- Over $1.5 Billion in Potential
Total Value, Including Approximately $1.1
Billion in Upfront Cash, up to $250
Million in Sales-Based Milestone Payments and an Estimated
NPV Approximately $200 Million of
Rights to TRELEGY ELLIPTA Outer Year Royalties1
- Royalty Pharma to Invest up to $40 Million to Advance Development of
Ampreloxetine in Multiple System Atrophy (MSA) in Exchange for
Unsecured Low Single-Digit Royalties
- Theravance Biopharma to Hold a Conference Call Today at
5 pm ET / 2 pm
PT / 10 pm IST
DUBLIN, July 13, 2022 /PRNewswire/ -- Theravance
Biopharma, Inc. ("Theravance Biopharma" or the "Company") (NASDAQ:
TBPH) today announced it has entered into a definitive agreement to
sell all of its units in Theravance Respiratory Company, LLC
representing its 85% economic interest in the sales-based royalty
rights on worldwide net sales of GSK's TRELEGY ELLIPTA ("TRELEGY")
to Royalty Pharma (NASDAQ: RPRX) for over $1.5 billion in potential total value (the
"TRELEGY Royalty Transaction"). The transaction is intended to
provide near-, mid- and long-term value to the Company with an
upfront cash payment of approximately $1.1
billion, up to $250 million in
additional milestone payments contingent on the achievement of
certain TRELEGY net sales thresholds between 2023 and 2026 and
outer year royalties to the Company providing an opportunity to
receive an estimated NPV of approximately $200 million.1
Immediately after announcing the TRELEGY Royalty Transaction,
Theravance Biopharma intends to initiate a multi-step process to
eliminate its outstanding debt and return capital to shareholders.
This process is expected to include:
- First, repayment of the Company's non-recourse TRELEGY notes
for approximately $420 million
contemporaneously with the closing of the TRELEGY Royalty
Transaction;
- Second, initiation of a tender offer to retire the
approximately $230 million in
principal amount of the Company's 2023 Convertible Senior Notes, at
par, shortly after and contingent upon the closing of the TRELEGY
Royalty Transaction; and
- Third, implementation of a plan to return capital to
shareholders, to be finalized following the debt paydown.
After paying down the debt, estimated taxes and transaction
expenses, the Company estimates having approximately $430 million of cash on its balance sheet.
At the completion of this process, Theravance Biopharma expects
to be well-capitalized with a streamlined and debt-free balance
sheet. The Company now anticipates it will approach breakeven cash
flow in the second half of 2022 without the cash flows from its
interest in TRELEGY royalties, driven by disciplined spending
within R&D and the growth of YUPELRI®.
In addition, Royalty Pharma's investment in ampreloxetine
validates its potential as a therapy to manage symptomatic
neurogenic orthostatic hypotension (nOH) in MSA patients. Royalty
Pharma's $40 million investment in
ampreloxetine includes a $25 million
upfront payment and an additional $15
million payment upon the first regulatory approval of
ampreloxetine2. In exchange, Royalty Pharma will
receive future unsecured royalties of 2.5% on annual global net
sales up to $500 million and 4.5% on
annual global net sales over $500
million.
"Royalty Pharma is an industry leader in identifying world class
therapeutics and structuring creative financing transactions that
support innovative biopharma companies holding royalty
interests. We believe this transaction for TRELEGY royalties
delivers on the strategic value of our economic interest in this
important therapy for COPD and asthma patients," said Rick E
Winningham, Theravance Biopharma's Chairman and Chief Executive
Officer. "This transaction underscores our commitment to maximize
shareholder value by eliminating debt, accelerating the return of
capital to shareholders and strengthening our position as a
biopharmaceutical leader. Moreover, Royalty Pharma's additional
investment in ampreloxetine supports the value-creating potential
of this promising therapy for MSA patients. It's our firm
belief that, upon closing this transaction, Theravance Biopharma
will operate from a position of financial strength and will
maintain its focus on YUPELRI's continued U.S. commercial
performance."
"This transaction reflects our confidence in the significant
value that TRELEGY delivers as a triple-combination therapy for
COPD and asthma patients, and GSK's continued global commercial
excellence," said Pablo Legorreta, founder and Chief Executive
Officer of Royalty Pharma. "This transaction highlights our ability
to provide capital at scale and structure creative funding
solutions, allowing Theravance to pursue important strategic
initiatives, including the advancement of their
internally-discovered, late-stage therapeutic ampreloxetine."
