Patience Pays Off For Theravance - Stock To Watch

After a bumpy ride in the regulatory review process, Theravance Inc.'s (THRX) antibiotic Vibativ (telavancin), has finally got the green light from the FDA to treat adult patients with complicated skin and skin structure infections, or cSSSI caused by susceptible Gram-positive bacteria, including Staphylococcus aureus, both methicillin-resistant and methicillin-susceptible strains.

The company has been waiting for more than two and a half years for the FDA approval of Vibativ.

RTTNews had alerted readers to Theravance on August 13 when the stock was trading around $14.

Commenting on the FDA approval, Rick Winningham, Theravance's CEO said, "This is a significant event that marks the first approved indication for Vibativ and validates Theravance's strategies in drug discovery and development".

According to reports over 1.2 million U.S. hospital patients are infected with methicillin-resistant Staphylococcus aureus, or MRSA each year and the mortality rate from MRSA infection could be as high as 10%.

Vibativ, a once-daily infusion, is developed by Theravance in partnership with Japanese drug giant Astellas under a deal inked in 2005. The drug will be marketed and sold by Astellas and is expected to be commercially available in the U.S. during the fourth quarter of 2009. Theravance will collaborate with Astellas in marketing in the U.S. for the first three years following approval.

Through June 30, 2009, Theravance has received $170 million in upfront, milestone and other fees from Astellas and is eligible to receive up to an additional $50.0 million in remaining milestone payments related to regulatory filings and approvals of Vibativ in various regions of the world, primarily in the U.S. Theravance is also entitled to receive royalties on global sales of Vibativ by Astellas that range from the high teens to the upper twenties depending on sales volume.

Vibativ is also under regulatory review for hospital-acquired pneumonia with a decision date set for November 26.

THRX, which has traded in the range of $4.32 - $18.56, closed Friday's trade at $18.20. In after-hours trading the stock was up 4.4% at $19.

For comments and feedback contact: editorial@rttnews.com

Follow RTT