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Theravance (TBPH) Drops on Q3 Earnings Miss, Revenues In Line

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Shares of Theravance Biopharma, Inc. (TBPH - Free Report) were down 13.8% on Friday after the company announced weaker-than-expected earnings results for the third quarter of 2020 on Nov 5.

In fact, the stock has plunged 35.2% so far this year compared with the industry’s decrease of 4.9%.


Theravance incurred a loss of $1.16 per share in the reported quarter, wider than the Zacks Consensus Estimate of a loss of 98 cents and the year-ago loss of $1.05 as well.

Although total revenues of $18.3 million in the quarter were almost in line with the Zacks Consensus Estimate, the same increased 47.6% year over year, mainly on higher revenues from the collaboration agreement with Mylan .

The top line comprised collaboration revenues worth $7.3 million from Janssen, a wholly owned subsidiary of Johnson & Johnson (JNJ - Free Report) , and $11 million from the collaboration agreement with Mylan in relation to Yupelri (revefenacin).

Notably, Theravance has a collaboration deal with Mylan for the development and commercialization of Yupelri approved by the FDA in November 2018. The drug is indicated for the maintenance treatment of adults with chronic obstructive pulmonary disease (COPD).

Yupelri achieved 93% share of the nebulized LAMA market and a 17.4% share of the long-acting nebulized market as of July 2020. Per the company, despite the COVID-19 pandemic woes, which dwindled overall market demand, Yupelri expanded its market share and witnessed a strong customer acceptance and brand performance across the key market metrics.

Quarter in Detail

Research & development expenses were $67.4 million, up 29.6% from the year-ago quarter, primarily due to higher external cost pertaining to pipeline development.

Selling, general & administrative expenses rose 7.4% to $27.5 million due to employee-related expenses resulting from higher compensation-related cost.

As of Sep 30, 2020, Theravance had cash, cash equivalents and marketable securities worth $358.3 million compared with $438.3 million as of Jun 30, 2020.

Updates on Pipeline

Theravance holds an economic interest in royalties earned from GlaxoSmithKline (GSK - Free Report) on the triple combination COPD treatment Trelegy Ellipta’s global sales. In the third quarter, Glaxo recorded sales worth $251.9 million from Trelegy Ellipta. Theravance is eligible to receive 5.5-8.5% tiered royalties on the product's worldwide net sales.

Meanwhile, in September 2020, the FDA approved Trelegy Ellipta as a maintenance treatment of asthma. With the nod for the asthma indication, Trelegy became the first single inhaler triple therapy approved for the maintenance treatment of both asthma and COPD. This should boost the product’s sales and bring in higher royalties for Theravance in the future quarters.

Theravance is evaluating TD-0903, its lung-selective, nebulized Janus kinase inhibitor (JAKi), for the potential treatment of hospitalized patients with acute lung injury (ALI) caused by COVID-19. The candidate is currently in phase II development stage after phase I results showed a favorable safety and tolerability profile across the range of doses (from 1 to 10 mg).

The phase II parallel-group study is investigating the safety and efficacy of a single dose of TD-0903 and data from the same is expected in the second quarter of 2021.

The company has a collaboration pact with Janssen to develop its JAK inhibitor TD-1473 for the treatment of inflammatory intestinal diseases. A phase II DIONE study on TD-1473 for treating Crohn's disease and a phase IIb/III RHEA study for ulcerative colitis are underway. Data from the phase IIb portion of the ulcerative colitis and phase II Crohn's disease studies is expected in the third quarter of 2021.

Theravance is also developing TD-5202 (gut-selective irreversible JAK3 inhibitor) in a phase I study for addressing inflammatory intestinal diseases. Also, the company is evaluating ampreloxetine (TD-9855) under various phase III programs for treating patients with symptomatic neurogenic orthostatic hypotension (nOH). Top-line results from the same are expected in the third quarter of 2021.

2020 Outlook

The company anticipates operating loss (excluding non-cash share-based compensation) in the range of $225-$235 million, higher than the earlier projection of $205-$225 million. This downside too can induce a depreciation in the stock value following the earnings announcement along with the company’s issuance of guidance.

Theravance Biopharma, Inc. Price, Consensus and EPS Surprise

Theravance Biopharma, Inc. Price, Consensus and EPS Surprise


Theravance Biopharma, Inc. price-consensus-eps-surprise-chart
| Theravance Biopharma, Inc. Quote

Zacks Rank

Theravance currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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