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Theravance (TBPH) Q3 Loss In Line, Revenues Lag Estimates

Zacks Equity Research

Theravance Biopharma, Inc. TBPH incurred a loss of $1.05 per share in third-quarter 2019, in line with the Zacks Consensus Estimate. Meanwhile, the figure is narrower than the year-ago quarter’s loss of $1.10.

However, total revenues of $12.4 million in the quarter missed the Zacks Consensus Estimate of $13 million. Revenues also decreased 3.1% year over year, mainly due to lack of product sales following the divesture of its only marketed drug Vibativ to Cumberland Pharmaceuticals last November. Total revenues in the third quarter comprised collaboration revenues of $8.8 million and $3.6 million received from Mylan MYL.

Theravance has collaboration with Mylan for the development and commercialization of Yupelri (revefenacin), which was approved by the FDA last November. The drug is used for maintenance treatment of adults with chronic obstructive pulmonary disease (COPD).

Per the press release, Yupelri witnessed strong customer acceptance and brand performance across key market metrics in the third quarter.

Shares of Theravance have lost 33.1% in the year so far versus the industry’s growth of 4.3%.

Quarter in Detail

Research & development expenses were $52 million, down 1.3% from the year-ago quarter, primarily owing to lower employee-related expenses linked with the reduction in sales force.

Selling, general & administrative expenses escalated 16.9% to $25.6 million due to higher external expenses and higher share-based compensation.

As of Sep 30, 2019, Theravance had cash, cash equivalents, marketable securities and restricted cash of $352.9 million compared to $396.1 million as of Jun 30, 2019.

Product & Pipeline Updates

Notably, Theravance has an economic interest in royalties earned from GlaxoSmithKline GSK on triple combination COPD treatment Trelegy Ellipta’s global sales. In the third quarter, Glaxo recorded sales of $172.8 million from Trelegy Ellipta. Theravance is eligible to receive 5.5-8.5% (tiered) of the product's worldwide net sales.

The company also has a collaboration agreement with Johnson & Johnson’s JNJ subsidiary Janssen to develop its JAK inhibitor TD-1473 for the treatment of inflammatory intestinal diseases. A phase II study on TD-1473 for treating Crohn's disease and a phase IIb/III study for ulcerative colitis are ongoing. Data from the phase IIb portion of the ulcerative colitis and phase II Crohn's disease studies are expected in late 2020.

Theravance is evaluating ampreloxetine (TD-9855) in a phase III program for treating patients with symptomatic neurogenic orthostatic hypotension (nOH).

The company is developing inhaled, lung-selective pan-Janus kinase (JAK) inhibitor TD-8236 in a phase I study for the treatment of inflammatory lung diseases with minimal systemic exposure. In September 2019, Theravance announced promising outcomes from a phase I study on TD-8236, having evaluated it in single ascending doses (up to 4500 mcg) and multiple ascending doses (up to 4000 mcg).

Theravance is also developing its gut-selective irreversible JAK3 inhibitor TD-5202 in a phase I study for addressing inflammatory intestinal diseases.

2019 Outlook

For 2019, Theravance anticipates operating loss excluding non-cash share-based compensation to be in the range of $200-$210 million, narrowed from the previous guidance of $210-$230 million.

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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