The separation of Theravance, Inc.’s businesses into two independent, publicly traded companies is now expected to be completed during 2Q14. In conjunction with the separation, Theravance, Theravance Biopharma, Inc., and Glaxo Group Ltd. (GSK) have entered into a series of agreements clarifying the spin-off and operations, as well as the allocation of potential future royalties on sales of UMEC/VI/FF, MABA, MABA/ICS. Theravance will now receive 15% and Theravance Biopharma will receive 85%, adjusted from the previous 2% and 98% respectively, to better align the economic opportunity for Theravance, Inc., which retains overall responsibility for the GSK relationship and programs.
 
Following the separation, Theravance, Inc. will directly or indirectly hold and continue to manage the rights to the respiratory product revenues from GSK. These products include RELVAR/BREO ELLIPTA, ANORO ELLIPTA, and VI monotherapy. All other programs currently partnered with GSK will be held and managed by a LLC subsidiary of Theravance.
 
Theravance Biopharma will leverage the multivalent drug discovery platform and small-molecule product candidate pipeline currently focused on respiratory, central nervous system/pain, gastrointestinal disorders and infectious diseases. Theravance Biopharma will receive 85% of Theravance’s economic interest in the MABA, MABA/ICS and UMEC/VI/FF drug programs, each of which is partnered with GSK. Also, Theravance Biopharma expects to receive approximately $300 million in capital at separation to fund operations through significant potential milestones during the next two to three years. Theravance Biopharma may operate under a new name to be determined.
 
“We are excited about our plans to complete the separation of Theravance to create two independent, publicly traded companies with differing business objectives and opportunities,” said Rick E. Winningham, chief executive officer. “We continue to believe this separation will provide investors with the opportunity to unlock potential value from two different sets of assets, better align employee incentives and provide the opportunity for significant capital returns. Additionally, I am pleased that we recently entered into a series of agreements with GSK clarifying how the companies will operate following the separation and with the goal of bringing a portfolio of new respiratory products for the treatment of COPD and asthma to patients suffering from these debilitating diseases.”