Theravance could earn $445 million in milestones as beta2 agonists enter phase 2b clinical trials

By Jennifer Lanning Drey

Eugene, Ore., Sept. 20 - Theravance, Inc. has the potential to earn $445 million in milestone payments as product candidates in its Beyond Advair collaboration with GlaxoSmithKline advance through the clinic, Rick Winningham, Theravance's chief executive officer, said Wednesday at the Merrill Lynch global pharmaceutical, biotech and medtech conference.

"Beyond Advair is very important for us moving forward," Winningham said.

The collaboration was established in 2002 with the objective of taking a broad range of long-acting beta2 agonist products into the clinic through phase 2b clinical trials. Following all phase 2b clinical trails, the companies plan to select the best beta2 agonist for further development.

Two beta2 agonists from the collaboration, 797 and 444, entered phase 2b clinical trials in 2006, and one more is likely to follow before the end of the year, Winningham said.

"Right now, we have the opportunity to have multiple compounds through the 2b program prior to mid-2007," he said.

Theravance's potential milestone payments include a $220 million payment, which would be made upon approval and launch of a product, and a $150 million payment related to achievement of sales objectives, he said.

In addition, the company would receive a low- to mid-teen average royalty on total sales up to $4 billion for any beta2 agonists from the program to reach commercialization, he said.

Theravance is also advancing telavancin, its investigational antibiotic, which the company recently reported demonstrated a numerically better clinical cure rate of skin infections over vancomycin in phase 3 clinical trials.

"I think the strong phase 3 results plus an excellent relationship that we have with Astellas is going to allow us to differentiate telavancin from the competition," Winningham said.

Theravance is a South San Francisco, Calif.-based biopharmaceutical company focused on small molecule medicines in the therapeutic areas of respiratory disease, bacterial infections and gastrointestinal motility dysfunction.

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