UK pharmaceuticals group GSK considers taking full control of US partner Theravance

UK pharmaceuticals maker GlaxoSmithKline Plc (LON:GSK) may take full control of its US partner Theravance Inc (NASDAQ:THRX) if the latter’s respiratory drugs get the green light by the US Food and Drug Administration (FDA), Piper Jaffray (NYSE:PJC) analyst Ian Somaiya told Reuters.

At present, Theravance is awaiting FDA approval for two products that would be used for treating chronic obstructive pulmonary disease. The company is developing the drugs in cooperation with GSK, which already owns one-quarter of its stock. The final FDA decisions are expected by 12 May and 18 December.

Somaiya believes that GSK will be the frontrunner to buy out Theravance as the US company shares the economics on the respiratory business only with its partner. According to him, the purchase price could be set at around USD51.00 (EUR39.05) per share based on the potential royalty payments the target would receive on approval of the products.

Still, GSK could pay more as the cost of capital for the UK drugmaker is much lower, he added. Theravance’s current market capitalisation amounts to USD2.06bn.

Reuters could not reach Theravance, while a GSK representative refused to comment on rumours or speculation.