Theravance sets up deal to sell rights to asthma drug to Royalty Pharma

Shares of Theravance Biopharma Inc.
TBPH,
-2.78%
were up 13.8% in premarket trading on Thursday, the day after the company announced plans to sell the royalty rights to GlaxoSmithKline’s
GSK,
-1.71%
Trelegy Ellipta to Royalty Pharma
RPRX,
+1.86%
for $1.1 billion in cash and up to $450 million in potential milestone payments. Trelegy Ellipta is a treatment for asthma and chronic obstructive pulmonary disease. Theravance also outlined plans to reduce debt, including repaying the company’s non-recourse Trelegy notes for about $420 million once the Royalty deal closes and initiating a tender offer to retire roughly $230 million of its convertible senior notes. Theravance expects to have $430 million in cash on its balance sheet after taking these steps. Theravance’s stock is down 21.9% this year, while the broader S&P 500
SPX,
-0.30%
has declined 20.2%.