Vancouver-based biotechnology company Zymeworks Inc. (Nasdaq: ZYME) has released updated financial guidance for 2026 and finalized transaction details following the completion of its acquisition of Theravance Biopharma.
The deal brings the respiratory drug YUPELRI (revefenacin) into Zymeworks’ portfolio. Through Theravance Biopharma’s existing collaboration with Viatris, Zymeworks is now entitled to a 35% share of net U.S. profits from YUPELRI, along with royalties on sales outside the United States. In the first half of 2026, total YUPELRI sales reached $133.1 million, generating collaboration revenue of $38.4 million for Theravance Biopharma.
Executives Frame the Strategic Rationale
Scott Platshon, Chief Business Officer at Zymeworks, said the company is positioned to extract value from the acquisition using its existing research and operational infrastructure, including access to acquired Irish tax attributes alongside its ongoing research activities in Ireland. He said this is an opportunity not typically available to buyers focused purely on royalty income.
Kenneth Galbraith, Chair and Chief Executive Officer of Zymeworks, welcomed new additions to the leadership team, saying their experience and capabilities would support the company’s long-term strategic goals.
Leadership Changes and Commercial Plans
Zymeworks intends to keep the current commercial team responsible for YUPELRI’s hospital-channel sales, citing the team’s established relationships and capabilities. The company also plans to hire an experienced pharmaceutical executive to lead commercial operations for the newly acquired business.
As part of the integration, Stuart Knight will join Zymeworks as Executive Vice President and Chief Information Officer, overseeing the company’s technology strategy, including its artificial intelligence, machine learning and data science initiatives. Jesse Fecker will join as Vice President of Intellectual Property.
Zymeworks also retains ownership of Theravance Biopharma’s research and development assets, which it says will be assessed alongside its broader pipeline and capital allocation priorities. The company indicated it may pursue partnerships, collaborations, or other structures — including externalizing select programs — to maximize value from the combined research portfolio.
Financial Terms and Outlook
Under the merger agreement first announced June 29, 2026, Theravance Biopharma shareholders received $17.00 in cash per share at closing. The acquisition was financed through a $350 million non-dilutive, non-recourse note provided by OMERS.
Zymeworks said the deal carries a base-case internal rate of return in the mid-teens, driven mainly by growth in YUPELRI revenue with a smaller contribution from VIBATIV. The company noted this projection does not include potential additional upside from Irish tax attributes or future research and business development activity. YUPELRI hospital sales grew 25% in the second quarter of 2026, which the company said supports margin expansion.
Zymeworks estimated acquisition and restructuring-related costs, excluding capitalized expenses tied to the OMERS financing, at approximately $25 million to $30 million. The company also pointed to $2.5 billion in acquired Irish tax attributes, though no value has been assigned to these attributes in the transaction valuation or the base-case return estimate. Separately, Zymeworks flagged a potential $100 million milestone payment tied to TRELEGY ELLIPTA, expected in the first quarter of 2027 if conditions are met, which would offset the cash cost of the purchase.
Key Figures in the Theravance Biopharma Acquisition
Zymeworks said it expects total 2026 revenue, including collaboration revenue from YUPELRI, of between $278 million and $292 million, with adjusted EBITDA for the year between $114 million and $128 million. The company held a conference call with management on the day of the announcement to discuss the updated guidance.
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