What happened

The stock of Theravance Biopharma (TBPH -2.46%) is losing ground after a phase 2 trial failed to meet its primary endpoint. Investors disappointed with the company's mid-stage pipeline asset sent the stock down 34.4% as of 2:28 p.m. EDT on Tuesday.

So what 

Sales of Theravance Biopharma's commercial-stage drugs aren't strong enough yet to make ends meet. Investors hoping izencitinib can become a blockbuster treatment that bridges the gap were met with disappointment today.

Physician taking notes in a hospital room.

Image source: Getty Images.

The company read out results from a phase 2b trial with izencitinib, an oral treatment candidate for inflammatory bowel disease patients. Sadly, patients randomized to receive izencitinib didn't achieve significant improvement in disease severity compared to those who received a placebo. 

Theravance's inhaled antiviral candidate for the treatment of severe COVID-19 flopped in a phase 2 trial this June.

Now what

Theravance Biopharma is developing izencitinib in partnership with Johnson & Johnson (JNJ -1.82%). Under the terms of their deal, Theravance is still eligible to receive $900 million in milestone payments from izencitinib and other potential candidates to treat inflammation of the intestinal lining.

Today's flop in ulcerative colitis doesn't bode well for an ongoing phase 2 trial with Crohn's disease patients and izencitinib. The company expects to read out top-line Crohn's disease trial results around the end of 2021 or the beginning of 2022.

Theravance doesn't seem too enthusiastic about its izencitinib program and flat out told investors it would divert resources to more promising ventures. There's no shortage of options. For example, the company expects to read out top-line data from a phase 3 trial with ampreloxetine, a potential new treatment for neurogenic orthostatic hypotension before the end of September.