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GlaxoSmithKline Boosts Stake In Theravance To 27%

GlaxoSmithKline Boosts Stake In Theravance To 27%
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4/2/2012 10:33 AM ET

Biopharmaceutical company Theravance, Inc. (THRX: Quote) Monday said its drug development partner GlaxoSmithKline Plc (GSK: Quote, GSK.L) has increased its stake in Theravance to 26.8 percent by investing about $212.89 million. The move is said to be on the potential success of asthma drug Relovair, which is believed to be the successor of Seretide/Advair that logged sales of roughly $8.1 billion in 2011.

Relovair is developed by Theravance and GlaxoSmithKline and is a trademark of the GlaxoSmithKline group of companies. Relovair is believed to fill in the position of Advair, which expired its US patent in 2010 and expires in Europe next year. Both are used in the treatment of asthma and chronic obstructive pulmonary disease or COPD, one of the most common lung diseases, and that makes it hard for the patients to breath.

A marketing application of Relovair for the indication of asthma is expected to be submitted in the E.U. in mid-2012.

GlaxoSmithKline has agreed to acquire 10 million of its shares at a price of $21.2887 per share. Following the acquisition, British drug giant GSK will own around 25.81 million shares of Theravance common stock, which will increase GSK's ownership from about 18.3 percent of Theravance capital.

The price per share was based upon a 7.5 percent premium to the volume-weighted average price per share of Theravance stock over the five-day period ended March 30, which was $19.8034.

Theravance said the deal will be completed shortly after its Annual Meeting scheduled for May 15, subject to certain closing conditions, including approval of its stockholders.

GSK expects to continue to account for its total stake in Theravance as an investment held at fair value, due to the existing governance agreement which places limitations on GSK's voting rights.

Theravance is focused on the development of small molecule medicines across therapeutic areas like respiratory disease, bacterial infections and central nervous system /pain.

It was in November 2002 that Theravance entered into a long-acting beta2 agonist (LABA) collaboration with GSK to develop and commercialize a once-daily LABA product candidate either as a single agent or in a combination medicine for the treatment of asthma and/or chronic obstructive pulmonary disease. The LABA programme is in Phase III development in COPD.

Theravance shares are currently trading at $22.22, up $2.72 or 13.93 percent, on a volume of 231 thousand shares on the Nasdaq.

GlaxoSmithKline shares trade at $ 45.48, up 1.27 percent on the NYSE.

GSK.L is currently trading at 1,412.5 pence, up 16 pence or 1.15 percent, on a volume of 3.75 million shares on the LSE.

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by RTT Staff Writer

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