CVR Sharing Value of Ampreloxetine: Details of Teravance Acquisition

Zymeworks Inc. (Nasdaq: ZYME) has filed the form of contingent value rights (CVRs) agreement that will be granted to Theravance Biopharma Inc. (Nasdaq: TBPH) shareholders and certain employees in connection with its proposed acquisition of Theravance through a Cayman Islands subsidiary. Under the filing, holders of one share of Theravance common stock will receive one restricted CVR. Over the next ten years, CVR holders will be entitled to 80% of net license revenues from any licenses or divestitures related to amphreloxetine, a $50 million milestone payment upon first commercial sale in key markets (approximately KRW 65 billion), and thereafter a 10% royalty on net product sales of amphreloxetine for the longer of the remaining patent or exclusivity period or ten years from first sale. Zymeworks emphasized that it has no obligation to develop or commercialize amphreloxetine, that the CVRs confer no voting or dividend rights nor any equity interest in Zymeworks, and that certain rights may expire five years after issuance depending on tax and timing conditions. (Source: ir.zymeworks.com)

On June 29, Zymeworks announced a merger agreement to acquire Theravance for $17.00 in cash per share plus amphreloxetine-linked CVRs, for a total transaction value of approximately $929 million (about KRW 1.2 trillion). In May, the company also presented Phase 1 clinical data for its antibody–drug conjugate candidate ZW191 and unveiled a share repurchase program of up to $125 million. (Source: globenewswire.com)

Headquartered in Vancouver, Canada, Zymeworks is a biotech company developing bispecific antibodies and antibody–drug conjugates, focusing on oncology pipelines and technology licensing revenue. Theravance Biopharma, the acquisition target, is a specialty pharmaceutical company with the respiratory treatment Yupelri and the central nervous system candidate amphreloxetine. Through this transaction, Zymeworks aims to expand beyond oncology into chronic respiratory and CNS indications, thereby broadening its portfolio and cash-flow base. (Source: globenewswire.com)