Mylan buys into Theravance's COPD contender in $265M deal

Generics giant Mylan ($MYL) is shouldering its way into the blockbuster market for COPD treatments, signing a $265 million deal with the respiratory experts at Theravance Biopharma ($TBPH) to get its hands on a late-stage contender.

Under the agreement, Mylan will hand over a $15 million cash payment and make a $30 million equity investment in Theravance, promising $220 million more if the collaboration goes according to plan. In exchange, it will partner up on TD-4208, a once-daily long-acting muscarinic antagonist (LAMA) designed to relieve symptoms of COPD and other respiratory diseases. The drug posted positive top-line results in Phase II, Theravance said, and is on track to begin late-stage trials later this year. Per the deal, Theravance will pay its way through Phase III with Mylan reimbursing its costs up until an FDA filing.

The majority of once-a-day LAMA treatments, like Boehringer Ingelheim's Spiriva, are available only as handheld devices, Theravance said, creating an unmet need for the estimated 9% of American COPD patients who need or prefer the mist of a nebulizer. Mylan figures TD-4208 can fill that hole in the short term and, eventually, become part of a cocktail therapy with other bronchodilators.

The deal is Theravance's first major move since splitting in two last year, with one publicly traded company handling its revenue-generating drugs and the other leading the charge on R&D. The latter, Theravance Biopharma, is due 85% of the proceeds from its sibling's collaborations with GlaxoSmithKline ($GSK), a trio of marketed respiratory drugs with combined peak sales estimates north of $3.5 billion. That revenue stream will help it hit the gas on a pipeline of in-house treatments, and the Mylan deal fits in with Theravance's broad strategy, CEO Rick Winningham said.

"Funding of the Phase III registrational program by Mylan strengthens our company's capital position and enhances our financial flexibility to advance other high-value pipeline assets alongside TD-4208," Winningham said in a statement.

Beyond its lead asset, Theravance has four wholly owned Phase II treatments: TD-1211, designed to counteract the gastrointestinal side effects of opioid therapy; TD-9855, a norepinephrine and serotonin reuptake inhibitor with hopes of treating chronic pain; TD-1792, a treatment for bacterial infections; and TD-5108, a gastroparesis drug.

Theravance's deal with Mylan covers only a nebulized formulation of TD-4208, allowing the biotech to keep the global rights to metered dose inhaler or dry powder inhaler versions of the treatment. The biotech's shares jumped as much as 12% on news of the agreement Monday.

- read the statement

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