Dive Brief:
- Royalty management company Zymeworks is buying Theravance Biopharma, announcing Monday a $929 million deal that gives it partial rights to Theravance’s COPD drug Yupelri, along with payouts due from its co-development of Trelegy with GSK and an antibiotic for hospital-acquired infections.
- Per deal terms, Zymeworks will pay $17 a share, along with a second potential payout should Zymeworks license or sell a drug called ampreloxetine that Theravance has developed for a type of low blood pressure. Zymeworks is partially financing the deal by borrowing $350 million from Omers Life Sciences, which will be paid off with Yupelri's cash flow.
- Theravance initiated a strategic review of its business in 2024, which accelerated earlier this year when ampreloxetine missed the primary goal of a Phase 3 trial in nervous-system driven low blood pressure in people with the rare disease multiple system atrophy. In a statement, independent Board Chair Susannah Gray said “this transaction achieves the greatest value for Theravance Biopharma shareholders.”
Dive Insight:
The story of Theravance Biopharma begins and ends with corporate executives making deals centered on royalty streams.
The company was spun out of an older company called Theravance Inc., which had a long-running partnership with GSK to develop its respiratory drug portfolio that includes Breo and Anoro. The original company renamed itself Innoviva in 2016, focused on managing the GSK revenue stream, and, in addition, buying rights to drugs and ownership stakes in life sciences startups.
Spinout Theravance Biopharma was tasked with advancing and commercializing the experimental drugs developed by the original company, although it also had residual economic rights to GSK respiratory drugs such as Trelegy. That work led to approval of Yupelri in 2018, which is partnered with Viatris, and until earlier this year, ampreloxetine.
With ampreloxetine’s failure, the valuation of Theravance largely resided in the Yupelri revenue stream — which amounted to $75 million in 2025 — an expected Trelegy milestone payment of $100 million expected next year, and its cash balance of around $400 million, wrote Leerink Research analyst David Risinger in a March client note.
The offer from Zymeworks, which only recently entered the royalty-management business, constitutes a 22% premium from its closing price on March 3, the day it released the ampreloxetine data, and 10% from its average price since then. Theravance shareholders could be due an additional payout based on outlicensing or sale of ampreloxetine, in which case they would receive 80% of net proceeds.
Zymeworks forecasts the deal to be profit-making immediately upon its close, which is expected by the end of the year.
Stifel analyst Stephen Willey, who covers Zymeworks, praised the company’s management for a “creative” deal structure that minimizes cash outlays. With the Omers loan structure and Theravance’s existing cash, Zymeworks has only committed $219 million in immediate cash to the deal, $100 million of which should be offset by the Trelegy milestone payment.
With a minimal cash outlay, Zymeworks said it will be able to continue an announced $125 million share buyback program, on which it has already spent $35 million.
