Zymeworks announced a new plan to become a royalty-driven company last year, making Theravance a perfect match.
Zymeworks will spend nearly $1 billion to acquire troubled biotech Theravance, picking up an approved lung disease drug and a handful of lucrative royalty contracts. The assets will slide into a diversified portfolio that also includes developmental programs in oncology, providing differentiated cashflow for the Vancouver biotech, which just last year announced a new plan to become a royalty-driven company.
The star of the complex deal, which has a total value of $929 million, is Yupelri, a long-acting muscarinic antagonist (LAMA) approved in 2019 for chronic obstructive pulmonary disease, according to a Monday press release. Theravance markets the drug with Viatris, providing Zymeworks with a 35% U.S. net profit share. The therapy made $266.6 million in 2025, marking growth of 12% from the year prior. Theravance will also pass along eligibility for $125 million in commercial milestone payments for Yupelri based on certain U.S. sales achievements plus royalties.
But that’s not all. Theravance has an agreement with Royalty Pharma that Zymeworks will acquire, with $100 million in milestone payments expected in the first quarter of 2027 based on global net sales of GSK’s COPD and asthma inhaler Trelegy Ellipta. Another royalty deal that Theravance previously struck with Cumberland will provide Zymeworks with 20% on net sales of the antibacterial therapy Vibativ.
Zymeworks will also pick up a handful of investigational assets, though the future for these programs is uncertain. The Vancouver biotech said the programs “will be evaluated in the context of the Company’s broader pipeline and capital allocation framework.” These assets could be sold off, but a representative from Theravance will also review a potential licensing deal for ampreloxetine while the deal closes. The drug has been under development for neurodegenerative disease.
The Zymeworks deal also includes a contingent value right for Theravance shareholders to receive 80% of any net proceeds from ampreloxetine, according to Theravance’s separate press release.
The cherry on top is that Theravance has $2.5 billion in Irish tax attributes available for potential future utilization.
Theravance announced plans in March to wind down R&D operations after ampreloxetine failed the Phase 3 CYPRESS trial that tested the drug in neurogenic orthostatic hypotension in patients with multiple system atrophy. A restructuring followed, with a plan to cut operating expenses by 60%.
But Theravance has been in trouble for much longer, with multiple program failures, layoffs and restructurings conducted over the years to try and right the ship. The deal with Zymeworks follows a comprehensive strategic review, Theravance said on Monday.
Zymeworks is a natural partner for the complex royalty structure honed by Theravance. When Zymeworks announced the plan in November 2025 to shift its business model to be more dependent on royalty-driven revenue, it was headlined by its lead program, the HER2 bispecific antibody Ziihera. Now, the company is focusing on a combination of internal development, licensing and acquisitions.
