Theseus Pharmaceuticals Inc (THRX)

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Theravance to Split Into Two Companies, Swings to 1st-Quarter Loss

Apr 25, 2013 17:23:34 (ET)




By Nathalie Tadena

Theravance Inc. (THRX) said it plans to create two independent publicly traded companies, separating its late-stage partnered respiratory assets from its biopharmaceutical operations.

Shares of the company, which had been halted ahead of the news, jumped 8.3% to $33.50 after hours. Through the close, the stock has climbed 45% over the past three months.

Theravance said one company will focus on managing the rights to potential respiratory product royalty revenues under its collaboration with GlaxoSmithKline PLC (GSK, GSK.LN). This company is expected to retain Theravance's net operating loss carryforwards and intends to return capital to shareholders.

The other company will be a separate biopharmaceutical company focusing on the development and commercialization of small-molecule medicines. Theravance said it plans to capitalize this company with about $300 million at separation, which is expected to fund operations over the following two to three years.

Theravance's current Chief Executive Rick Winningham will initially serve as CEO of the royalty management company. Most of Theravance's current employees are expected to become employees of the biopharmaceutical operations-focused company.

The separation is expected to be completed by late 2013 or early 2014.

Theravance also reported it swung to a first-quarter loss of $37.4 million, or 39 cents a share, from a year earlier profit of $84.6 million. Revenue from collaborative arrangements declined 99% to $1.3 million, primarily due to the termination of its collaboration with Astellas Pharma for the development and commercialization of Vibativ in January 2012.

Analysts polled by Thomson Reuters had expected a per-share loss of 38 cents and revenue of $2 million.

Write to Nathalie Tadena at [e-mail]

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(END) Dow Jones Newswires

April 25, 2013 17:23 ET (21:23 GMT)