Theravance Biopharma will continue to pursue its overarching
purpose and goals as a biopharmaceutical company focused on
delivering Medicines that Make a Difference® building on
its co-commercial efforts of YUPELRI®, a measured
investment in the Company's respiratory portfolio and a focused
effort to bring ampreloxetine to the MSA community. The Company
expects to initiate the Phase 3 clinical trial with ampreloxetine
in early 2023 and to share additional details regarding the
clinical study later this year. With recent guidance from the U.S.
Food and Drug Administration (FDA) in a Type C meeting on key study
design elements and alignment on a path to a New Drug Application
(NDA) filing, Theravance Biopharma will conduct one new study in
patients with MSA and expects the $25
million investment to fund the majority of the Phase 3
costs.
The transaction with Royalty Pharma is subject to certain
limited closing conditions and is expected to close up to ten
business days after the date of this press release, concurrently
with the repayment of the non-recourse TRELEGY notes referenced
above.
Advisors
Evercore and MTS Partners acted as financial advisors and
Skadden, Arps, Slate, Meagher & Flom LLP acted as legal advisor
to Theravance Biopharma. Goodwin
Procter acted as legal advisor to Royalty Pharma.
Conference Call and Live Webcast Today at 5:00 pm ET
Theravance Biopharma will hold a conference call and live
webcast accompanied by slides today at 5:00
pm ET / 2:00 pm PT /
10:00 pm IST. To participate in the
live call by telephone, please dial (800) 225-9448 from the U.S.,
or (203) 518-9708 for international callers, using the confirmation
code TBPH0713. Those interested in listening to the conference call
live via the internet may do so by visiting Theravance Biopharma's
website at www.theravance.com, under the Investors section,
Presentations and Events.
A replay of the conference call will be available on Theravance
Biopharma's website for 30 days through August 12, 2022. An audio replay will also be
available through 11:59 pm ET on
July 20, 2022, by dialing (800)
839-2485 from the U.S., or (402) 220-7222 for international
callers.
About Theravance Biopharma
Theravance Biopharma, Inc.'s overarching purpose and goal as a
biopharmaceutical company is focused on delivering Medicines
that Make a Difference® in people's lives. In
pursuit of its purpose, Theravance Biopharma leverages decades of
expertise, which has led to the development of FDA-approved
YUPELRI® (revefenacin) inhalation solution
indicated for the maintenance treatment of patients with chronic
obstructive pulmonary disease (COPD). Its pipeline of internally
discovered programs is targeted to address significant unmet
patient needs.
For more information, please visit www.theravance.com.
THERAVANCE BIOPHARMA®, THERAVANCE®, and
the Cross/Star logo are registered trademarks of
the Theravance Biopharma group of companies (in
the U.S. and certain other countries).
YUPELRI® is a registered trademark of Mylan
Specialty L.P., a Viatris Company. Trademarks, trade names or
service marks of other companies appearing on this press release
are the property of their respective owners.
TRELEGY and ELLIPTA are trademarks of the GSK group of
companies.
