) fourth quarter 2012 loss of 33 cents per share was narrower
than the Zacks Consensus loss estimate of 43 cents and the
year-ago loss of 45 cents. The narrower loss during the reported
quarter was primarily due to higher revenues and lower operating
expenses. Revenues also increased 8.2% from the year-ago
Full year loss of 20 cents was also narrower than the Zacks
Consensus Estimate of a loss of 29 cents per share and the
year-ago loss of $1.41 per share. Full year revenues were $135.8
million compared with $24.5 million in 2011. Theravance's full
year revenues were ahead of the Zacks Consensus Estimate of $133
Quarter in Detail
Revenues were up 8.2% year over year to $5.8 million in the
fourth quarter of 2012, slightly above the Zacks Consensus
Estimate of $5 million. Revenues benefited from the recognition
of a part of the license fees from Theravance's collaboration
Merck & Co. Inc.
) which was partially offset by decrease of royalty revenue from
sales of Vibativ.
In Oct 2012, Theravance inked a deal with Merck for the
discovery, development and commercialization of novel small
molecule therapeutics for treating hypertension and heart
In Nov 2012, Theravance announced that it received a favorable
outcome from the US Food and Drug Administration's Anti-Infective
Drugs Advisory Committee meeting on Vibativ's New Drug
Application (NDA) for the treatment of nosocomial pneumonia (NP).
Theravance is also working on the re-establishment of a
consistent supply of the product.
Research & development (R&D) expenses were down 13.4%
to $28.1 million in the fourth quarter of 2012. 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 declined 9.8% to $7.7 million.
In Sep 2012 Theravance along with its partner
) announced that the US Food and Drug Administration (FDA)
accepted the New Drug Application (NDA) for Relvar/Breo
(fluticasone furoate and vilanterol). A final decision from the
US regulatory body is expected by May 12, this year.
The companies are looking to get the candidates approved for
the treatment of patients suffering from chronic obstructive
pulmonary disease (COPD). Glaxo also submitted applications for
the approval of Relvar/Breo in the EU and Japan.
The companies are also looking for regulatory approval for
another COPD candidate Anoro (umeclidinium bromide/vilanterol).
Glaxo has already submitted regulatory applications in the US and
EU, and expects to submit the same worldwide in 2013.
Theravance expects adjusted operating expenses in the range of
$125 million to $135 million in 2013. The guidance excludes
stock-based compensation. In 2013, Theravance also has the
potential to pay up to $140 million as approval and launch
milestones to Glaxo under the terms of the long-acting beta2
agonist (LABA) agreement.
We expect investor focus to remain on the regulatory decisions
of the late stage candidates. Theravance currently carries a
Zacks Rank #4 (Sell). However, other biopharmaceutical stocks
) carry a Zacks Rank #1 (Strong Buy).
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