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Has Theravance Just Given Away 40% Of Its Value?

Theravance (THRX) today issued a press release about $450 million private placement of 9% non-recourse PhaRMA(SM) notes.

The notes are secured by a security interest in a segregated bank account established to receive 40% of royalties from global net sales of RELVAR®/BREO® ELLIPTA® (fluticasone furoate/vilanterol "FF/VI"), ANORO™ ELLIPTA™ (umeclidinium bromide/vilanterol, UMEC/VI) and, if developed, approved and commercialized, VI monotherapy, all of which are partnered with GSK, beginning with sales occurring on or after April 1, 2014 and ending upon the earlier of full repayment of principal or May 15, 2029. The notes are not convertible into Theravance equity and have no security interest in nor rights under any Theravance agreement with GSK. The notes...
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