Future Contingent Milestone and Royalty Assets	12 Months Ended
Dec. 31, 2024
Future Contingent Milestone and Royalty Assets
Future Contingent Milestone and Royalty Assets	9. Future Contingent Milestone and Royalty Assets The Company recognized future contingent milestone and royalty assets related to the sale of its equity interests in Theravance Respiratory Company, LLC (“TRC”) to Royalty Pharma in July 2022 (the “TRC Transaction”). The future contingent milestone and royalty assets represents the fair value of potential future milestone payments and royalties (collectively, “Contingent Consideration”) related to worldwide net sales of GSK plc's (“GSK”) TRELEGY^® ELLIPTA (“TRELEGY”) as described below. From and after January 1, 2023, for any calendar year starting with the year ended December 31, 2023 and ending with the year December 31, 2026, upon certain milestone minimum royalty amounts for TRELEGY being met, Royalty Pharma is obligated to make certain cash payments to the Company, which are not to exceed $250.0 million in aggregate (the “Milestone Payments”). Additionally, the Company will receive from Royalty Pharma 85% of the royalty payments on TRELEGY payable (a) for sales or other activities occurring on and after January 1, 2031 related to TRELEGY in the US, and (b) for sales or other activities occurring on and after July 1, 2029 related to TRELEGY outside of the US (the “Royalties”). The Contingent Consideration was initially measured at fair value utilizing a Monte Carlo simulation model to calculate the present value of the risk-adjusted cash flows estimated to be received from the Contingent Consideration. The fair value model involved significant unobservable inputs derived using management’s estimates. Management’s estimates were based in part on external data and reflected management’s judgements and forecasts. The primary significant unobservable input was the estimate of forecasted TRELEGY net sales which is considered a Level 3 fair value input. In July 2022, the Company estimated the fair value of the Contingent Consideration to be $194.2 million which was presented on the consolidated balance sheets as “Future contingent milestone and royalty assets”, and the discount rate utilized in the valuation model was 7.83%. The Company accounted for the Milestone Payments and Royalties of the Contingent Consideration as a combined single unit of account. As a result, the Company will not recognize any income associated with any potential future Contingent Consideration payments until the cumulative payments received exceed the original $194.2 million fair value. The Company reassesses the carrying value of the Contingent Consideration when indicators of impairment are identified. For the year ended December 31, 2023, the minimum royalty amount related to the Milestone Payments was not achieved, and for the year ended December 31, 2024, the minimum royalty amount related to the Milestone Payments was achieved. As of December 31, 2024, a $50.0 million receivable was recorded on the consolidated balance sheets based on guidance under ASC, Topic 450, Contingencies, and the Contingent Consideration’s carrying value was correspondingly reduced from $194.2 million to $144.2 million. In February 2025, the Company received the $50.0 million payment from Royalty Pharma, and the remaining aggregate Milestone Payments available to the Company was $150.0 million. The Contingent Consideration is subject to counterparty credit risk, and the carrying value of the Contingent Consideration represents the maximum amount of potential loss due to credit risk. To date, the Company has not recorded any credit losses related to the Contingent Consideration.

Future Contingent Milestone and Royalty Assets

12 Months Ended

Dec. 31, 2024

Future Contingent Milestone and Royalty Assets

Future Contingent Milestone and Royalty Assets

9. Future Contingent Milestone and Royalty Assets

The Company recognized future contingent milestone and royalty assets related to the sale of its equity interests in Theravance Respiratory Company, LLC (“TRC”) to Royalty Pharma in July 2022 (the “TRC Transaction”). The future contingent milestone and royalty assets represents the fair value of potential future milestone payments and royalties (collectively, “Contingent Consideration”) related to worldwide net sales of GSK plc's (“GSK”) TRELEGY^® ELLIPTA (“TRELEGY”) as described below.

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

TRELEGY in the US, and (b) for sales or other activities occurring on and after July 1, 2029 related to TRELEGY outside of the US (the “Royalties”).

The Contingent Consideration was initially measured at fair value utilizing a Monte Carlo simulation model to calculate the present value of the risk-adjusted cash flows estimated to be received from the Contingent Consideration.

The fair value model involved significant unobservable inputs derived using management’s estimates. Management’s estimates were based in part on external data and reflected management’s judgements and forecasts. The primary significant unobservable input was the estimate of forecasted TRELEGY net sales which is considered a Level 3 fair value input. In July 2022, the Company estimated the fair value of the Contingent Consideration to be $194.2 million which was presented on the consolidated balance sheets as “Future contingent milestone and royalty assets”, and the discount rate utilized in the valuation model was 7.83%. The Company accounted for the Milestone Payments and Royalties of the Contingent Consideration as a combined single unit of account. As a result, the Company will not recognize any income associated with any potential future Contingent Consideration payments until the cumulative payments received exceed the original $194.2 million fair value.

The Company reassesses the carrying value of the Contingent Consideration when indicators of impairment are identified. For the year ended December 31, 2023, the minimum royalty amount related to the Milestone Payments was not achieved, and for the year ended December 31, 2024, the minimum royalty amount related to the Milestone Payments was achieved. As of December 31, 2024, a $50.0 million receivable was recorded on the consolidated balance sheets based on guidance under ASC, Topic 450, Contingencies, and the Contingent Consideration’s carrying value was correspondingly reduced from $194.2 million to $144.2 million. In February 2025, the Company received the $50.0 million payment from Royalty Pharma, and the remaining aggregate Milestone Payments available to the Company was $150.0 million.

The Contingent Consideration is subject to counterparty credit risk, and the carrying value of the Contingent Consideration represents the maximum amount of potential loss due to credit risk. To date, the Company has not recorded any credit losses related to the Contingent Consideration.