Theravance to split into two, halting speculation of a full takeover by GSK

US drug developer Theravance (Nasdaq: THRX) has announced its intention to create two independent publicly traded companies with differing business objectives and opportunities, designed to unlock potential value, facilitate return of capital to shareholder. The split plan comes after weeks of speculation that the company could be bought by UH pharma giant GlaxoSmithKline (LSE: GSK), Theravance's largest shareholder with a stake of about 27% and partner on the development of some of its drug candidates.

One company, referred to as Royalty Management Co, will focus on managing all development and commercial responsibilities under the LABA collaboration with GSK and associated potential royalty revenues from Relvar or Breo Ellipta (fluticasone furoate/vilanterol: FF/VI), Anoro Ellipta (umeclidinium bromide/vilanterol: UMEC/VI) and VI monotherapy, with the intention of providing a consistent return of capital to stockholders.

The other company, referred to as Theravance Biopharma, will be a biopharmaceutical company focused on discovery, development and commercialization of small-molecule medicines in areas of significant unmet medical need.

Decision follows review of alternatives