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Theravance (TBPH) Posts Narrower-than-Expected Q3 Loss

TBPH INFI MYL

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Theravance Biopharma, Inc. (TBPH - Free Report) reported third-quarter 2016 loss of 73 cents per share, much narrower than both the Zacks Consensus Estimate of a loss of 95 cents and the year-ago loss of $1.40.

Total revenue in the quarter surged 78.3% year over year to $19.1 million on the back of higher collaboration revenues and beat the Zacks Consensus Estimate of $16.4 million.

Quarterly Details

Theravance’s sole marketed product, Vibativ, generated U.S. revenues of $3.9 million in the third quarter of 2016, up 68.7% from the year-ago period. However, the figure tanked 27.2% sequentially due to seasonality and trends in surgical admissions.

Revenues from collaborations soared approximately 81% to $15.2 million. This was due to the recognition of upfront payment of $15 million from Takeda Pharmaceutical Company Limited under a commercialization agreement for TD-8954.

Research and development expenses were $32 million, up 5.2% from the year-ago period mainly due costs associated with the advancement of the company’s priority programs.

Selling, general & administrative expenses, on the other hand, declined 11.2% to $20.3 million mainly due to lower costs associated with share-based compensation expense and timing of other expenses.

2016 Outlook

Theravance expects operating loss (excluding share-based compensation) of approximately $140 million in 2016.

Pipeline Update

Theravance has made significant progress with its pipeline. In Oct 2016, Theravance and Mylan N.V. (MYL - Free Report) announced positive top-line data from two replicate three-month phase III studies evaluating revefenacin (TD-4208) for the treatment of chronic obstructive pulmonary disease (COPD).

Data showed that the studies met primary efficacy endpoints, demonstrating statistically significant and clinically meaningful improvements over placebo in trough lung function after 12 weeks of dosing for both the 88 mcg once-daily and 175 mcg once-daily of revefenacin. Both the doses of the candidate were found to be generally well-tolerated in the studies.

In addition to the two efficacy studies, the phase III program includes an ongoing 12-month, open-label, active comparator safety study, which is expected to be complete in 2017. Positive data from the safety study would allow Theravance to file a new drug application for revefenacin in the U.S. by the end of 2017.

We note that Theravance has partnered with Mylan for the development and commercialization of nebulized revefenacin products for the treatment of COPD and other respiratory diseases.

Theravance is working on expanding Vibativ’s label. The company is evaluating Vibativ in a phase III study for the treatment of primary bacteremia with the study expected to be complete in 2018. Moreover, the TOUR registry program is on track and is generating useful data across a range of difficult-to-treat infections.

With a number of updates expected on the pipeline front over the upcoming quarters, we expect investor focus to remain on pipeline updates by the company.

THERAVANCE BIO Price, Consensus and EPS Surprise

 

Zacks Rank & a Stock to Consider

Theravance is a Zacks Rank #3 (Hold) stock. A better-ranked stock in the health care sector is Infinity Pharmaceuticals, Inc. (INFI - Free Report) , sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Infinity’s loss estimates narrowed from $3.84 to $3.79 for 2016 over the last 60 days. The company has posted a positive surprise in all of the four trailing quarters with an average beat of 67.62%.

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