Zymeworks cuts deal to buy Theravance for $929m in cash

In a second M&A announcement today, Zymeworks has reached an agreement to buy Theravance Biopharma, claiming rights to Yupelri, a treatment for chronic obstructive pulmonary disease (COPD).

The all-cash deal, valued at $929 million, gives Canada-based Zymeworks a share of the US profits on Yupelri (revefenacin), which is sold by Viatris, as well as royalties on sales in other markets.

Sales of the drug came in at $267 million last year, all booked by Viatris, and Zymeworks is expecting its profit share to come in at around $60 million a year. Yupelri is the only nebulised long-acting muscarinic antagonist (LAMA) approved by the FDA for the maintenance treatment of COPD.

Vancouver, British Columbia-based Zymeworks mainly operates a royalty-driven biotechnology model, acquiring and developing assets for which commercial rights are licensed to other companies, whilst also carrying out early-stage R&D on its own candidates.

Yupelri will add to Zymeworks' cash flow generation, currently being driven by Ziihera (zanidatamab), a HER2-directed bispecific antibody licensed to and marketed by Jazz Pharma for biliary tract cancer (BTC).

If the deal goes through, Zymeworks could also get around $100 million in milestone payments on sales of GSK's COPD triple therapy Trelegy (fluticasone furoate/umeclidinium/vilanterol) from Royalty Pharma, which bought Theravance's royalty stream on the drug in 2022, and a 20% royalty stream on sales of Cumberland Pharma's Vibativ (telavancin) antibiotic.

The decision to acquire Theravance and Yupelri follows the conclusion of settlements with generic manufacturers that have delayed the likely entry of copycat versions of the drug until April 2039.

Zymeworks' chair and chief executive, Kenneth Galbraith, said that buying Theravance will help it to build "a more diversified and durable business" based on its model of combining partner-driven cash flows and innovative R&D.

"Yupelri addresses a critical need for the approximately 16 million Americans living with COPD, and we look forward to supporting continued access to this important therapy with Viatris," he added.

The transaction has been unanimously approved by the boards of directors of both companies and is expected to close in the second half of 2026. Zymeworks is funding the deal in part through a $350 million debt financing with OMERS Life Sciences, a unit of one of Canada's biggest pension funds, which will take a share of Yupelri's cash flow to service the debt.