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Theravance Falls On Relovair Comments, Stock Offer

From Associated Press (March 18, 2010)

NEW YORK -- Shares of Theravance Inc. slid Thursday after the drug developer announced a stock offering and said it is not sure what regulators want to see in late-stage clinical trials of its asthma drug Relovair.

In afternoon trading, shares of the South San Francisco, Calif., company lost 53 cents, or 4.2 percent, to $11.96.

Late Wednesday, Theravance announced it will sell 7.5 million shares to raise money for general corporate purposes. Underwriters will have an option to buy another 1.1 million shares to cover overallotments.

Additionally, on Thursday Theravance said its partner GlaxoSmithKline PLC is recruiting patients for a study of Relovair. However Theravance said it is not clear about the FDA’s position on drugs like Relovair.

Because it does not know what the agency wants in terms of trial design or measurements, Theravance warned of potential increased time and costs for testing the drug, and greater risk it will not be able to get Relovair approved.

GlaxoSmithKline is planning to test a combination of Relovair and a corticosteroid to see if the combination is better than the steroid alone at preventing hospitalizations, intubation, and death.

The company’s comments were disclosed in a filing with the Securities and Exchange Commission. Theravance made its statements based on meetings with an FDA advisory panel on March 10 and 11.

Robert W. Baird and Co. analyst Thomas Russo said the start of late stage testing is an important milestone for Theravance. He said the FDA’s requirements are "not a done deal" but said the study has a good chance of meeting the agency’s demands.


Posted: March 2010