Theravance (TBPH) Q3 Loss Narrower Than Expected, Sales Miss
Theravance Biopharma, Inc. TBPH reported third-quarter 2022 net loss of 21 cents per share, narrower than the year-ago period’s loss of 76 cents. The loss was also narrower than the Zacks Consensus Estimate of 22 cents as well as our estimate of 23 cents.
Total revenues of $12.5 million missed the Zacks Consensus Estimate of $19.4 million as well as our estimate of $19.2 million. Revenues declined 5.6% year over year due to the recognition of non-cash collaboration revenues from J&J’s JNJ subsidiary, Janssen, in the third quarter of 2021.
J&J’s Janssen had a collaboration with Theravance to develop izencitinib for treating inflammatory intestinal diseases, including ulcerative colitis (UC) and Crohn’s disease (CD). However, after the failure in the UC study and Theravance’s decision to close the clinical studies on CD, Janssen terminated the contract, effective Jan 16, 2022. Presently, izencitinib is being developed by Theravance on its own.
Theravance’s shares were down 2.4% in after-hours trading on Nov 7 on the mixed results. Shares of Theravance have declined 9.1% so far this year compared with the industry’s decrease of 22.2%.
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Quarter in Detail
The top line almost fully comprised Viatris VTRS collaboration revenues worth $12.4 million in relation to Yupelri (revefenacin).
Theravance and Viatris are developing and commercializing Yupelri, a long-acting muscarinic antagonist, as a once-daily nebulized treatment of chronic obstructive pulmonary disease. Viatris and Theravance share U.S. profits and losses related to the commercialization of Yupelri. While Viatris gets 65% of the profits, Theravance earns 35%.
Research & development expenses were $9.9 million, down 77.4% from the year-ago quarter’s figure.
Selling, general & administrative expenses were down 23.6% year over year to $16.3 million.
As of Sep 30, 2022, Theravance had cash, cash equivalents and marketable securities worth $486.8 million compared with $132.9 million as of Jun 30, 2022.
2022 Guidance
Theravance reiterated its financial guidance for 2022. TBPH expects adjusted research & development expenses (excluding one-time restructuring expenses, legal expenses and share-based compensation) in the range of $45-$55 million, while adjusted selling, general and administrative expenses are projected between $35 million and $45 million.
TBPH expects to approach breakeven cash flow from operations in 2022.
Other Updates
In July 2022, Theravance sold all its equity interest in Theravance Respiratory Company (TRC) to Royalty Pharma for more than $1.5 billion in potential total value (approximately $1.1 billion in upfront cash, $250 million in potential milestones and outer year royalties). TRC represented Theravance’s 85% economic interest in the sales-based royalty rights on the global net sales of GSK’s GSK once-daily single inhaler triple therapy for COPD and asthma, Trelegy Ellipta.
Per the deal, Royalty Pharma will financially support Theravance in clinically developing the latter’s pipeline candidate, ampreloxetine, for treating symptomatic neurogenic orthostatic hypotension (nOH), in exchange for certain royalty rights.
In April, Theravance failed to achieve statistical significance in its primary endpoint in the phase III study evaluating ampreloxetine in nOH. However, a sub-group analysis based on disease type showed that the drug achieved a 72% reduction in the odds of treatment failure compared to a placebo in patients with multiple system atrophy (MSA), a rare disease. Based on this data, TBPH decided to explore ampreloxetine potential in MSA indication. Theravance plans to start a new phase III clinical study in MSA patients with symptomatic nOH (CYPRESS) in the first quarter of 2023. Theravance expects the $25 million investment from Royalty Pharma to fund the majority of the phase III study costs.
The deal with Royalty Pharma gave Theravance the funds it needed to initiate a $250 million capital return program, which included purchasing GSK’s entire equity stake in Theravance Biopharma, consisting of approximately 9.6 million shares at $9.75 per share. On Sep 28, Theravance launched a Dutch auction tender offer for up to $95 million of the Theravance Biopharma ordinary shares to purchase the GSK shares. This is an open offer expected to expire on Nov 17.
Zacks Rank & Key Pick
Theravance Biopharma currently carries a Zacks Rank #3 (Hold).You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Theravance Biopharma, Inc. Price, Consensus and EPS Surprise
Theravance Biopharma, Inc. price-consensus-eps-surprise-chart | Theravance Biopharma, Inc. Quote
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