) announced recently that it intends to offer $250 million
convertible subordinated notes, due in 2023. Theravance stated
further that the notes will be convertible into shares at the
option of the holders at any time on or prior to the second
business day before the date of maturity. The company also
expects to provide the underwriters with an over-allotment option
for an additional $37.5 million of notes.
The biopharmaceutical company intends to utilize the net proceeds
from the offering to make milestone payments to
) in the event of any of its pipeline candidates, being developed
in collaboration with the latter, gaining approval. Theravance
also intends to use the net proceeds to reduce its debt levels
apart from other general corporate purposes.
We are positive on Theravance's pipeline programs in
collaboration with Glaxo. Earlier in the month, the companies
announced the submission of a marketing application to the
European Medicines Agency (EMA) for their pipeline candidate
UMEC/VI (proposed trade name: Anoro). The companies are looking
to get the candidate approved in the EU as a maintenance
bronchodilator therapy (once daily) to relieve symptoms in adults
suffering from chronic obstructive pulmonary disease (COPD).
Glaxo/Theravance are also seeking US approval of the candidate
for the COPD indication. UMEC/VI is a combination of a
long-acting muscarinic antagonist/LAMA (GSK573719 or umeclidinium
bromide/UMEC) and a long-acting beta2 agonist/LABA
(vilanterol/VI). We note that Glaxo along with Theravance is also
developing other COPD candidates including Breo (proposed brand
name Relvar in the EU, formerly known as Relovair) and MABA
We currently have a Neutral recommendation on Theravance, which
carries a Zacks Rank #3 (Hold). We have a similar stance on
Large-cap pharma companies that currently look
). Both the companies carry a Zacks Rank #2 (Buy).
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