Please ensure Javascript is enabled for purposes of website accessibility

Why Theravance Shares Roared Higher -- Again

By Sean Williams - Apr 18, 2013 at 1:14PM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

Investors can breathe easier after a meeting with the Food and Drug Administration's panel.

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 Theravance (NASDAQ: THRX), a biopharmaceutical company that focuses on central nervous system and respiratory disorders, leapt as much as 19% -- its second double-digit jump this week -- following a positive recommendation from the Food and Drug Administration's panel regarding COPD drug Breo Ellipta.

So what: Breo is a once-daily treatment Theravance co-developed with GlaxoSmithKline (GSK -0.81%) that targets long-acting relief for COPD sufferers and is taken as a dry inhalable powder through a device known as Ellipta. The FDA's panel voted 9-4 in favor of recommending approval of the drug, noting that it demonstrated effectiveness in reducing COPD exacerbations and in treating airflow obstruction. Furthermore, a separate vote by the panel of 10-3 indicated that Breo had been proven adequately safe given its proposed indications.

Now what: This is one step closer to Glaxo getting its Advair back-up approved and for Theravance to getting a potential blockbuster approved and on the market. I stand by my assessment that if Breo is approved, Glaxo would be foolish not to buy Theravance; but that's just one man's opinion. As always, keep in mind that just because the FDA's panel recommended approval the FDA is not bound by its panels' recommendation. In this case, I'd have a hard time seeing what would stop Breo from gaining approval unless there was some concern from the FDA about the delivery mechanism or manufacturing, of which neither was brought up during the FDA panel meeting.

Craving more input? Start by adding Theravance to your free and personalized watchlist so you can keep up on the latest news with the company.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

GlaxoSmithKline plc Stock Quote
GlaxoSmithKline plc
GSK
$44.06 (-0.81%) $0.36

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning service.

Stock Advisor Returns
356%
 
S&P 500 Returns
124%

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 05/29/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.