Zymeworks Expects Revenue of Up to $292 Million in 2026 After Theravance Acquisition
Key Facts
Zymeworks completed its acquisition of Theravance Biopharma on September 23, 2026, making Theravance a wholly owned subsidiary, according to a company filing with the U.S. Securities and Exchange Commission. Five days later, Zymeworks updated its financial guidance for the year, estimating total revenue of $278 million to $292 million. It also forecast adjusted earnings before interest, taxes, depreciation and amortization of $114 million to $128 million. The company said the guidance excludes the impact of any future deals. The figures combine the full-year outlook with contributions from the acquired assets, while the company did not provide a comparison with analyst consensus in its statement.
Theravance shareholders received $17 in cash for each share upon completion of the deal. Zymeworks said the financing included a $350 million non-recourse note from OMERS Life Sciences. Under the arrangement, 75% of cash flows from the YUPELRI profit share was allocated to service the note until it is repaid. Zymeworks also used about $217.5 million of its existing cash resources, after accounting for cash acquired from Theravance. OMERS financing and Zymeworks' available cash together covered the remainder of the purchase price.
The profit share is tied to YUPELRI's performance: under the agreement, Zymeworks is entitled to 35% of the drug's U.S. net profits, in addition to royalties on sales outside the United States. The drug generated gross sales of $133.1 million in the first half of 2026. Those sales resulted in collaboration revenue of $38.4 million recorded by Theravance over the same period. Zymeworks said hospital sales of YUPELRI grew 25% in the second quarter of 2026. These figures provide context for the post-acquisition revenue outlook, while most of the cash flows from the profit share go toward servicing the OMERS note.
The company estimated acquisition and restructuring costs related to the deal at about $25 million to $30 million, excluding capitalized costs attributed to OMERS financing. It also said the deal includes Irish tax assets worth $2.5 billion, which could provide additional flexibility to benefit from future revenue in Ireland. The company assigned no value to these assets in its transaction valuation or base-case return estimate. Zymeworks estimated the deal's base-case internal rate of return in the mid-teens, based mainly on growth in YUPELRI revenue and a smaller contribution from VIBATIV. The return estimate did not include potential value from the tax assets or research and development and business development opportunities.
On share repurchases, Zymeworks said its board authorized a program in May 2026 allowing it to buy back up to $125 million of its outstanding shares. Through September 28, the company had used about $49.3 million of the program to buy 1,971,454 shares at an average price of $25.04 per share. Since the repurchase program began in August 2024, the company had used a total of $211.6 million to buy 10,571,316 shares at an average price of $20.02 per share. The company had about 71.2 million shares outstanding on September 14, 2026. These figures show the scale and duration of the buybacks, without the company linking them in its statement to the stock's reaction to the guidance announcement.
Potential cash flows tied to Theravance's assets include a conditional $100 million payment from TRELEGY ELLIPTA, which the company expects to collect in the first quarter of 2027 if the payment conditions are met. The company describes it as a potential payment, not confirmed revenue. In October, Zymeworks announced a global licensing and collaboration agreement with Roche to develop ZW209. The agreement includes an upfront payment of $55 million, a $40 million payment upon initiation of a Phase 1b trial, and development and commercial milestone payments tied to sales that could total up to $718 million. These amounts remain subject to the agreement's terms and specified events, and the 2026 financial guidance excludes the impact of any future deals.
Zymeworks said the preliminary accounting treatment for the deal will appear in its consolidated financial statements in the quarterly report for the period ended September 30, 2026, which is expected to be filed in November. It also announced that it will release third-quarter results after the market closes on November 9, 2026. According to the announcement, the company does not plan to hold a conference call or webcast to discuss the results. The forthcoming report will therefore be one of the next occasions on which the company presents the acquisition's impact on its consolidated statements. EL7 published coverage of the deal's completion on September 24, 2026.