Theravance Biopharma, Mylan partner to develop and commercialize TD-4208 for COPD treatment

Theravance Biopharma, Inc. (NASDAQ: TBPH) and Mylan Inc. (NASDAQ: MYL) today announced that the two companies will partner on the development and, subject to FDA approval, commercialization of TD-4208, a novel investigational once-daily nebulized long-acting muscarinic antagonist (LAMA) for chronic obstructive pulmonary disease (COPD) and other respiratory diseases.

COPD is a growing and devastating disease that is the third leading cause of death in the U.S. An estimated 12.7 million American adults are diagnosed with COPD and an almost equal number are believed to be undiagnosed. Once-daily LAMAs are currently the cornerstone of maintenance therapy for patients with COPD, but existing LAMAs are only available in handheld devices. Approximately 9% of the treated COPD patients in the U.S. either need or prefer a nebulized product for delivery of their ongoing maintenance therapy and a further 30% of COPD patients use nebulized treatment on an intermittent basis. In the nebulizer segment, there is no once-daily or twice-daily muscarinic antagonist therapy available.

TD-4208 has shown positive top-line results in COPD patients in multiple Phase 2 studies, and the FDA recently agreed to the design of the Phase 3 registrational program, which is anticipated to begin this year. Theravance Biopharma and Mylan believe that TD-4208 has the potential to be a best-in-class once-daily single-agent nebulized product for COPD patients who require, or prefer, nebulized therapy.

"This exciting development and commercialization collaboration leverages Mylan's expertise in manufacturing and marketing complex respiratory products and Theravance Biopharma's respiratory clinical development capabilities. The addition of TD-4208 to our pipeline is highly complementary with our existing respiratory portfolio, including our marketed nebulized COPD product, Perforomist® Inhalation Solution, and reinforces Mylan's leadership in nebulized respiratory therapy," said Mylan CEO Heather Bresch.

"Partnering with a world leader in nebulized respiratory therapies enables us to expand the breadth of our TD-4208 development program and extend our commercial reach beyond the acute care setting where we currently market VIBATIV® (telavancin). Funding of the Phase 3 registrational program by Mylan strengthens our company's capital position and enhances our financial flexibility to advance other high-value pipeline assets alongside TD-4208," said Rick E Winningham, Chairman and Chief Executive Officer, Theravance Biopharma. "We look forward to working with Mylan to bring this potential first-in-class, once-daily nebulized therapy to COPD patients."

Under the terms of the agreement, Mylan and Theravance Biopharma will co-develop nebulized TD-4208 for COPD and other respiratory diseases. Theravance Biopharma will lead the U.S. registrational development program and Mylan will be responsible for reimbursement of Theravance Biopharma's costs for that program up until the approval of the first new drug application, after which costs will be shared. In addition, Mylan will be responsible for commercial manufacturing. In the U.S., Mylan will lead commercialization and Theravance Biopharma will retain the right to co-promote the product under a profit-sharing arrangement. Outside the U.S. (excluding China), Mylan will be responsible for development and commercialization and pay Theravance Biopharma a royalty on net sales. Theravance Biopharma retains worldwide rights to TD-4208 delivered through other dosage forms, such as a metered dose inhaler or dry powder inhaler (MDI/DPI).

In addition to funding the U.S. registrational development program, Mylan will pay Theravance Biopharma an initial payment of $15 million in cash and has agreed to make a $30 million equity investment in Theravance Biopharma by purchasing newly issued Ordinary Shares at a price of $18.92 per share, which is equal to a 10% premium over the 5-day trailing volume-weighted average price ending January 30. Under the terms of the agreement, Theravance Biopharma is eligible to receive potential development and sales milestone payments totaling $220 million in the aggregate, with $175 million associated with TD-4208 monotherapy and $45 million for future potential combination products.

Mylan and Theravance Biopharma believe that TD-4208 has the potential to be the only FDA-approved once-daily nebulized LAMA product for COPD patients in the near term and it may offer longer-term opportunities for combination with other nebulized products. In addition, the patent portfolio for TD-4208 is currently expected to provide a TD-4208 nebulized product with exclusivity in the U.S. until at least 2025, which does not include any potential patent term extensions. Given the short- and long-term potential of this differentiated product, and in an effort to optimize its uses of capital, Mylan has decided to redeploy resources from the development of its combination nebulized ICS/LABA product (Combo) to TD-4208.