- Theravance Biopharma, Inc. TBPH has agreed to sell all of its units in Theravance Respiratory Company, LLC, representing 85% economic interest in the sales-based royalty rights on worldwide net sales of GSK plc’s GSK TRELEGY ELLIPTA to Royalty Pharma RPRX for over $1.5 billion.
- The transaction is intended to provide near-, mid-and long-term value to Theravance with an upfront cash payment of ~$1.1 billion, up to $250 million in additional milestone payments, and outer year royalties to the Company providing an opportunity to receive an estimated NPV of ~$200 million.
- In 2021, Trelegy generated sales of $1.68 billion, an increase of 57% at constant exchange rates versus the prior year.
- Royalty Pharma is also acquiring 15% Innoviva INVA equity interests in Theravance Respiratory Company, LLC, for ~$282 million and a potential $50 million contingent sales-based milestone payment.
- Royalty Pharma will invest up to $40 million to advance the development of ampreloxetine in Multiple System Atrophy (MSA) in exchange for unsecured low single-digit royalties.
- Royalty Pharma expects to fund this transaction with existing cash on the balance sheet and to maintain the significant financial capacity to deploy capital in additional value-creating opportunities.
- Royalty Pharma held cash and cash equivalents of $1.79 billion as of March 31, 2022.
- Price Action: TBPH shares are trading higher by 28.16% at $11.06, INVA +10.67% at $15.45, and GSK higher by 0.20% at $41 during the post-market session on Wednesday.
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