CVR Structure Sharing Ampreloxetine Value: Cash Flow Linked for 10 Years Post-Acquisition

Zymeworks Inc. (NASDAQ: ZYME) has filed a form of Contingent Value Rights (CVR) agreement in connection with its proposed acquisition of Theravance Biopharma Inc. (NASDAQ: TBPH), under which potential future cash flows from an ampreloxetine-based therapy would be distributed to Theravance shareholders. Each CVR will be issued in a one-to-one ratio with Theravance common shares and certain equity awards. The CVR structure provides for: • 80% of net license revenues from any license or sale of the product within ten years
• A $50 million milestone payment (approximately KRW 70 billion) upon the product’s first commercial launch in major markets
• A 10% royalty on net product sales, to be allocated pro rata once specified conditions are met

The agreement specifies definitions of net sales and allowable deductions, payment timing, tax treatment, and the rights agent’s authority. It clarifies that Zymeworks has no obligation to develop, license, or commercialize the CVR-eligible products, that CVR payments are not guaranteed, and that CVRs do not confer any equity, voting, or dividend rights in Zymeworks.

On the same day, Zymeworks announced it has entered into a definitive agreement to acquire Theravance for $17.00 per share in cash plus the CVRs, representing a total transaction value of approximately $929 million (about KRW 1.3 trillion). The deal is expected to close in the second half of 2026, subject to shareholder approval and customary regulatory clearances. By securing the cash flows associated with its COPD maintenance therapy YUPELRI, Zymeworks aims to expand its revenue base from commercial respiratory products alongside its proprietary antibody pipeline. (Source: prnewswire.com)

Zymeworks, based in Vancouver, Canada, is a Nasdaq-listed biotech company developing multifunctional antibody-based biologics—including antibody-drug conjugates and bispecific antibodies—with a pipeline targeting oncology, inflammation, and autoimmune diseases. (Source: ir.zymeworks.com) In the global biopharma industry, CVR structures are increasingly used in M&A to share potential upside on assets with high clinical or commercial uncertainty.