Why Theravance Jumped

Before you go, we thought you'd like these...
Before you go close icon

Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

What: Shares of biotech Theravance (NAS: THRX) have jumped today by as much as 23% on news that behemoth drugmaker GlaxoSmithKline (NYS: GSK) is boosting its stake in the company.

So what: GlaxoSmithKline is investing roughly $213 million in the smaller company in a deal that gives it 10 million new shares through a private placement at a price of $21.29 each, a 9% premium to Friday's closing price. That brings GlaxoSmithKline's stake up to 25.8 million shares, or almost 27% of Theravance.


Now what: The two companies are currently partnering to develop Relovair, an experimental drug for lung disease and asthma. The pair has been collaborating for a decade and the investment signifies further confidence in Theravance. Relovair is seen as the follow-up successor to GlaxoSmithKline's Advair asthma drug, and Relovair has already completed phase 3 development.

Interested in more info on Theravance? Add it to your watchlist byclicking here.

At the time this article was published Fool contributorEvan Niuholds no position in any company mentioned.Click hereto see his holdings and a short bio.Motley Fool newsletter serviceshave recommended buying shares of GlaxoSmithKline. The Motley Fool has adisclosure policy.We Fools may not all hold the same opinions, but we all believe thatconsidering a diverse range of insightsmakes us better investors. Try any of our Foolish newsletter servicesfree for 30 days.

Copyright © 1995 - 2012 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.

Read Full Story

Want more news like this?

Sign up for Finance Report by AOL and get everything from business news to personal finance tips delivered directly to your inbox daily!

Subscribe to our other newsletters

Emails may offer personalized content or ads. Learn more. You may unsubscribe any time.

From Our Partners