to YUPELRI's continued growth. Based on our third quarter performance, we continue to make good progress against these objectives. Beginning with YUPELRI, our combined team achieved $58.3 million in total third quarter net sales, representing growth of 9% year-on-year and the highest quarterly net sales results since launch. Highlights include another outstanding performance of our hospital-based commercial organization, continued growth in the retail channel and further market share gains. We completed our PIFR-2 study enrollment in the third quarter and continue to expect to share top line data in January. In a new and exciting development, we've just learned that Viatris' Phase III study of YUPELRI in Chinese patients with moderate to very severe COPD was positive and that, that data were consistent with the previous findings of YUPELRI's strong efficacy. Our partners at Viatris plan to move forward with a registrational filing in China in mid-2024. As a reminder, COPD is a leading cause of morbidity and mortality in China with over 100 million individuals affected, and Theravance stands to receive development and sales milestones as well as low double-digit royalties on sales in China and adjacent territories under our expanded 2019 agreement with Viatris. Moving to ampreloxetine and CYPRESS. We continue to open sites globally during the quarter, and we presented 2 abstracts at the International Congress on Parkinson's Disease and Movement Disorders in August, and we will present additional data later this month at the American Autonomic Society in Puerto Rico. Next, on the financials. We reported a non-GAAP loss of $700,000 approximately during the quarter, coming close to our objective of achieving non-GAAP profitability. This was driven by a combination of YUPELRI growth and effective expense management. We returned another $31 million through our capital returns program bringing us to a total of $295 million since inception and putting us in a position to return the final $30 million in the fourth quarter. On Slide 5, I'd like to take a moment to level set how we see Theravance today. Theravance has become a streamlined organization focused on maximizing the value of 2 key assets: YUPELRI, a growing source of cash flows with a bright future; and ampreloxetine, a rare neurological asset roughly 1.5 years from top line data. Theravance is currently debt-free with no need to access the capital markets to realize the full potential of these assets. In short, we believe we embody a unique profile in biotech at a time when the capital markets have been challenging. As we complete the substantial return of capital program, pay down of debt, Board enhancements and expense streamlining that the company undertook following the sale of our TRELEGY royalty interest, management and the Board continue to comprehensively review all elements of the business, the strategy and opportunities to maximize shareholder value. Now turning to Slide 6. Rick Graham and I will cover ampreloxetine's potential in MSA, beginning with the addressable patient population. We've discussed in the past, MSA is a rare neurological disorder affecting 50,000 people in the United States, of which approximately 35,000 to 45,000 suffer from symptomatic nOH. While this represents a substantial opportunity on its own, we're also exploring ways in which we can make ampreloxetine available globally since our hope is to improve the lives of as many MSA patients suffering from nOH as possible given the profound impact this condition can have on the quality of life of patients and their caregivers and their limited treatment options currently available. If you turn to Slide 7, you can see that the number of MSA patients estimated to have symptoms of nOH increases by roughly a factor of 5, if one includes Europe, Japan and China. Given the need that remains for patients worldwide, we are committed to exploring ways to reach patients outside the U.S. as well. On Slide 8, I'd note that Theravance retains global rights to ampreloxetine, granted IP extending to 2037 in the U.S. In addition, we received orphan drug designation earlier this year. As many of you know, orphan drug designation confers 7 years of market exclusivity to a product as well as exemption from user fees. However, it's also particularly important when it comes to pricing. The Inflation Reduction Act mandates that Medicare negotiate price reductions for certain drugs with high spending after 9 years of commercial availability for small molecules. Drugs with a single orphan designation such as ampreloxetine are excluded from this requirement, which protects their value and supports the investments made in their development. Before I turn the call over to Rick Graham, I'd like to address the transition in R&D leadership we announced today. Rick will be leaving the company with Áine Miller taking over as Head of Development. Although he'll be staying for several months to ensure a successful transition as we approach the completion of the PIFR-2 study, and the CYPRESS -- with the CYPRESS study well underway, now is an ideal time to begin this transition. Over his tenure at Theravance, Rick built an exceptional development organization, established many of its key clinical capabilities Theravance relies on for its success, and we're thrilled to have Áine guide the organization through CYPRESS' conclusion, ampreloxetine's potential filing and approval and beyond. With her proven track record of strategic and regulatory leadership, Áine has been ready to take on this role for some time, and she will be an exceptional Head of Development. With that, I'll turn the call over to Rick to make some additional comments on ampreloxetine. Rick?
