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Theravance Spikes on $1 Billion Deal for COPD Treatment

Shares for biopharmaceutical developer and marketer Theravance (THRX) are on a tear to start off the week, after the company announced a last-minute $1 billion royalties deal with Irish drug maker
Michael Teague is a staff writer for Equities.com. His previous experience includes three years as the associate editor of Los Angeles-based Al Jadid Magazine, a bi-annual review of the arts & culture of the Middle East, where he contributed many articles on the region in the form of features and book & film reviews. His educational background includes a BA in French literature from the University of California, Irvine, where he developed a startling proclivity for anything having to do with the 19th century.
Michael Teague is a staff writer for Equities.com. His previous experience includes three years as the associate editor of Los Angeles-based Al Jadid Magazine, a bi-annual review of the arts & culture of the Middle East, where he contributed many articles on the region in the form of features and book & film reviews. His educational background includes a BA in French literature from the University of California, Irvine, where he developed a startling proclivity for anything having to do with the 19th century.

Shares for biopharmaceutical developer and marketer Theravance (THRX) are on a tear to start off the week, after the company announced a last-minute $1 billion royalties deal with Irish drug maker Elan Corporation (ELN).

Elan has recently been fending off take-over efforts by Royalty Pharma, who last month bid $5.7 billion for the company. For $1 billion, Elan will acquire 21 percent of the royalties that Theravance receives from its partnership with Glaxo SmithKline (GSK) from a series of four respiratory drugs currently under development by the two U.S. companies.

The deal includes, Breo Ellipta, a new treatment for chronic obstructive pulmonary disease (COPD) which was just approved by the FDA last Friday, along with another COPD treatment called Anoro Ellipta, as well as two others that are in earlier stages of development.

The move comes as Elan attempts to expand past its focus on neurological treatments after the company sold half of its stake in the multiple sclerosis drug Tysabri to the U.S. company Biogen Idec (BIIB) for $3.25 billion and royalties.

While Elan denies the move has anything to do with Royalty Pharma’s take-over bid, the company had intended to use the Tysabri sale to finance a purchase that would buffer its limited portfolio.

Meanwhile, Theravance CEO Rick Winningham said in a press release on Monday that the agreement “complements our strategy to facilitate and accelerate the return of capital to our stockholders and build value, consistent with our recently announced plan to separate Theravance into two entities, Royalty Management Company and Theravance Biopharma”.

Shares for Theravance were up over 15 percent on Monday to $40.32.

Elan Corporation was down almost 3 percent to $11.43, while Glaxo SmithKline edged a slight 0.2 percent gain to $51.72.