According to Theravance Biopharma, the company is selling its stake in Theravance Respiratory Company (TRC), which received royalties from sales of GSK’s Trelegy Ellipta fluticasone furoate / umeclidinium / vilanterol DPI. The deal with Royalty Pharma is worth up to $1.5 billion, including $1.1 billion up front, the company said. Theravance Biopharma owns 85% of TRC; Innoviva (formerly Theravance, Inc.) owns 15%.
Innoviva separately announced that it was selling its stake in TRC to Royalty Pharma for $282 million up front and a potential $50 million future milestone payment. Innoviva noted that it is retaining royalty rights to Breo/Relvar fluticasone furuoate / vilanterol DPI and Anoro Ellipta umeclidinium / vilanterol DPI. According to Innoviva, TRC also held interests in a number of companies including InCarda Therapeutics, which TRC is transferring to Innoviva.
Trelegy Ellipta was approved by the FDA for the treatment of COPD in 2017 and for the treatment of asthma in 2020. In May 2021, Innoviva announced that it was buying back GSK’s 32 million shares in the company but that GSK would continue to pay royalties to Innoviva on Trelegy, Breo/Relvar, and Anoro. In September 2021, Theravance Biopharma announced that it was restructuring to focus solely on its respiratory portfolio.
In the announcement of the Royalty Pharma deal, Theravance also said that it would immediately begin a process to repay outstanding debts related to Trelegy and that it expects to become debt-free as a result. In addition, the company said that it expects to “approach breakeven cash flow in the second half of 2022 without the cash flows from its interest in Trelegy royalties, driven by disciplined spending within R&D and the growth of Yupelri.” Yupelri revefenacin inhalation solution was approved by the FDA for the treatment of COPD in November 2018, and Theravance initiated a Phase 4 trial of the inhalation solution earlier this year.
Theravance Biopharma Chairman and CEO Rick E Winningham commented, “Royalty Pharma is an industry leader in identifying world class therapeutics and structuring creative financing transactions that support innovative biopharma companies holding royalty interests. We believe this transaction for Trelegy royalties delivers on the strategic value of our economic interest in this important therapy for COPD and asthma patients. This transaction underscores our commitment to maximize shareholder value by eliminating debt, accelerating the return of capital to shareholders and strengthening our position as a biopharmaceutical leader. . . . It’s our firm belief that, upon closing this transaction, Theravance Biopharma will operate from a position of financial strength and will maintain its focus on Yupelri’s continued US commercial performance.”
Royalty Pharma CEO Pablo Legorreta said, “This transaction reflects our confidence in the significant value that Trelegy delivers as a triple-combination therapy for COPD and asthma patients, and GSK’s continued global commercial excellence. This transaction highlights our ability to provide capital at scale and structure creative funding solutions, allowing Theravance to pursue important strategic initiatives, including the advancement of their internally-discovered, late-stage therapeutic ampreloxetine.”
Innoviva CEO Pavel Raifeld said, “We are very pleased to have entered into this agreement with Royalty Pharma, a market leader in healthcare royalty acquisitions. This transaction allows us to capture an attractive valuation for our share of Trelegy Ellipta economics, enhances our cash position at a time of meaningful market dislocations, and demonstrates our continued commitment to leaving no stone unturned in our efforts to maximize shareholder value. We look forward to continuing our long-standing collaboration with GSK for Relvar/Breo Ellipta and Anoro Ellipta.”
Read the Theravance Biopharma press release.