Thanks, Rick. Let me begin on Slide 9 by providing some additional detail on the unmet need in MSA for patients with nOH as well as why we believe we can quickly and successfully move ampreloxetine toward NDA filing and approval. First, it's important to recognize that nOH symptoms are persistent upon sitting or standing and, without effective treatment, lead to deconditioning that can have lasting effects. Moreover, the combined effects of symptomatic nOH and MSA disease progression have a significant impact on quality of life over time. As we highlight here, studies evaluating the effects of nOH symptoms on patients' quality of life consistently highlight a substantial negative impact despite the availability and use of therapeutic interventions. Currently approved therapies to treat orthostatic hypotension carry safety warnings for supine hypertension, which is an important side effect impacting use, especially amongst the many MSA patients that have preexisting supine hypertension resulting from their disease. Ampreloxetine works differently than available therapies using a patient's own norepinephrine, which we believe is why there was no impact on supine blood pressure in the Phase III Study 0170 and no signal for supine hypertension in over 800 patients in healthy volunteers studied to date. In the 0170 study, ampreloxetine demonstrated a durable and clinically relevant treatment effects compared to placebo in MSA patients as well as a broad and consistent effect on the 6 cardinal symptoms of nOH evaluated by the OHSA composite score. If this efficacy and safety profile is replicated in the ongoing Phase III CYPRESS study, we believe ampreloxetine will bring compelling value to patients and caregivers. So let's talk more about CYPRESS on Slide 10. In the past, we have described ampreloxetine's mechanism of action and why it's particularly well suited to address the symptoms of nOH in MSA patients. Ampreloxetine works on intact peripheral nerves in MSA patients to raise endogenous norepinephrine levels with an approximate 1.5-fold increase after 4 weeks of administration as shown in our prior clinical trials. What's of particular importance is the impact that ampreloxetine treatment showed on standing systolic blood pressure in Study 0170. Patients with neurogenic OH experience persistent decreases in blood pressure upon sitting or standing, which often leads to debilitating symptoms, which impact their sense of independence and their quality of life. As a norepinephrine reuptake inhibitor, ampreloxetine restores vascular tone and has increased blood pressure by increasing the endogenous norepinephrine, thereby impacting symptoms with the reduced potential to impact blood pressure during the resting state. After 22 weeks of treatment in Study 0170, ampreloxetine was able to prevent blood pressure decrease in patients remaining on therapy, where those entering the randomized withdrawal period on placebo saw a marked decrease in blood pressure after 3 minutes of standing. Finally, in the same study, patients receiving ampreloxetine experienced an improvement of 1.6 points relative to placebo on the OHSA symptom composite score, which was nominally statistically significant as well as clinically significant. Taken together, we believe CYPRESS' potential for technical success lands at the upper end of the range of studies conducted in rare and neurological diseases in recent years. Moving to the bottom of the slide, I'll briefly recap ampreloxetine's regulatory outlook. As a reminder, the Phase III Study 0170 included patients with MSA, Parkinson's disease and pure autonomic failure. Upon completion of Study 0170, the company held a Type C meeting with the FDA to discuss the prespecified analysis of MSA patients. The FDA agreed with both our interpretation of the 0170 study results and the proposal to use OHSA composite score as the primary endpoint for CYPRESS. In addition, given the results of 0170 and the seriousness of nOH in MSA, the FDA agreed that we could meet the substantial evidence standard required for full approval with one additional successful well-controlled trial. This is CYPRESS. Finally, we believe it's important to understand that we have already completed the substantial body of work necessary to file an NDA for ampreloxetine should CYPRESS be successful. Thus, we believe that the time from top line disclosure to filing and potential approval could be expedited. Before I turn it over to Rhonda, I'd like to say a few words about my upcoming departure from the company. I'm committed to ensuring a seamless transition to the new Head of Development, Áine Miller, and I'm genuinely thrilled for Áine and fully support her appointment. I'll continue with the company through early 2024 with several deliverables, including the readout of the PIFR-2 top line results and capitalizing on the current momentum we have with CYPRESS while then transitioning the accountability to Áine. Thank you to Rick Winningham for his trust and mentorship, to the colleagues and friends I've worked with over the past 8 years and to our external stakeholders for your support and confidence in the company. I'm optimistic about the path ahead and the future success of Theravance Biopharma. So now I'll turn the call over to Rhonda to discuss YUPELRI.
