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Theravance's (TBPH) Q3 Earnings Beat, Restructuring On Track

Theravance's (TBPH) loss narrows in the third quarter of 2021 while revenues decline year over year. Stock down.

This story originally appeared on Zacks

Theravance Biopharma, Inc. TBPH incurred a loss of 48 cents per share in the third quarter of 2021, narrower than the Zacks Consensus Estimate of a loss of 60 cents and the year-ago loss of $1.16.     

- Zacks

Total revenues of $13.2 million in the quarter missed the Zacks Consensus Estimate of $13.55 million. Revenues were down 27.9% year over year. Revenues declined due to lower non-cash collaboration revenues from Johnson & Johnson JNJ due to the closure of the izencitinib clinical program.

The top line comprised collaboration revenues worth $2.8 million from Janssen, a wholly-owned subsidiary of J&J, and $10.4 million from the collaboration agreement with Viatris VTRS in relation to Yupelri (revefenacin).

Theravance and Viatris are jointly developing and commercializing Yupelri, a long-acting muscarinic antagonist, as a once-daily nebulized treatment of chronic obstructive pulmonary disease (“COPD”). Viatris and Theravance are sharing U.S. profits and losses related to the commercialization of Yupelri. While Viatris gets 65% of the profits, Theravance gets 35%.

Shares of Theravance were down 12.1% in after-market trading on Nov 3, following the mixed results. The company’s shares have declined 54.5% so far this year compared with the industry’s decrease of 14.2%.

Zacks Investment ResearchImage Source: Zacks Investment Research

Quarter in Detail

Theravance holds an economic interest in royalties earned from GlaxoSmithKline GSK on the triple combination COPD treatment, Trelegy Ellipta’s global sales. In the third quarter, Glaxo recorded sales worth $449 million from Trelegy Ellipta. Theravance is eligible to receive 5.5-8.5% tiered royalties on the product's worldwide net sales.

Research & development expenses were $43.7 million, down 35.2% from the year-ago quarter.

Selling, general & administrative expenses were down 22.5% year over year to $21.3 million.

As of Sep 30, 2021, Theravance had cash, cash equivalents and marketable securities worth $216.2 million compared with $265 million as of Jun 30, 2021.

2021 Guidance Maintained

Theravance maintained its previous guidance for operating expenses in 2021. It expects R&D expense to be in the range of $180-$190 million and SG&A expense between $70 million and $80 million.

Restructuring Plans

In September, Theravance announced a major cost-reduction program and undertook strategic actions to prioritize marketed and investigational respiratory therapeutics in order to maximize shareholder value in the long run. The decision was taken following the failure of its two non-respiratory disease-related programs — izencitinib and ampreloxetine — in a phase II and phase III study, respectively. The company plans to reduce the workforce by 75%, with the majority of the reduction to be completed by the end of November and the rest in February next year. The company expects annualized savings of $165 million in operating expenses in 2022.

However, the company plans to complete ongoing studies on izencitinib and ampreloxetine. A phase III study is evaluating ampreloxetine in symptomatic neurogenic orthostatic hypotension patients. A phase II study is evaluating izencitinib in patients with Crohn's disease. Top-line data from both studies is expected in the first quarter of 2022.

Theravance Biopharma, Inc. Price, Consensus and EPS Surprise

Theravance Biopharma, Inc. Price, Consensus and EPS Surprise

Theravance Biopharma, Inc. price-consensus-eps-surprise-chart | Theravance Biopharma, Inc. Quote

Zacks Rank

Theravance currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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