Theravance's (NAS: THRX) investors are breathing easy. Shares jumped 11% yesterday, and they're up another 8% today. All because a few phase 3 programs read out positive.

And by a few, I mean four.

One phase 3 trial success is a good indicator that a drug will pass another and get approved. Four is rightfully boosting investors' confidence.


The clinical trials were studying a long-acting muscarinic antagonist, or LAMA, and long-acting beta2 agonist, or LABA, combination in chronic obstructive pulmonary disease, a lung disease. Theravance is studying the LAMA, umeclidinium bromide, and the LABA, vilanterol, with its longtime partner GlaxoSmithKline (NYS: GSK) .

Two of the trials compared the drugs with placebo for 24 weeks. In both the high-dose trial and the low-dose trial, the drug combo performed much better than placebo. The individual components by themselves also beat placebo, and the combo beat the individual components by themselves. That's exactly what you'd like to see, although there actually wasn't much to see; the company's just said the drugs worked, but it didn't provide any details beyond very low p-values that show statistical significance since they're saving the data for an upcoming medical meeting.

The companies also measured their combination to an active comparator, Pfizer (NYS: PFE) and Boehringer Ingelheim's COPD treatment Spiriva. When vilanterol was taken with Spiriva, Theravance/Glaxo's combo was superior at two different doses. In another trial, the Theravance/Glaxo combo at the higher dose beat Spiriva alone, but the lower dose was only numerically different and not statistically significant.

All told, the data looks really good, but investors should keep an eye out for the 52-week data due out shortly. If anything is going to trip up the program, it'll be safety data, which is more likely to show up in the longer trial. Remember, Bristol-Myers Squibb (NYS: BMY) and AstraZeneca (NYS: AZN) ran 19 trials -- not all phase 3, obviously -- to get their diabetes drug dapagliflozin approved, but the FDA turned it down because of potential side effects.

Four isn't necessarily going to be enough.

While you're waiting for the 52-week data, take a look at what Fool analysts believe is the next rule-breaking multibagger. Get the free report.

At the time this article was published Fool contributor Brian Orelli holds no position in any company mentioned. Check out his holdings and a short bio. Motley Fool newsletter services have recommended buying shares of Pfizer. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. Try any of our Foolish newsletter services free for 30 days. The Motley Fool has a disclosure policy.

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