Forward-Looking Statements
This press release contains and the conference call will contain
certain "forward-looking" statements as that term is defined in the
Private Securities Litigation Reform Act of 1995 regarding, among
other things, statements relating to goals, plans, objectives,
expectations and future events. Theravance Biopharma intends such
forward-looking statements to be covered by the safe harbor
provisions for forward-looking statements contained in Section 21E
of the Securities Exchange Act of 1934, as amended, and the Private
Securities Litigation Reform Act of 1995. Examples of such
statements include statements relating to: the expected closing of
the transaction and the timing thereof, the Company's goals,
designs, strategies, plans and objectives, the impact of the
Company's restructuring plan, ability to provide value to
shareholders, the timing of clinical studies, the potential that
the Company's research programs will progress product candidates
into the clinic, the Company's expectations regarding its
allocation of resources, potential regulatory actions, product
sales or profit share revenue and the Company's expectations for
its future financial performance and expectations as to future cash
flows. These statements are based on the current estimates and
assumptions of the management of Theravance Biopharma as of the
date of this press release and the conference call and are subject
to risks, uncertainties, changes in circumstances, assumptions and
other factors that may cause the actual results of Theravance
Biopharma to be materially different from those reflected in the
forward-looking statements. Important factors that could cause
actual results to differ materially from those indicated by such
forward-looking statements include, among others, risks related to:
whether the milestone thresholds can be achieved, delays or
difficulties in commencing, enrolling or completing clinical
studies, the potential that results from clinical or non-clinical
studies indicate the Company's product candidates are unsafe,
ineffective or not differentiated, risks of decisions from
regulatory authorities that are unfavorable to the Company,
dependence on third parties to conduct clinical studies, delays or
failure to achieve and maintain regulatory approvals for product
candidates, risks of collaborating with or relying on third parties
to discover, develop, manufacture and commercialize products, and
risks associated with establishing and maintaining sales, marketing
and distribution capabilities with appropriate technical expertise
and supporting infrastructure, ability to retain key personnel, the
impact of the Company's restructuring actions on its employees,
partners and others. In addition, while we expect the effects of
COVID-19 to continue to adversely impact our business operations
and financial results, the extent of the impact on our ability to
generate revenue from YUPELRI® (revefenacin), and the
value of and market for our ordinary shares, will depend on future
developments that are highly uncertain and cannot be predicted with
confidence at this time. Other risks affecting Theravance Biopharma
are in the Company's, Form 10-Q filed with the SEC on May 6, 2022, and other periodic reports filed
with the SEC. In addition to the risks described above and in
Theravance Biopharma's filings with the SEC, other unknown or
unpredictable factors also could affect Theravance Biopharma's
results. No forward-looking statements can be guaranteed, and
actual results may differ materially from such statements. Given
these uncertainties, you should not place undue reliance on these
forward-looking statements. Theravance Biopharma assumes no
obligation to update its forward-looking statements on account of
new information, future events or otherwise, except as required by
law.
Additional Information and Where to Find It
The tender offer for the 3.25% Convertible Senior Notes Due 2023
(the "Notes") of the Company referenced in this document has not
yet commenced. This document is for informational purposes only, is
not a recommendation and is neither an offer to purchase nor a
solicitation of an offer to sell the Notes or any other securities.
At the time the tender offer is commenced, the Company will file
with the SEC a Tender Offer Statement on Schedule TO. The
solicitation and the offer to purchase the Notes will only be made
pursuant to the offer to purchase and related documents filed with
such Schedule TO. COMPANY NOTEHOLDERS ARE URGED TO READ THE TENDER
OFFER STATEMENT (INCLUDING AN OFFER TO PURCHASE AND CERTAIN OTHER
TENDER OFFER DOCUMENTS), AS IT MAY BE AMENDED FROM TIME TO TIME,
WHEN SUCH DOCUMENTS BECOME AVAILABLE, BECAUSE THEY WILL CONTAIN
IMPORTANT INFORMATION THAT SHOULD BE READ CAREFULLY BEFORE ANY
DECISION IS MADE WITH RESPECT TO THE TENDER OFFER. Company
noteholders and other investors can obtain the Tender Offer
Statement and other filed documents for free at the SEC's website
at www.sec.gov. Copies of the documents filed with the SEC by the
Company will be available free of charge on the Company's website,
investor.theravance.com, under "SEC Filings" or by contacting the
Company's investor relations department at (650) 808-4045. In
addition, Company noteholders may obtain free copies of the tender
offer materials by contacting the information agent for the tender
offer that will be named in the Tender Offer Statement.
1 85% of TRELEGY royalties return to Theravance
Biopharma beginning July 1, 2029 for sales ex-U.S., and January
1, 2031 for sales within the U.S. Net present value ("NPV") of
royalties based on GSK Bloomberg Consensus for TRELEGY through 2032
for U.S. sales and through 2034 for ex-U.S. sales, discounted at
7%. Ex-U.S. sales for 2033-2034 extrapolated by Management due to
limitation of consensus beyond 2032.
2 Such approval to be from either the U.S. Food and
Drug Administration or the first of the European Medicines Agency
or all four of Germany,
France, Italy and Spain.
Contact:
Gail Cohen
Corporate Communications / 917 214 6603
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