Thanks, Rick. Let's begin on Slide 12 with a snapshot of YUPELRI's value to Theravance. As I'll cover in greater detail in a moment, YUPELRI enjoyed another successful quarter of growth bringing its last 12-month sales to approximately $216 million. As we always note, Theravance is entitled to 35% of YUPELRI's profits through our collaboration with Viatris. In addition to the direct contribution of YUPELRI profits in the U.S., we also stand to achieve potential YUPELRI value through milestones and royalties through our relationship with Viatris. One important source of this value is in China and adjacent territories where Viatris just completed a successful Phase III registration-enabling study. This study, for which we plan to make additional details available shortly, demonstrated YUPELRI's strong lung function benefits and the advantages of LAMA therapy as foundational for the maintenance treatment of COPD. On the basis of these results, our partners at Viatris plan to file for approval in China in mid-2024. We stand to receive up to $45 million in milestone payments associated with YUPELRI monotherapy as well as low double-digit tiered royalties on sales in these territories. Turning to Slide 13. You can see the continuation of YUPELRI's net sales performance with total sales up 9% year-on-year and 6% quarter-on-quarter to $58.3 million. Theravance's implied 35% share of net sales for YUPELRI during the third quarter of 2023 was $20.4 million. This represents the highest level of sales achieved since launch, benefit from growing demand generation in both the hospital and community settings. We believe that this is a direct result of our strategic initiatives, including educating on concomitant use of YUPELRI with a LABA, transition of care coordination and fulfillment support, which we see impacting important key performance indicators internally. On Slide 14, I'll cover our hospital performance, which remains strong and consistent relative to previous quarters. As we continue to note, the hospital point of care is a strategic catalyst for the higher persistency community use of YUPELRI despite accounting for a smaller percentage of the total business. Many patients with COPD experience an acute respiratory episode serious enough to require a trip to the hospital, at which time caregivers may consider switching to or adding YUPELRI as part of a treatment regimen. Thus, our ability to generate demand in the hospital setting has a meaningful and growing impact on subsequent YUPELRI prescribing in the community setting. As you can see on the right-hand side of the graph, Q3 hospital doses sold represents the highest quarterly volume of YUPELRI units sold since launch and increased 41% year-over-year. Turning to Slide 15. You can see that our hospital performance translated into another improvement in YUPELRI's overall share of the hospital-based long-acting neb market. Year-over-year, we improved nearly 3 percentage points to 16.1% overall. As we have indicated in the past, this metric reflects the progress we are making both in terms of the number of accounts that have placed YUPELRI on formulary as well as our team's success in supporting all neb protocol implementation and therapeutic interchange adoption. These initiatives are the foundation of our transition of care strategy, and we've achieved a higher market share in those hospitals where we have successfully implemented these programs. Consistent with past quarters, the majority of patients receiving YUPELRI in the hospital during the quarter received a prescription at discharge to continue YUPELRI in the community setting. Turning to our market share development in the community setting. On the right-hand side of the slide, it is much the same story. At 30.2%, quarterly YUPELRI long-acting neb market share represented an all-time high and an improvement of over 1 percentage point sequentially. Picking up on this performance on Slide 16. The combined efforts of Theravance and Viatris drove another solid performance in the retail channel, which represents approximately 40% of overall community volume. As depicted on the left-hand side of the slide, total prescription growth at retail accelerated slightly to 9% sequentially and 30% year-on-year. While prescriptions filled at retail remain our best real-time metric to gauge total community demand trends, durable medical equipment or DME fulfillment still accounts for a larger portion of overall community volume, but our ability to report trends lags a quarter behind in reporting due to the Medicare Part B adjudication process. As such, retail activity alone may not be indicative of net sales performance in any given quarter due to a number of factors, including inventory, which we've experienced from time to time. Turning to our new to product performance on the right-hand side. Volumes declined 4% quarter-on-quarter but grew 40% year-on-year. While overall YUPELRI sales exhibit only modest seasonality, this particular figure tends to fluctuate more significantly due to the seasonal factors as we -- as seen with other respiratory therapy trends in the market, such as exacerbation frequency, which in turn correlates with hospital and doctors' office visits and potential therapy modifications. Based on the continued success of our recently introduced commercial initiatives as well as internal performance indicators, we would expect to see continued strong results in the fourth quarter. We also remain excited about the potential growth opportunities for the overall YUPELRI brand going into 2024 and beyond. The GOLD report treatment recommendation of LAMA therapy being foundational, in addition to our concomitant use messaging, provides continued opportunities for YUPELRI to be considered as a switch or add-on therapy within the existing long-acting nebulized market. Also, there remains a sizable population of COPD patients who could benefit from YUPELRI, including those inappropriately using short-acting agents as maintenance therapies as well as patients who remain uncontrolled on handheld-only maintenance regimens, with the latter patient population being the focus of our PIFR-2 study. We continue to project that we will share the top line results of the PIFR-2 study in January, and we are hopeful that a positive result will open further growth opportunities for the product here in the U.S. With that, I will turn the presentation over to Aziz to review the financials. Aziz?
