Calling card put away

When GlaxoSmithKline gained an exclusive option in 2004 to all of Theravance's programs through August 2007, the initial worry among investors was that THRX had become a hostage to the pharma giant. That turned out not to be the case. Indeed, by the time the option expired last week, no one on the Street expected GSK to exercise its call to acquire ownership of half of THRX. And on Friday that proved true.

Under the 2004 deal, GlaxoSmithKline (LSE:GSK; GSK) paid $20 million up front plus $108.9 million in an equity investment that increased its stake from 6% to 19%. The deal included the potential for $162-$240 million in clinical, regulatory and commercial milestones per program optioned under the deal, plus royalties (see BioCentury, April 5, 2004). ...