Theravance set to earn up to $1 billion from TD-1473 deal

Ireland-incorporated Theravance Biopharma (Nasdaq: TBPH) saw its shares rocket more than 16% to $28.38 in morning trading after it revealed a new collaboration deal that could earn the company in excess of $1 billion.

Theravance has entered into a global co-development and commercialization agreement with Janssen Biotech, a Johnson & Johnson (NYSE: JNJ) company, for TD-1473 and related back-up compounds for inflammatory intestinal diseases, including ulcerative colitis and Crohn's disease.

Under the terms of the accord, Theravance will receive an upfront $100 million and will be eligible for up to an additional $900 million in potential payments, if Janssen elects to remain in the collaboration following the completion of certain Phase II activities. Theravance, together with Janssen, will jointly develop and commercialize TD-1473 in inflammatory intestinal diseases, with the two companies sharing profits in the USA and expenses related to a potential Phase III program (67% to Janssen; 33% to Theravance).  Additionally, Theravance would receive double-digit tiered royalties on ex-US sales.