Zymeworks Acquisition Closes, Outlook Raised

Zymeworks said on Monday that it has completed its acquisition of Theravance Biopharma, adding the marketed lung drug YUPELRI to its portfolio, and raised its full-year financial guidance for 2026. The Vancouver-based biotechnology company announced the closing in a press release issued on September 28, alongside fresh numbers that show how the deal changes its finances.

Zymeworks began as a research-driven company, known for its work on bispecific antibodies for cancer. The Zymeworks acquisition shifts its balance: the company now pairs that laboratory engine with commercial products already generating sales. Management argues that steady cash flow will let it fund research without leaning on investors for new equity.

The deal behind the announcement

Theravance Biopharma shareholders received seventeen dollars in cash at closing for each share, under the merger agreement the two companies announced on June 29. With the transaction complete, Theravance stock no longer trades on the Nasdaq Global Select Market.

The asset that matters most in the deal is YUPELRI, a once-daily inhaled treatment for chronic obstructive pulmonary disease, or COPD. Theravance's collaboration with Viatris entitles the combined company to thirty-five percent of net U.S. profits from the drug, plus royalties on sales outside the United States. YUPELRI sales totaled $133.1 million in the first half of 2026, producing $38.4 million in collaboration revenue, according to the announcement.

The purchase was financed without issuing new shares. Zymeworks borrowed three hundred and fifty million dollars through a non-dilutive, non-recourse note from OMERS Life Sciences, assigning roughly seventy-five percent of the YUPELRI profit-share cash flow to OMERS to service the debt. The rest of the price came from about 217.5 million dollars of Zymeworks' own cash, after counting the cash it acquired from Theravance.

A further payment could reduce the cash outlay. Zymeworks expects a one-hundred-million-dollar milestone tied to global sales of TRELEGY ELLIPTA in the first quarter of 2027, if the sales target is met, the company said. The deal values Theravance's equity at about $929 million, with former shareholders also receiving a contingent value right tied to any future monetization of the drug candidate ampreloxetine, allsci.com reported.

What the updated 2026 outlook says

The guidance reset follows two events: the Theravance closing and the August 25 approval by the U.S. Food and Drug Administration of Ziihera, Zymeworks' HER2-targeted bispecific antibody for first-line treatment of advanced gastroesophageal adenocarcinoma. The company now expects total 2026 revenue, including YUPELRI collaboration revenue, of $278 million to $292 million, with adjusted EBITDA of $114 million to $128 million, excluding any future transactions.

Chief Financial Officer Kristin Stafford said in a statement that the company accessed six hundred million dollars of non-dilutive financing during 2026 in the form of non-recourse notes at an attractive cost of capital, with the proceeds funding both the acquisition and continued share repurchases. She said the financing strategy and the repurchase program are designed to limit dilution for existing shareholders.

The board authorized the 2026 buyback in May, allowing repurchases of up to one hundred and twenty-five million dollars of common stock. As of September 28, Zymeworks had used about $49.3 million of that authorization to buy nearly two million shares at an average price of twenty-five dollars and four cents. Since it began repurchasing shares in August 2024, the company has spent $211.6 million to buy back more than ten and a half million shares at an average of twenty dollars and two cents. Stafford said the company's last public equity offering was in January 2022 and that it currently has no plans for another.

Why the deal matters

The company expects the Zymeworks acquisition to produce a mid-teens internal rate of return in its base case, driven mainly by YUPELRI revenue growth and a smaller contribution from VIBATIV. Hospital sales of YUPELRI rose twenty-five percent in the second quarter of 2026, and the company plans to retain the commercial team that promotes the drug through hospitals, which are facing their own cost pressures from AI billing tools that have added hundreds of millions in costs. It also intends to hire a senior pharmaceutical executive to lead commercial operations for the combined business.

The deal also delivers roughly $2.5 billion in Irish tax attributes, which could add flexibility around future Irish revenues and intellectual-property structuring, according to the company. Zymeworks assigned no value to those attributes in its valuation of the transaction, meaning any benefit from them would be upside beyond the base case. Theravance's Stuart Knight will join Zymeworks as executive vice president and chief information officer to guide the company's technology strategy, including its AI and machine learning investments — the same enterprise AI landscape where companies are scrambling to inventory the agents they deploy.

The move fits a pattern in biotech, where research-focused companies buy marketed products to bankroll their pipelines. For Zymeworks, the math is that commercial cash flow plus disciplined buybacks can keep the company funded without returning to the equity markets. The company will reflect the acquisition in its quarterly filing for the period ending September 30, 2026, expected in November, and held a conference call with investors at 8:30 a.m. Eastern Time on Monday. The full announcement is available here.