Theravance Inc.’s (THRX) fourth quarter 2012 loss of 33 cents per share was narrower than the Zacks Consensus loss estimate of 43 cents and the year-ago loss of 45 cents. The narrower loss during the reported quarter was primarily due to higher revenues and lower operating expenses. Revenues also increased 8.2% from the year-ago period.

Full year loss of 20 cents was also narrower than the Zacks Consensus Estimate of a loss of 29 cents per share and the year-ago loss of $1.41 per share. Full year revenues were $135.8 million compared with $24.5 million in 2011. Theravance’s full year revenues were ahead of the Zacks Consensus Estimate of $133 million.

Quarter in Detail

Revenues were up 8.2% year over year to $5.8 million in the fourth quarter of 2012, slightly above the Zacks Consensus Estimate of $5 million. Revenues benefited from the recognition of a part of the license fees from Theravance’s collaboration with Merck & Co. Inc. (MRK) which was partially offset by decrease of royalty revenue from sales of Vibativ.

In Oct 2012, Theravance inked a deal with Merck for the discovery, development and commercialization of novel small molecule therapeutics for treating hypertension and heart failure.

In Nov 2012, Theravance announced that it received a favorable outcome from the US Food and Drug Administration’s Anti-Infective Drugs Advisory Committee meeting on Vibativ’s New Drug Application (:NDA) for the treatment of nosocomial pneumonia (NP). Theravance is also working on the re-establishment of a consistent supply of the product.

Research & development (R&D) expenses were down 13.4% to $28.1 million in the fourth quarter of 2012. The decline in R&D expenses was primarily attributable to the completion of the phase IIb study on TD-1211 (for the treatment of chronic, non-cancer pain patients with opioid-induced constipation). General & administrative (G&A) expenses for the reported quarter declined 9.8% to $7.7 million.

Pipeline Update

In Sep 2012 Theravance along with its partner GlaxoSmithKline plc (GSK) announced that the US Food and Drug Administration (:FDA) accepted the New Drug Application (:NDA) for Relvar/Breo (fluticasone furoate and vilanterol). A final decision from the US regulatory body is expected by May 12, this year.

The companies are looking to get the candidates approved for the treatment of patients suffering from chronic obstructive pulmonary disease (:COPD). Glaxo also submitted applications for the approval of Relvar/Breo in the EU and Japan.

The companies are also looking for regulatory approval for another COPD candidate Anoro (umeclidinium bromide/vilanterol). Glaxo has already submitted regulatory applications in the US and EU, and expects to submit the same worldwide in 2013.