Tags: Theravance | Shares | Bid | Glaxo

Theravance Shares Surge on Talk of Bid from Glaxo

Monday, 04 Mar 2013 03:30 PM

GlaxoSmithKline Plc, the U.K.’s largest drugmaker, may consider acquiring Theravance Inc. to fully control respiratory drugs the companies developed together, analysts said.

The Food and Drug Administration’s Pulmonary-Allergy Drugs Advisory Committee will review the two companies’ Breo drug on March 7. Glaxo currently owns 27 percent of Theravance and may pay $51 a share for the remainder, Piper Jaffray analysts said in a note to investors. That’s more than double the closing price on March 1 and would value the remaining stake at about $3.6 billion.

In the last half-hour of New York trading Monday, Theravance shares were up 15 percent at $24 each.

Glaxo and Theravance formed an alliance a decade ago to develop respiratory drugs including Breo and Anoro to help succeed Advair, Glaxo’s aging best-seller. The U.K. company raised its stake in Theravance to 27 percent from 18 percent in April 2012. A regulatory decision on Breo is scheduled for May 12 and on Anoro on Dec. 18. Sarah Spencer, a spokeswoman for Glaxo, declined to comment on the report.

“We believe approval for Anoro by year end could lead to an eventual takeout,” Piper Jaffray analysts M. Ian Somaiya, Do Kim and Matthew Luchini said.

Breo is a once-daily treatment for chronic obstructive pulmonary disease, an umbrella term for emphysema and chronic bronchitis often caused by cigarette smoking. The medicine would compete with Novartis AG’s Arcapta Neohaler approved in July and similar twice-daily products made by Glaxo and London-based AstraZeneca Plc.

Glaxo has said a once-daily formulation has better patient compliance than drugs that must be used more often.

While pneumonia-related deaths observed in clinical trials is cause for uncertainty, only one death occurred at the lower dose that Glaxo is seeking approval for, Piper Jaffray said.

The drug may generate $738 million in sales for Glaxo in 2016, according to the average of seven analysts’ estimates compiled by Bloomberg.

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GlaxoSmithKline Plc, the U.K.'s largest drugmaker, may consider acquiring Theravance Inc. to fully control respiratory drugs the companies developed together, analysts said.
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2013-30-04
Monday, 04 Mar 2013 03:30 PM
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