Thanks, Rhonda. Beginning on Slide 18, I'd like to start by discussing how our transformation in recent years and disciplined approach to capital allocation are driving today's financial performance. First, even through a challenging COVID environment, we've been able to contribute to YUPELRI's net sales growth each year since 2020. Second, we've taken significant action to reduce costs. By focusing our portfolio and reducing headcount, we've achieved a 70% reduction in operating expenses, including share-based compensation, going from $370 million in 2020 to a projected $115 million in 2023. Third, we eliminated our debt. In 2022, the company monetized its TRELEGY interest for $1.1 billion, using the proceeds to achieve a debt-free balance sheet and initiate, and now largely complete, a program to return $325 million of capital to shareholders via share buybacks, which has reduced our share count by approximately 34%. By implementing these strategies, we've been able to focus our capital allocation on 2 high-value initiatives: growing YUPELRI and progressing ampreloxetine towards a significant value inflection point. Turning to the quarter. Slides 19 and 20 cover our detailed financial results, which came in better than expectations on the expense side. I'll cover the highlights on Slide 21. Starting with collaboration revenue, we reported $15.7 million recognized through our Viatris partnership, representing an all-time high. Regarding expenses, shortly after the elimination of research in late Q1, we introduced an initiative aimed at streamlining our G&A organization. This initiative led to a reduction in G&A expenses and was the largest driver behind the overall decrease in spend from Q2 to Q3. We remain dedicated to assessing additional cost-cutting initiatives within G&A and maintaining a disciplined approach to expense management. In the quarter, we reported a GAAP loss of $9 million and a non-GAAP loss of $0.7 million with cash burn, excluding cash outflow for share buybacks, of $2.6 million. It's important to note the main distinction between GAAP and non-GAAP is that the GAAP metric incorporates noncash share-based compensation. Going forward, we will begin highlighting both GAAP and non-GAAP results so that investors can gain a better understanding of both our non-GAAP metric, which can be used as a proxy for cash flow, and overall GAAP profitability, which takes into account the share-based compensation. During the quarter, we bought back approximately $31 million worth of shares and ended the period with $134 million in cash and equivalents. We have approximately $30 million remaining on our capital return program, which we expect to complete by year-end. These repurchases reduced our share count by 3.2 million during the period, leaving us with approximately 51 million of shares outstanding as of quarter end. Moving to Slide 22, where I'll comment on our financial guidance. For R&D expenses, excluding share-based comp, we are currently tracking towards the lower end of guidance of $35 million to $45 million. In Q4, we expect a slight increase in R&D expenses relative to Q3 actuals due to higher projected enrollment and site initiation for the CYPRESS study. For SG&A expenses, excluding share-based comp, we are trending towards the upper end of our guidance range of $45 million to $55 million. We anticipate Q4 SG&A expenses to be relatively flat when compared to Q3. As discussed in the Q&A section of our previous earnings call, one of the key factors influencing our operating expense trends is the change in the proportion of allocated overhead. This change is a result of our decision to eliminate research earlier this year, which has led to a lower proportion of overhead allocated to R&D and a higher proportion allocated to SG&A. For total expenses, excluding share-based comp, we are now trending below the midpoint of guidance of $90 million. We expect to generate non-GAAP profitability in Q4, which will be primarily driven by the expectation of increased net sales from YUPELRI. And from a GAAP perspective, we expect to improve on the $9 million loss in Q3 driven again by increased net sales and an expected income tax benefit due to the filing of our 2022 U.S. federal income tax return in October. To conclude, on Slide 23, I'll provide an update on our potential to earn milestones on global net sales of TRELEGY. GSK delivered another strong quarter of growth with quarterly and year-to-date net sales reaching $675 million and $2 billion, respectively, up 22% and 25% when compared to the same period a year ago. To achieve our first $50 million milestone in 2023, TRELEGY would need to reach $2.9 billion for the year, which based on the Q3 results, we now believe is unlikely. Nonetheless, with the results achieved year-to-date that have demonstrated continued sales growth, we believe we are well positioned to attain milestone payments in 2024 and beyond as the first $25 million milestone for 2024 is also set at $2.9 billion and the higher $50 million milestone at $3.2 billion. As a reminder, the milestones starting in 2024 are not cumulative. For both milestones to be achieved in 2024, we would only receive a total of $50 million, not $75 million. With that, I'll turn the call back to Rick for closing remarks. Rick?
