H.C. Wainwright Reiterates Buy Rating on Theravance Biopharma (TBPH)

H.C. Wainwright analyst Douglas Tsao reiterated a Buy rating and $15.00 price target on Theravance Biopharma (NASDAQ: TBPH).

The analyst commented: "We are updating our model to implement the appropriate accounting treatment for the Trelegy milestones that the company is owed for it achieving sales targets. We had previously modeled those milestones as revenues for 4Q, although our diligence indicates that it is instead going to be recognized as other non-operating income with the realization of the value from the Future Contingent Milestones and Royalties account on the balance sheet in 1Q; while the milestone is being earned in 4Q when Trelegy achieved the sales threshold, notification to Theravance by Royalty Pharma occurs in 1Q. With Trelegy achieving ~$3.4B in 2024, Theravance achieved the higher $50M milestone for the year. Moreover, the company is likely to achieve the higher $100M for 2026, highlighting the value of that asset for the company. The cash from the near-term milestones represent over 1/3 of the company's enterprise value. While there is a holiday in Theravance's economics from 2027 to mid-2029, it's important to remember that the company will receive mid-single digits on Trelegy sales beginning in July 2029 initially for ex-US sales and then US sales in July 2031. Admittedly, forecasting revenues after LOE can be challenging but as a triple-combination DPI—making generic development challenging and expensive—we don't think it's unreasonable to think there may be some tail that will bring some additional cash to Theravance. Reiterate Buy rating and $15 PT."

For an analyst ratings summary and ratings history on Theravance Biopharma click here. For more ratings news on Theravance Biopharma click here.

Shares of Theravance Biopharma closed at $8.86 yesterday.

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