Orthostatic hypertension

Courtesy of Getty Images Theravance Biopharma is discontinuing research activities for its JAK inhibitor program in lung inflammation and reducing its headcount by about 17%, the Dublin and Bay area-based company announced Monday. The strategic realignment comes following a letter by one of Theravance’s largest shareholders, Irenic Capital, urging the company to review its governance structure and reassess its business strategies. Irenic owns around 4.2% of Theravance’s outstanding shares. In the letter, dated Feb. 27, Irenic said much of Theravance’s value is due to its commercialized and tangible assets rather than pipeline candidates and clinical trials. Moreover, while the biotech has a current trade price of $9.87 per share, Irenic believes Theravance is worth around $21 per share. According to Irenic’s analysis, Theravance already commands a per-share price of $15.89 based on its readily identifiable assets alone. These include its cash, chronic obstructive pulmonary disease (COPD) drug Yupelri (revefenacin) and milestones and royalties from Yupelri and Trelegy Ellipta (fluticasone furoate-umeclidinium-vilanterol), a steroid inhaler for COPD and asthma developed with GSK. Ampreloxetine, an investigational norepinephrine reuptake inhibitor currently in Phase III studies for neurogenic orthostatic hypotension (nOH), further bumps up Theravance’s trading price by a speculative $5.05 per share, the authors wrote. “The substantial disconnect between Theravance’s intrinsic value and its trading price reflects an absence of investor confidence in management and the Board,” Irenic wrote. In an investor call Monday, Rick Winningham, CEO of Theravance, addressed Irenic’s letter directly, saying the company has offered to discuss these issues and upcoming plans with Irenic under a non-disclosure agreement but had been refused. Theravance declined to take questions regarding the letter during the call. A Complicated History The same day, Theravance initiated strategic actions designed to maximize shareholder value. The company is discontinuing the development of its JAK inhibitor to focus its R&D resources on ampreloxetine. The candidate works by binding to norepinephrine transporters, which raises extracellular levels of norepinephrine, addressing an underlying pathological pathway of nOH. While its mechanism of action is promising, ampreloxetine has had a less than impressive clinical run. In September 2021, Theravance was forced to let go of 270 employees, 75% of its workforce, after ampreloxetine missed its Phase III endpoint in nOH. In April 2022, ampreloxetine again delivered mixed results when it did not improve treatment failure rates in the overall study population of a Phase III trial. Significant benefit was seen in patients with multiple system atrophy. Theravance narrowed the focus of ampreloxetine to those with MSA. Still, the company believes ampreloxetine has the potential to change the treatment landscape for nOH in patients with MSA. “Neither of the two approved therapies to treat orthostatic hypertension has demonstrated durable effectiveness in mitigating the debilitating symptoms for patients with MSA,” Richard Graham, senior vice president, R&D, Theravance, said during the call. Theravance plans to submit an Orphan Drug designation request for ampreloxetine in early 2023.