Theravance Biopharma Sells Remaining Trelegy Royalties to GSK for $225 Million

Theravance Biopharma has announced the sale of its remaining financial interest in the asthma and COPD inhaler Trelegy to GlaxoSmithKline (GSK) for $225 million. This transaction marks a significant milestone in the long-standing collaboration between the two companies and reflects Theravance's strategic efforts to maximize shareholder value.

Trelegy Royalty Deal: A Culmination of a Two-Decade Partnership

The deal between Theravance and GSK stems from a 2002 collaboration, where Theravance provided its long-acting beta agonist assets in exchange for royalties and milestone payments. With this latest transaction, Theravance estimates that its lifetime earnings from Trelegy will total an impressive $1.52 billion.

CEO Rick Winningham explained the rationale behind the sale, stating, "Our decision to retain future Trelegy royalties and potential milestones in the 2022 transaction reflected our confidence in the product's enduring value and commitment to maximize the value of the royalty interest for our shareholders." He added that the current agreement with GSK "further reflects this strategy."

Strategic Review and Future Focus

The royalty sale is the first outcome of Theravance's ongoing strategic review, initiated in 2024 to explore alternatives for the company. The cash infusion from GSK is intended to provide "immediate value" for shareholders, according to Winningham.

With Trelegy now off its books, Theravance is shifting its focus to two key areas:

1. Yupelri: A nebulized bronchodilator for COPD, partnered with Viatris, in which Theravance holds a 35% sales stake. In the first quarter, this stake generated $15.4 million in earnings for the company.

2. Ampreloxetine: A symptomatic neurogenic orthostatic hypotension prospect currently undergoing phase 3 clinical trials.

Financial Implications and Company Outlook

This latest deal follows a significant transaction in 2022, where Theravance sold the majority of its Trelegy royalty rights to Royalty Pharma for an upfront payment of $1.31 billion, with the potential for an additional $150 million in 2025 and 2026 based on sales performance.

The company's revenue now primarily stems from Yupelri and the remaining Trelegy payments from Royalty Pharma. This strategic shift comes in the wake of major setbacks in 2021, when a series of failed trials led to a substantial workforce reduction of 75%, or approximately 270 employees.

As Theravance Biopharma continues to rebuild and refocus its efforts, the pharmaceutical industry will be watching closely to see how the company leverages its newfound financial flexibility to drive growth and innovation in its core therapeutic areas.