Thanks, Aziz. On Slide 26, I'll finish by summarizing our intentions in the context of how we began. As we approach the end of 2023, our highest operating priorities are to continue to maximize the value of YUPELRI by continuing with our growth initiatives and taking full advantage of PIFR-2 should we achieve a positive outcome. Simultaneously, we'll work hard to bring CYPRESS to a successful conclusion while ensuring as many patients as possible have access to ampreloxetine should the results support regulatory approvals. We look forward to achieving milestones and royalties related to both TRELEGY and YUPELRI in the future. We'll do this by keeping a sharp eye on expenses and managing the business as efficiently as possible. As always, we remain committed to the best path forward to drive value for our shareholders. I thank you for your time, your attention. And now I'll turn the call back over to the operator for questions.
[Operator Instructions] Our first question comes from David Risinger with Leerink Partners.
Congrats on the updates. I have 2 questions, please. First, regarding ampreloxetine CYPRESS study, could you please remind us about the process after you enroll the last patient into the open-label portion of the study in the second half of '24 and when we should expect top line efficacy results? And then separately, could you provide some more detail on the YUPELRI ex U.S. economic opportunities and potential timing?
Sure, Dave. Rick, do you want to kind of just outline verbally for David the open label and randomized withdrawal?
Yes, happy to do it. Thanks for the question, David. So as a reminder, the study design is a randomized withdrawal design for CYPRESS, similar to the 0170 study with some small differences in duration of the open label and randomized withdrawal period. But to answer your question, what happens after open label is that patients get randomized to either remain on ampreloxetine or go to placebo, and that is an 8-week duration for the open-label period. So once they get through that 8 weeks, then we will start working on cleaning the data and working toward a top line result. Now keep in mind, we're still early in the study conduct process, and we continue to add sites. But as Rick said in his opening remarks, we're approximately 1.5 years from top line data is our estimate today.
Dave, I think your next question was on YUPELRI economics?
Yes, ex U.S. So there was...
Yes, ex U.S. economics.
Yes, I can take that one, David. This is Aziz. So yes, there's 2 components of the ex U.S. economics, the first of which, since we just highlighted the China opportunity and the fact that Viatris were going to file the application next year. The economics are up to $52.5 million in milestones for development and sales. Now of that $52.5 million, $45 million is related to the monotherapy. So the $45 million is in play right now. Of the $45 million, and this will be outlined in our 10-Q when we file in a couple of days, $7.5 million of that is related to an approval -- a regulatory approval milestone, and the rest of the $37.5 million relate to sales milestones, which we don't break out currently. So the next milestone for the China opportunity would be $7.5 million if the China regulatory authorities approve the product. And then in addition to the development and sales milestones, we have low double-digit tiered royalties in China. Outside of China, which I think is probably going to be a bit of a smaller opportunity, we're actually already getting low double-digit to mid-teen royalties. We have a little -- we had one recognized Q4 of last year, we have a tiny bit each quarter, but they're pretty much immaterial. I would focus most of the modeling on the China opportunity.
