) first quarter 2013 loss of 39 cents per share was in line with
the loss pegged by the Zacks Consensus Estimate. The first
quarter 2013 loss compared unfavorably with the year-ago earnings
of 93 cents per share. Results in the reported quarter were hurt
by lower revenues and higher operating expenses.
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Revenues in the first quarter of 2013 plummeted to $1.3 million
from $127.1 million a year ago. We note that revenues in the
year-ago quarter benefited from the accelerated recognition of
deferred revenue of $125.7 million pertaining to Theravance's
erstwhile agreement with
Astellas Pharma Inc.
) for the development and commercialization of the injectable
antibiotic Vibativ. The amount was recognized by Theravance
following the termination of the deal in Jan 2012. Revenues in
the first quarter of 2013 were short of the Zacks Consensus
Estimate of $3 million.
Research & development (R&D) expenses were down 20.4% to
$26.4 million in the first quarter of 2013. The decline in
R&D expenses was primarily attributable to the completion of
the phase IIb study on TD-1211 (for the treatment of chronic,
non-cancer pain patients with opioid-induced constipation).
General & administrative (G&A) expenses for the reported
quarter climbed 5.1% to $8.3 million primarily due to higher
legal costs incurred by the company.
Theravance and partner
) received a boost earlier in the month when the
Pulmonary-Allergy Drugs Advisory Committee of the US Food and
Drug Administration (FDA) voted in favor of approving their
candidate FF/VI (furoate/vilanterol, proposed brand name: Breo
The companies are looking to get the candidate approved as a
long-term, maintenance therapy of airflow obstruction and for
bringing down exacerbations in patients suffering from chronic
obstructive pulmonary disease (COPD). Nine of the thirteen panel
members voted in favor of approval of the candidate for the above
indication. Moreover, the candidate was also recommended (by a
similar majority) as a treatment for the reduction of COPD
exacerbations in patients having a history of exacerbations.
A final decision from the US regulatory body is expected by May
12, 2013. We note that Glaxo and Theravance are also
looking to get another COPD candidate approved. In Feb 2013, the
FDA accepted the regulatory application of Glaxo/Theravance's
UMEC/VI (proposed trade name: Anoro). The companies are looking
to get the candidate approved in the US as a once daily therapy
for treating patients suffering from COPD. A decision from the US
regulatory body on UMEC/VI is expected by Dec 18, 2013.
Theravance to Split into Two Companies
Apart from announcing first quarter results, Theravance announced
its decision to split into two separate publicly traded
companies. While one company will manage the late-stage partnered
respiratory candidates and associated potential royalty revenues,
the other will focus on the discovery, development and
commercialization of small-molecule therapies targeted towards
areas of high unmet medical need.
The company responsible for the development of respiratory
candidates will be named Royalty Management Company. The entity
dealing with small-molecule therapies will retain the company's
name. The news of the impending spin-off impacted Theravance's
Theravance, a biopharmaceutical company, carries a Zacks Rank #3
) appears to be more favorably placed in the biopharma space
carrying a Zacks Rank #2 (Buy).