Theravance, Inc. THRX reported a loss of 7 cents per share in the second-quarter 2015, a penny wider than the Zacks Consensus Estimate but narrower than the year-ago loss of 18 cents per share and the first-quarter 2015 loss of 9 cents per share.
Revenues in the second quarter of 2015 were $10.7 million, up 55.1% sequentially but just shy of the Zacks Consensus Estimate of $11 million.
Quarter in Detail
Theravance reported a 37% sequential increase in royalties ($13.9 million) from net sales of GlaxoSmithKline’s GSK. Relvar/Breo Ellipta and Anoro Ellipta. The increase was attributable to a sequential 37% surge in Relvar/Breo Ellipta sales ($82 million) and a sequential 34% increase in Anoro Ellipta sales ($23.7 million).
The late Apr 2015 FDA approval of Breo Ellipta for asthma in adults expanded the patient population significantly – scrips increased 44% sequentially, according to IMS data. The company also reported an increase in market share. Sales in ex-U.S markets were driven by strong performance in Japan and Germany and launches in additional countries. In addition, Anoro Ellipta scrips recoded a 49% increase from the first quarter of 2015. Both products gained market share.
Research & development (R&D) expenses amounted to $0.6 million. Likewise, general & administrative (G&A) expenses declined 9.3% sequentially to $4.9 million.
Outlook
The company continues to expect operating expenses in the range of $17 million to $19 million.
Meanwhile, data from the SUMMIT study on Relvar/Breo Ellipta (evaluating the impact of Relvar/Breo Ellipta on all-cause morality among chronic obstructive pulmonary disease (COPD) patients with cardiovascular disease or who are at increased risk for cardiovascular disease) should be out by the end of the year. The company also expects to complete the Salford Lung Study in COPD by year-end with initial data expected in 2016.
Our Take
Theravance’s second quarter performance fell short of expectations with the company posting a wider-than-expected loss and a slight revenue miss. However, the performance of Relvar/Breo Ellipta is encouraging and the expanded label should drive uptake further.
Theravance currently carries a Zacks Rank #3 (Hold). Some better-ranked stocks in the health care sector include Ligand Pharmaceuticals Incorporated LGND and AMAG Pharmaceuticals, Inc. AMAG each sporting a Zacks Rank #1 (Strong Buy).
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