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Theravance (TBPH) Q1 Loss Widens, Revenues Miss Estimates

Zacks Equity Research

Theravance Biopharma, Inc. TBPH incurred a loss of $1.32 per share in first-quarter 2019, wider than the Zacks Consensus Estimate of a loss of $1.18 as well as the year-ago loss of $1.22.

Total revenues of $5.3 million in the quarter significantly missed the Zacks Consensus Estimate of $16.45 million. Moreover, revenues dropped 36.1% year over year due to no product sales in the quarter.

Last November, Theravance completed the sale of its only marketed drug, Vibativ, to Cumberland Pharmaceuticals. As a result, the company was not able to generate any revenues from product sales in the first quarter of 2019.

The entire revenues comprised collaboration revenues from partner Johnson & Johnson JNJ for the joint development of the company’s pan-Janus kinase inhibitor, TD-1473, to treat inflammatory intestinal diseases. Collaboration revenues were $4.6 million in the year-earlier quarter.

Shares of Theravance have lost 4.5% in the year so far versus the industry’s rally of 10.6%.

Research and development expenses were $53.8 million, up 12.8% from the year-ago quarter, primarily due to higher costs to support key programs and higher employee related expenses.

Selling, general & administrative expenses inched up 2% to $25.2 million due to increased collaboration expenses related to the launch activities of Yupelri.

Product and Pipeline Updates

Theravance has collaborated with Mylan MYL for the development and commercialization of Yupelri (revefenacin) pertaining to the maintenance treatment of adults with chronic obstructive pulmonary disease (COPD), which was approved by the FDA last November.

On first-quarter conference call, management stated that Theravance and Mylan formally launched the sales and marketing efforts of Yupelri in early 2019. These include physicians, pharmacists, respiratory therapists and other health care prescribers.

Notably, Theravance has an economic interest in royalties earned from GlaxoSmithKline GSK on Trelegy Ellipta’s global sales. Trelegy Ellipta, a triple combination therapy of inhaled corticosteroid (ICS)/LAMA/LABA (fluticasone furoate/umeclidinium/vilanterol 'FF/UMEC/VI'), was approved in September 2017 as a maintenance treatment for COPD patients, who are not adequately treated by a combination of ICS and LABA.

In the first quarter of 2019, Glaxo recorded sales of $112.7 million for Trelegy Ellipta. Theravance is eligible to receive 5.5-8.5% (tiered) of the product's worldwide net sales.

The company is currently enrolling patients in the phase II study on TD-1473 for treating Crohn's disease and in the phase IIb/III study for ulcerative colitis.

Theravance is evaluating ampreloxetine (TD-9855) in a phase III program for treating patients with symptomatic neurogenic orthostatic hypotension (nOH). The company plans to present 5-month data from the completed phase II investigation for the given patient population at a medical meeting in June 2019.

Theravance is also developing inhaled, lung-selective pan-Janus kinase (JAK) inhibitor, TD-8236, in a phase I study to assess its potential for the treatment of various serious respiratory diseases. The company plans to provide the biomarker data of TD-8236 in the third quarter of 2019 after evaluating healthy volunteers and asthma patients.

2019 Outlook

For 2019, Theravance anticipates operating loss excluding non-cash share-based compensation to be $210-$230 million, unchanged from the previously issued guidance.

Theravance Biopharma, Inc. Price, Consensus and EPS Surprise

Theravance Biopharma, Inc. Price, Consensus and EPS Surprise | Theravance Biopharma, Inc. Quote

Zacks Rank

Theravance currently carries a Zacks Rank #4 (Sell).

You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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