Theravance GlaxoSmithKline Strategic Alliance

Theravance Announces GlaxoSmithKline License of Third Respiratory Program

SOUTH SAN FRANCISCO, CA/March 21, 2005 -- Theravance, Inc. (NASDAQ: THRX) announced today that GlaxoSmithKline (GSK) has exercised its option to license Theravance's inhaled bifunctional, muscarinic antagonist/ beta2 agonist (MABA) program under the terms of their 2004 strategic alliance agreement. This program is the third respiratory program licensed by GSK from Theravance. GSK had previously licensed Theravance's long-acting beta2 agonist (LABA) program pursuant to the companies' 2002 Beyond Advair collaboration and Theravance's long-acting muscarinic antagonist (LAMA) program pursuant to the strategic alliance. Also, GSK recently informed Theravance that GSK would not exercise its option to license Theravance's short-acting, sedative-hypnotic (SASH) program. As a result, Theravance is free to pursue development of the SASH program alone or with another partner.

In consideration for the license to the MABA program, Theravance could receive up to $252 million in upfront and milestone payments, if the program has both single-agent and combination products and certain milestones are achieved, in addition to royalties on sales of any MABA products commercialized by GSK. Effective immediately, GSK will fund all future development, manufacturing and commercialization activities for product candidates in this program in accordance with the terms of the strategic alliance between Theravance and GSK. The lead compound in the program is currently in the preclinical phase."

The March 30, 2004 Strategic License Agreement pursuant to which the option was exercised is disclosed here.

Theravance's Relationship with GlaxoSmithKline (as of the 2004-12-31 10-K, filed 2005-03-29) is excerpted here.