Theravance Biopharma, Inc.

What they do

Theravance Biopharma is a biopharmaceutical company focused on the development and commercialization of medicines, primarily the FDA-approved YUPELRI (revefenacin) inhalation solution for the maintenance treatment of COPD. The company co-promotes YUPELRI in the US with Viatris under a profit and loss sharing arrangement (65% Viatris, 35% Theravance). Previously, it held a royalty interest in TRELEGY global net sales, which it sold to GSK in June 2025. The company is winding down R&D and significantly reducing G&A as part of a restructuring.

Revenue drivers

• YUPELRI (revefenacin) collaboration revenue — Revenue from the US commercialization of YUPELRI, co-promoted with Viatris under a 65/35 profit and loss sharing arrangement. Total YUPELRI net sales were $266.6 million in 2025, up 12% year-over-year. Q2 2026 collaboration revenue was $20.7 million, up 11% year-over-year.
• TRELEGY royalties and milestones (sold/retained) — Sold remaining royalty interest in TRELEGY global net sales to GSK in June 2025 for $225.0 million, retaining rights to up to $150.0 million in potential milestone payments from Royalty Pharma Investments. Received a $50.0 million milestone in February 2026 tied to 2025 global net sales of $3.91 billion.

Recent performance

Total revenue for Q2 2026 was $20.7 million, entirely Viatris collaboration revenue, up 11% year-over-year. Quarterly US YUPELRI net sales (recognized by Viatris) were $70.7 million, up 7% year-over-year, with customer demand growing 10%. Operating expenses (excluding restructuring and transaction costs) decreased 35% year-over-year in Q2 2026. The company had cash of $388 million and no debt at quarter-end. Annual net income swung to $105.9 million in 2025 from a $56.4 million loss in 2024.

Strategy

Management is focused on maximizing shareholder value through accelerating the strategic review, including a possible sale of the company, and executing a pending acquisition by Zymeworks for $17.00 per share plus a CVR. The company is implementing an organizational restructuring to wind down R&D and significantly reduce G&A, aiming to cut operating expenses by approximately 60% relative to 2025 levels. It continues to focus on YUPELRI commercial growth with partner Viatris. The wind-down of the failed ampreloxetine program is underway, with continued targeted regulatory and scientific activities to potentially capture value.

Risks

• YUPELRI commercial dependence — Revenue relies heavily on continued acceptance and market share of YUPELRI among physicians, patients, and payors; any decline would materially hurt financial results.
• Strategic review may not yield a transaction — The strategic review process, including the pending Zymeworks merger, may not close or may result in no deal, which could adversely affect the business and shareholder value.
• Ampreloxetine failure — The Phase 3 CYPRESS study did not meet its primary endpoint, leading to a wind-down of the program, and the CVR from the Zymeworks deal depends on uncertain future monetization of the asset.
• Partner dependence — Commercialization of YUPELRI depends on Viatris fulfilling its obligations; a termination or failure by Viatris could jeopardize product revenues.

Outlook

Management expects the Zymeworks acquisition to close in the second half of 2026, subject to shareholder approval and customary conditions. The restructuring is expected to reduce operating expenses by approximately 60% relative to 2025, with full run-rate savings of ~$70 million materializing in 2H 2026. The company expects ~$60-70 million of annualized cash flow (excluding restructuring and transaction costs) beginning in 2H 2026. Management has high confidence in achieving the $100.0 million milestone payment from Royalty Pharma for 2026 TRELEGY global net sales.