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Theravance (TBPH) Q4 Loss Narrows, Revenues Beat Estimates

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Theravance Biopharma, Inc. TBPH incurred a loss of 92 cents per share in fourth-quarter 2018, narrower than the Zacks Consensus Estimate of a loss of $1.12 and the year-ago loss of $1.64.

Total revenues in the quarter under review skyrocketed 248.5% year over year to $15.7 million, mainly on the back of an upfront payment received from Johnson & Johnson JNJ in relation to a joint development agreement for Theravance’s pan-Janus kinase inhibitor, TD-1473. Moreover, the top line surpassed the Zacks Consensus Estimate of $12.3 million.

Quarter in Detail

In November 2018, Theravance completed the sale of its only marketed drug, Vibativ to Cumberland Pharmaceuticals. As a result, the company was not able to generate a full quarter of product sales for the drug.

Vibativ is a once-daily dual-mechanism antibiotic, approved in the United States, Europe and certain other countries for specifically difficult-to-treat infections. The drug generated U.S. revenues of $2.4 million in the fourth quarter, down 41.5% from the year-ago period's figure.

Revenues from collaborations, primarily related to the collaboration with J&J for TD-1473, were $10 million compared with $0.39 million in the year-earlier quarter. Profit sharing revenues related to Yupelri was $3.3 million in the quarter.

Theravance is collaborating with Mylan MYL for the development and commercialization of Yupelri (revefenacin) for the maintenance treatment of adults with chronic obstructive pulmonary disease (COPD), which was approved by the FDA last November. Formal launch activities of Yupelri are currently underway.

Research and development expenses were $52.3 million, up 2.3% from the year-ago quarter, primarily due to higher costs to support key programs.

Selling, general & administrative expenses decreased 13.5% to $25.5 million, due to lower expenses regarding share-based compensation.

Pipeline and Other Updates

Theravance has a promising pipeline. The company inked a collaboration agreement with Johnson & Johnson’s subsidiary, Janssen for developing its JAK inhibitors, TD-1473 and TD-0714, for the treatment of inflammatory intestinal diseases.

In November 2018, Theravance dosed the first patient in a phase II study on its gut-selective pan-JAK inhibitor, TD-1473 for the treatment of patients with Crohn's disease. The candidate is also being evaluated in phase Ib study for the treatment of ulcerative colitis.

Also, in November 2018, Theravance dosed the first patient in a phase I study on its novel, inhaled, lung-selective pan-Janus kinase (JAK) inhibitor, TD-8236. The candidate is currently being developed to evaluate its potential for the treatment of various serious respiratory diseases. The company plans to provide biomarker data of TD-8236 in healthy volunteers and asthma patients by mid-2019.

Last month, Theravance dosed the first patient in a phase III study on ampreloxetine (TD-9855) for treating patients with symptomatic neurogenic orthostatic hypotension (nOH).

Notably, Theravance has an economic interest in royalties paid by Glaxo 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.

Glaxo plans to complete the phase III CAPTAIN study on Trelegy Ellipta for treating asthma patients in the first half of 2019. If data from the study is found to be positive, Glaxo will submit a supplemental new drug application (sNDA) in the second half of this year for Trelegy Ellipta to treat asthma.

In the fourth quarter of 2018, Glaxo recorded sales of $100 million for Trelegy Ellipta. Theravance is eligible to receive 5.5-8.5% (tiered) of the product's worldwide net sales.

2019 Outlook

For 2019, Theravance anticipates operating loss, excluding non-cash share-based compensation, to be $210-$230 million.

Zacks Rank

Theravance currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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