Theravance Shares Popped: What You Need to Know

Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

What: Shares of drugmaker Theravance (Nasdaq: THRX  ) jumped 10% today after partner GlaxoSmithKline (NYSE: GSK  ) announced an additional investment in the company.

So what: GlaxoSmithKline will buy 5.75 million shares for $22.50 each for an additional investment of $129.4 million in Theravance. This will bring GlaxoSmithKline's stake up to 19% as the company gains confidence in new lung disease and asthma drug Relovair.

Now what: It looks like GlaxoSmithKline got a pretty good deal on the shares considering the stock closed at $22.85 last week and shares are now trading around $25.20. This isn't quite a takeover bid, but I have to wonder if there will be one coming in the near future. Despite continued losses at Theravance, I think if the stock pulls back over the next few days it could be a good deal. I just don't want to pay too much more than the deal GlaxoSmithKline is getting.

Interested in more info on Theravance? Add it to your watchlist.

Fool contributor Travis Hoium does not have a position in any company mentioned. You can follow Travis on Twitter at @FlushDrawFool, check out his personal stock holdings or follow his CAPS picks at TMFFlushDraw.

GlaxoSmithKline is a Motley Fool Global Gains recommendation. The Fool owns shares of and has written covered calls on GlaxoSmithKline. 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.


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