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Theravance to split into two listed companies

(Reuters) - Biopharmaceutical company Theravance Inc said it plans to split into two publicly traded companies, one of which would independently manage the development of the respiratory drugs it is working on with GlaxoSmithKline Plc.

The split plan comes after weeks of speculation that the company could be bought by Glaxo, Theravance's largest shareholder with a stake of about 27 percent.

Theravance shares were up about 10 percent at $33.50 in after-hours trading on Thursday.

The other company to result from the split will focus on development of small-molecule compounds in rare disease areas.

Theravance Chief Executive Rick Winningham said the split would unlock potential value from two disparate sets of assets, better align employee incentives and provide a consistent return of capital to stockholders of the Glaxo partner, to be called Royalty Management Co.

The second company will be called Theravance Biopharma.

Theravance's shares rose sharply in early March after Piper Jaffray said in a research report that Glaxo could take over Theravance if U.S. health regulators ruled positively on the companies' respiratory drugs, Breo Ellipta and Anoro.

An advisory panel to the U.S. Food and Drug Administration recommended earlier this month that the agency approve Breo Ellipta to treat smoking-related lung damage.

Theravance's shares have risen more than 10 percent since then up to Thursday close of $30.92. The stock was trading at $33.50 after hours.

Theravance also reported a first-quarter net loss of $37.4 million, or 39 cents per share, compared with a profit of $84.6 million, or $1.01 per share, a year earlier.

Revenue fell by $125.8 million to $1.3 million. The steep fall in revenue reflected the scrapping in January of Theravance's global deal with Japan's Astellas Pharma Inc to develop and market its antibiotic Vibativ.

Analysts on average had expected a loss of 38 cents per share on revenue of $2.3 million, according to Thomson Reuters I/B/E/S.

(Reporting by Zeba Siddiqui in Bangalore; Editing by Don Sebastian, Maju Samuel)

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