Troubled Theravance Offloads Rights To Top Asset To Royalty Pharma For $1.5 Billion

by Joy Lin
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After a series of trial flops and a major staff layoff, Theravance Biopharma is selling off its royalty rights on the sales of GSK’s blockbuster respiratory medication, Trelegy Ellipta, to Royalty Pharma in a deal worth over $1.5 billion. The transaction will give Theravance some breathing space to pay off its debts and refocus its R&D priorities. 

Additionally, Royalty will invest in Theravance’s development of ampreloxetine, an investigational treatment for multiple system atrophy (MSA), a rare nervous system condition. 

Details Of The Deal 


Under the terms of the agreement, Theravance will receive a $1.1 billion upfront payment, up to $250 million in milestone payments based on Trelegy net sales between 2023 and 2026, and outer year royalties of around $200 million. 

In exchange, Royalty will gain the 85% of sales-based royalty rights Theravance has on worldwide net sales of Trelegy, a marketed treatment for asthma and chronic obstructive pulmonary disorder (COPD). Trelegy sales grew 37% to around $400 million in the first quarter of 2022. Furthermore, Royalty will buy the remaining 15% of the rights from Innoviva for $282 million. 

Royalty will also invest up to $40 million in ampreloxetine, for $25 million upfront and $15 million upon its first approval. If approved, Royalty will receive royalties of 2.5% on annual global net sales up to $500 million and 4.5% on sales over $500 million. 

Debt Repayments And R&D Priorities


With new cash in its hands, Theravance will move to pay off its debts and various expenses, which would still leave it with $430 million on its balance sheet, the company said. 

Even without the cash flow from Trelegy, Theravance will still enjoy milestone payments from sales of Yupelri, an approved respiratory drug co-developed with Viatris’ Mylan.

Theravance’s other focus lies in the development of ampreloxetine. A new Phase 3 trial on the drug is expected to begin in early 2023. Ampreloxetine will be a risky gamble for Theravance, as the drug failed to outperform the placebo in a previous Phase 3 last year, which led to the company axing 75% of its staff. 

Alongside the staff layoffs, Theravance also discontinued most of its non-respiratory programs with the exception of ampreloxetine and a Johnson & Johnson-partnered JAK inhibitor called izencitinib in a Phase 2 for Crohn’s disease. Izenticinib is also on thin ice, after failing a Phase 2 for ulcerative colitis last year. 

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