Our next question comes from Douglas Tsao with H.C. Wainwright.
So just maybe starting on YUPELRI. We saw this quarter sort of a new high in terms of your hospital market share at 16.1%. But if I look at the sort of hospital sales in terms of doses, it looks like it was relatively flat to the first quarter. So can you maybe just help us understand some of those dynamics because if I look at the share versus the first quarter, you're up like 120 basis points. So some really nice performance there. So just what's going on in the overall market?
Rhonda, do you want to describe the Q1 and then Q3?
Yes. So Doug, as you recall, Q1 was definitely a high performance quarter for the hospital business. Certainly, we had some situation associated with the challenges in short-acting shortages that I think certainly contributed a bit to that as well as what we typically experience in Q3 of each year seasonally, is the lower kind of opportunity and what is reflected with reduction in exacerbations, reduction in hospital admissions as well as even doctor appointments for these patients. It's typically the lower of the year. But to look at the growth that certainly has returned within this quarter and seeing that build over 2 successful quarters at the beginning -- at the first half of the year, I'm very pleased to see the market share continue to grow, this being built off of the continued acceptance and adoption of protocols and formulary approvals, both in systems as well as individual accounts that the team has been able to accomplish. So that's continuing to contribute to this ongoing build across the hospital business for the team. So that's contributing to the 16.1% market share.
Okay. And as a follow-up, when we look at the retail side, and I know that's not necessarily what you have as much focus on. We saw really nice quarter-on-quarter growth at 9%. We did see a slight decline in terms of the new to product Rx. So just help us understand or put some context around that trend.
Yes. So the refill is certainly continuing to occur for those patients that had already received or have been prescribed in the prior quarter. So the TRx is continuing to build, which I think you already appreciate that growth. But looking at the metric or the indicator associated with new to product, seeing that typically to be lesser for most respiratory products. As I mentioned earlier, Q3 is typically for respiratory the lower quarter.
Okay. And Rhonda, are most of the retail scripts originating from a hospitalization still?
We still see a majority of patients that are exposed to YUPELRI during -- in their inpatient stay, which I'll remind you is for a shorter persistency. It averages around 3.5 days per stay. And those patients exiting, the majority are leaving with a script in hand to be prescribed in the outpatient or maintenance care setting.
[Operator Instructions] Our next question comes from Eva Privitera with TD Cowen.
Congrats on the great quarter. I have a question about YUPELRI. Can you maybe talk about YUPELRI's growth trends in the DME segment versus retail since it's the larger portion? And how are you and your partners thinking about growth in that segment?
Yes. Rhonda, yes, go ahead.
Yes. So as are reflected in the call, we have the challenge with the particular view not being real time for DME. It's due to the adjudication process associated with Medicare Part B scripts, and that lags approximately a quarter. So the best I can reflect on performance for you in its totality is in contrast to Q2 performance. So the DME space grew approximately 6% in Q2, and I'll contrast that to what we reported in the retail space, which was 8% for Q2. So unfortunately, I don't have the latest DME view to offer other than we continue to focus and ensure that for patients that are being supported and filled through that channel gets the best possible support to ensure that, that progress is moving as quickly as possible and equating to the highest level of fulfillment regardless of where they choose to go, whether that's DME or conventional retail.
And a follow-up question on the PIFR-2 trial. Assuming that the trial is successful since these patients are already on label, would publication of the data be gating to driving uptake? And what would be the potential time line for publication?
I can take that, Rick.
Yes. Go ahead.
So you've hit the guiding factor head-on. Publication is vastly important, and the team will move as expeditiously as possible to ensure we are published in the highest standard peer-reviewed journal so that we will then have the ability to educate on those data. And given the variability on time lines associated with individual peer-reviewed journals, I can't really speak to one specifically.
It appears we have no further questions on the phone. I'd now like to turn the conference back to Mr. Winningham for -- please go ahead, sir.
Yes. Thank you very much. I'd like to thank everyone for joining us today. We're pleased with the progress that we made this quarter. We look forward to continuing that progress in the fourth quarter and into 2024 as we really align resources behind the 2 growth drivers of the company, YUPELRI and ampreloxetine. So thank you very much for joining us, and have a great day.
Thank you. This concludes today's conference call. We thank you for your participation. You may now disconnect.