Theravance May Be Moving Higher

| About: Innoviva, Inc. (INVA)

As we reported last week, Glaxo Smith Kline (NYSE:GSK) has been busy buying up shares of Theravance Inc (THRX). The insider (10% owner) recently purchased $1,298,476.50 worth of shares in the biotech which is focused on the discovery, development and commercialization of small molecule medicines in therapeutic areas of respiratory disease, bacterial infections and central nervous system on Thursday.

On Thursday Oct, 27th, the firm reported its financial results for the third quarter of 2011. Revenue was $6.4 million. Net loss for the third quarter of 2011 was $30.6 million or $0.37 per share. Cash, cash equivalents, and marketable securities totaled $265.2 million as of September 30, 2011.

"We are pleased with another quarter of significant progress with our key programs," said Rick E Winningham, Chief Executive Officer. "Our respiratory programs with GSK continue to move forward in line with our expectations. We anticipate reporting topline results from the RELOVAIR™ Phase 3 exacerbation studies in COPD in early 2012 and from the asthma program during the first half of 2012. In addition, we are excited about the recent expansion of the MABA program under the Strategic Alliance. Under the expanded MABA agreement, GSK licensed additional preclinical MABA compounds and returned full rights to our MARIN and ARNI programs. We remain confident with our lead MABA compound, '081 and we believe the expansion of the MABA agreement gives us multiple opportunities to succeed in the MABA program. In our non-respiratory programs, VIBATIV® was approved in Europe and we made progress in enrollment in the Phase 2b program in opioid-induced constipation with TD-1211."

In March 2004, Theravance entered into a strategic alliance whereby GlaxoSmithKline received an option to license product candidates from all of Theravance's full drug discovery programs initiated prior to September 1, 2007, on pre-determined terms and on an exclusive, worldwide basis. Upon licensing a program, GSK is responsible for funding all future development, manufacturing and commercialization activities for product candidates in that program. Currently, our Bifunctional Muscarinic Antagonist-Beta2 Agonist program for the treatment of chronic obstructive pulmonary disorder is licensed by GSK under the terms of the strategic alliance.

It appears the company is trying to position themselves more visibly as Rick Winningham, the CEO of South San Francisco-based biopharmaceutical company has just been named to the California Healthcare Institute's board of directors. A news brief about the development had the board's president singing praise about Winningham. “We are pleased to welcome Theravance to our board,” said David Gollaher. “Theravance is working to advance important innovations to patients in need. Rick will help inform our approach to the key issues facing our industry today, from FDA regulation to coverage and payment for novel therapeutics.”

Starting this week, the company will also be presenting at two upcoming health care conferences:

  • Credit Suisse 2011 Healthcare Conference
  • Arizona Biltmore Hotel, Phoenix, AZ
  • Wednesday, November 9, 2011
  • 10:30 a.m. MST
  • Piper Jaffray Healthcare Conference
  • The New York Palace, New York, NY
  • Tuesday, November 29, 2011
  • 8:30 a.m. EST

From a technical standpoint, traders should watch to see if the support levels which are currently in play hold up- particularly as these healthcare conferences play out.

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Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

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