Theravance to sell remaining royalty interest in Trelegy to GSK for $225M

Theravance Biopharma (TBPH) announced that it has entered into a definitive agreement to sell its remaining royalty interest in net sales of Trelegy Ellipta to GSK (GSK) for $225M in cash. Theravance Biopharma’s economic interest in Trelegy originates from a 2002 collaboration agreement with GSK, in which Theravance Biopharma’s predecessor pooled with GSK its long-acting beta agonist assets in exchange for milestones and royalties on LABA-containing combination products subsequently developed and commercialized by GSK, including Trelegy. In 2022, Theravance Biopharma sold its economic interest in the Trelegy royalties to Royalty Pharma in exchange for $1.1B upfront and potential sales related milestone payments of up to $250M in the aggregate, while retaining the right to receive 85% of Trelegy royalties for sales of Trelegy from and after 2029 and 2031. Under the terms of the agreement, Theravance Biopharma will receive $225M in cash for the sale of the Outer Year Royalties. The Company retains its right to receive up to $150 million in remaining Trelegy sales related milestones in 2025 and 2026 from Royalty Pharma: $50M if FY 2025 global net sales reach ~$3.41B; $100M if FY 2026 global net sales reach ~$3.51B; Theravance Biopharma’s financial guidance for 2025 remains unchanged. This transaction represents the first outcome of the ongoing efforts of the Strategic Review Committee of the Board of Directors. Theravance Biopharma announced on November 12, 2024, that the Board of Directors had formed the Committee, composed entirely of independent directors, to assess all strategic alternatives available to the Company. The Company remains focused on disciplined capital allocation and returning excess cash to shareholders. The Committee will continue to evaluate a range of alternatives to further enhance shareholder value, though there can be no assurance that additional transactions will occur.