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What: Shares of Theravance , a biopharmaceutical company focused on central nervous system and respiratory disorders, jumped as much as 14% after the Food and Drug Administration approved it and GlaxoSmithKline's revolutionary inhaled COPD treatment Breo Ellipta.
So what: Announced midday, the FDA approval confirms the generally positive opinion that the FDA's panel had of Breo Ellipta that it reduced flare-ups and helped air flow in patients with COPD. The approval will necessitate a $30 million milestone payment to GlaxoSmithKline from Theravance, but clears the drug for commercial production as of the third quarter of this year.
Now what: An approval here seemed like all but a formality with the once-daily inhaled compound performing well in trials and providing a well-tolerated safety profile. Peak sales estimates of the drug range all over the place, but I see no reason it won't reach blockbuster status (in excess of $1 billion). Furthermore, with Theravance planning to split itself into two entities, I'd be honestly shocked not to see Glaxo make a bid for the Royal Management segment with Breo Ellipta now approved. Theravance is still an intriguing name moving forward.
Craving more input? Start by adding Theravance to your free and personalized watchlist so you can keep up on the latest news with the company.
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The article Why Theravance Shareholders Can Breathe Easier originally appeared on Fool.com.
Fool contributor Sean Williams has no material interest in any companies mentioned in this article. You can follow him on CAPS under the screen name TMFUltraLong, track every pick he makes under the screen name TrackUltraLong, and check him out on Twitter, where he goes by the handle @TMFUltraLong.Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.