Zymeworks expands into respiratory market with US$929M acquisition of Theravance Biopharma

CANADA—Zymeworks has agreed to acquire Theravance Biopharma in a cash transaction valued at US$929 million, marking a major strategic expansion beyond its traditional oncology business and into the respiratory disease market.

The acquisition occurs only four months after Theravance announced a major restructuring, which included shutting down its research and development division, halving its workforce, and examining strategic options following the setback of its main experimental therapy.

Under the agreement, Zymeworks, based in Vancouver, will pay US$17 per share in cash and issue a contingent value right (CVR), which may provide Theravance shareholders with additional benefits from future deals involving its investigational drug, ampreloxetine.

Although the offer represents a slight discount to Theravance’s most recent closing share price, it is a 22% premium over the company’s March 3 share price, when disappointing Phase III trial results for ampreloxetine triggered a sharp decline in market value.

Yupelri strengthens commercial portfolio

The acquisition gives Zymeworks access to Yupelri, an FDA-approved, once-daily nebulized maintenance therapy for chronic obstructive pulmonary disease (COPD) that Theravance markets in partnership with Viatris.

Theravance currently receives a 35% share of U.S. profits from the product, making it an important source of recurring revenue.

Yupelri generated US$266.6 million in U.S. net sales during 2025, representing a 12% increase from the previous year.

Sales continued to grow in 2026, reaching US$62.4 million during the first quarter, up 7% year over year.

At current performance levels, the product contributes annualized cash flows of between US$60 million and US$70 million.

The addition of Yupelri immediately diversifies Zymeworks’ revenue base, which has largely depended on oncology assets such as Ziihera, its HER2-targeted therapy developed with Jazz Pharmaceuticals.

Company executives said the new commercial income will support continued investment in research while reducing reliance on future fundraising.

Future value tied to ampreloxetine

The agreement also preserves the potential value of Theravance’s investigational medicine, ampreloxetine, despite its recent clinical setback.

Through the CVR arrangement, existing Theravance shareholders will receive 80% of any net proceeds generated from future licensing, divestiture, or other commercialization deals involving the asset over the next 10 years, while Zymeworks will retain the remaining 20%.

Theravance launched its strategic review after ampreloxetine failed to meet the primary endpoint in a Phase III study evaluating the treatment for symptomatic neurogenic orthostatic hypotension.

The disappointing results prompted the company to scale back operations and consider selling the business.

Building a diversified growth strategy

The proposed acquisition follows Theravance’s earlier efforts to streamline its portfolio.

Two years ago, the company sold the remaining royalties from the blockbuster asthma and COPD inhaler Trelegy to GSK for US$225 million as part of a broader strategic review.

Zymeworks said the transaction fits its recently announced strategy of combining innovative research with stable commercial cash flows.

The company also disclosed that the acquisition will be financed through a combination of existing cash, Theravance’s expected cash balance at closing, and a US$350 million non-recourse financing arrangement backed by OMERS Life Sciences.

In addition, Zymeworks expects to preserve approximately US$2.5 billion in Theravance’s Irish tax attributes for future use.

The deal has received unanimous approval from the boards of both companies and is expected to close during the second half of 2026, subject to shareholder and regulatory approvals.