Back to top

Analyst Blog

Theravance Inc.’s (THRX - Analyst Report) fourth quarter 2012 loss of 33 cents per share was narrower than the Zacks Consensus loss estimate of 43 cents and the year-ago loss of 45 cents. The narrower loss during the reported quarter was primarily due to higher revenues and lower operating expenses. Revenues also increased 8.2% from the year-ago period.

Full year loss of 20 cents was also narrower than the Zacks Consensus Estimate of a loss of 29 cents per share and the year-ago loss of $1.41 per share. Full year revenues were $135.8 million compared with $24.5 million in 2011. Theravance’s full year revenues were ahead of the Zacks Consensus Estimate of $133 million.

Quarter in Detail

Revenues were up 8.2% year over year to $5.8 million in the fourth quarter of 2012, slightly above the Zacks Consensus Estimate of $5 million. Revenues benefited from the recognition of a part of the license fees from Theravance’s collaboration with Merck & Co. Inc. (MRK - Analyst Report) which was partially offset by decrease of royalty revenue from sales of Vibativ.

In Oct 2012, Theravance inked a deal with Merck for the discovery, development and commercialization of novel small molecule therapeutics for treating hypertension and heart failure.

In Nov 2012, Theravance announced that it received a favorable outcome from the US Food and Drug Administration’s Anti-Infective Drugs Advisory Committee meeting on Vibativ’s New Drug Application (NDA) for the treatment of nosocomial pneumonia (NP). Theravance is also working on the re-establishment of a consistent supply of the product.

Research & development (R&D) expenses were down 13.4% to $28.1 million in the fourth quarter of 2012. The decline in R&D expenses was primarily attributable to the completion of the phase IIb study on TD-1211 (for the treatment of chronic, non-cancer pain patients with opioid-induced constipation). General & administrative (G&A) expenses for the reported quarter declined 9.8% to $7.7 million.

Pipeline Update

In Sep 2012 Theravance along with its partner GlaxoSmithKline plc (GSK - Analyst Report) announced that the US Food and Drug Administration (FDA) accepted the New Drug Application (NDA) for Relvar/Breo (fluticasone furoate and vilanterol). A final decision from the US regulatory body is expected by May 12, this year.

The companies are looking to get the candidates approved for the treatment of patients suffering from chronic obstructive pulmonary disease (COPD). Glaxo also submitted applications for the approval of Relvar/Breo in the EU and Japan.

The companies are also looking for regulatory approval for another COPD candidate Anoro (umeclidinium bromide/vilanterol). Glaxo has already submitted regulatory applications in the US and EU, and expects to submit the same worldwide in 2013.

2013 Outlook

Theravance expects adjusted operating expenses in the range of $125 million to $135 million in 2013. The guidance excludes stock-based compensation. In 2013, Theravance also has the potential to pay up to $140 million as approval and launch milestones to Glaxo under the terms of the long-acting beta2 agonist (LABA) agreement.

We expect investor focus to remain on the regulatory decisions of the late stage candidates. Theravance currently carries a Zacks Rank #4 (Sell). However, other biopharmaceutical stocks such as Targacept Inc. (TRGT - Snapshot Report) carry a Zacks Rank #1 (Strong Buy).

Please login to or register to post a comment.

New to Zacks?

Start Here

Zacks Investment Research


Are you a new Zacks Member or a visitor to

Top Zacks Features

My Portfolio Tracker

Is it Time to Sell?

One of the most important steps you can take today is to set up your portfolio tracker on Once you do, you'll be notified of major events affecting your stocks and/or funds with daily email alerts.

More Zacks Resources

Zacks Rank Home - Evaluate your stocks and use the Zacks Rank to eliminate the losers and keep the winners.

Mutual Fund Rank Home - Evaluate your funds with the Mutual Fund Rank for both your personal and retirement funds.

Stock/Mutual Fund Screening - Find better stocks and mutual funds. The ones most likely to beat the market and provide a positive return.

My Portfolio - Track your Portfolio and find out where your stocks/mutual funds stack up with the Zacks Rank.

Zacks #1 Rank Top Movers for Zacks #1 Rank Top Movers

Company Symbol Price %Chg
PLANAR SYST… PLNR 4.44 +5.21%
BITAUTO HOL… BITA 81.71 +5.12%
CTPARTNERS… CTP 16.66 +4.26%
CHINA BIOLO… CBPO 47.91 +3.30%
MALLINCKROD… MNK 72.94 +2.85%