Motley Fool Just Out " Glaxo & THRX Hookup Is a No Brainer" LINK
Why Theravance Shares Soared
By Sean Williams | More Articles | Save For Later
March 4, 2013 | Comments (0)
Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.
What: Shares of biotechnology company Theravance (NASDAQ: THRX ) shot up as much as 18% after brokerage firm Piper Jaffray insinuated that a positive outcome from the FDA regarding Breo Ellipta, which has a PDUFA date of March 7, could create a takeover opportunity.
So what: Breo Ellipta -- which combines a long-acting beta agonist with an inhaled corticosteroid for 24-hour, long-term COPD relief -- uses components from both Theravance and GlaxoSmithKline (NYSE: GSK ) . Glaxo actually owns a 25% stake in Theravance to begin with, and they currently have multiple COPD treatments in clinical trials and/or working their way through the FDA review process, so a buyout, assuming approval, could make logistical sense.
Now what: Don't say I haven't already climbed this tree -- because I have. My exact words on Jan. 25 with regard to which biotech was the next buyout candidate were, "Personally, I'd call a hookup between Theravance and GlaxoSmithKline a no-brainer. Theravance and Glaxo have been like peanut butter and jelly when it comes to developing revolutionary new COPD treatments." I really don't see anything on the safety side of things that would preclude Breo Ellipta from an approval later this week, so I'd agree that Piper Jaffray is pro