Theravance Biopharma acquisition by Zymeworks to close in 2H

Zymeworks Inc. (Nasdaq: ZYME) has entered into a definitive agreement to acquire Theravance Biopharma, Inc. (Nasdaq: TBPH) for $17.00 per share in cash, representing an equity value of approximately $929 million. The transaction is expected to close in the second half of 2026, subject to customary closing conditions.

Under the terms of the agreement, Theravance Biopharma shareholders will receive $17.00 in cash for each outstanding ordinary share. In addition, they will receive a contingent value right (CVR) entitling them to 80% of net proceeds realized from any future license, divestiture, or other monetization of ampreloxetine over the next ten years, with the remaining 20% to Zymeworks.

The acquisition is supported by an innovative non-recourse financing structure, primarily through a $350 million non-dilutive note from OMERS Life Sciences. This note is secured by the U.S. profit share from YUPELRI® (revefenacin), a long-acting muscarinic antagonist (LAMA) for the maintenance treatment of chronic obstructive pulmonary disease (COPD). Zymeworks will also contribute $219 million in cash at closing, with net cash balances from Theravance Biopharma of approximately $360 million.

YUPELRI® has been marketed in the United States since 2019 through a collaboration between Viatris Inc. and Theravance Biopharma. Full-year U.S. net sales of YUPELRI® in 2025 were $266.6 million, representing 12% growth over 2024. For the first quarter of 2026, U.S. net sales reported at $62.4 million, a 7% increase over the same quarter in 2025.

The acquisition is expected to be accretive to earnings and cash flow upon closing. YUPELRI® U.S. profit share and ex-U.S. royalties generate approximately $60 million in annualized cash flow at current run rates, with continued expected growth.

In addition to YUPELRI®, the acquisition includes other assets such as additional royalty interests, milestone payments, a preclinical innovation and investment (I&I) portfolio, and $2.5 billion in Irish tax attributes. These assets are expected to strengthen near-term cash flow generation and long-term development optionality.

The transaction has been unanimously approved by the boards of directors of both companies and is subject to customary closing conditions, including receipt of certain regulatory approvals and approval by Theravance Biopharma shareholders.

Zymeworks plans to continue executing its share repurchase program, which authorizes the repurchase of up to $125 million of its outstanding common stock. As of June 29, 2026, the company had repurchased 1,437,073 shares for $35.4 million, representing an average purchase price of $24.63 per common share.

The acquisition is expected to be accounted for as a business combination, with the purchase price primarily allocated to identifiable intangible assets, including YUPELRI® and contractual royalty streams. Potential milestone receipts evaluated as part of the purchase accounting process and recognized in accordance with applicable accounting standards.

Zymeworks expects to provide additional details on the purchase price allocation upon closing of the transaction. The company also intends to complete Theravance Biopharma's restructuring to align its resources with its commercial focus on YUPELRI®.

The acquisition represents a strategic move for Zymeworks to diversify its portfolio and enhance its long-term value creation. The company aims to leverage cash flows from established medicines to fund the development of next-generation therapies, supporting both current and future patient needs.