SOUTH SAN FRANCISCO, Calif. (AP) -- GlaxoSmithKline PLC and Theravance Inc. said Monday that they reached a deal for the British drug maker to invest $212.9 million and boost its stake in biopharmaceutical company.
The news sent shares of South San Francisco, Calif.-based Theravance up $3.50, or 18 percent, to $23 in heavy afternoon trading, after peaking at $23.93 earlier in the day.
Under the deal, GlaxoSmithKline will buy 10 million newly issued shares of common stock at $21.29 per share. The price represents 9.2 percent premium over the stock's Friday closing price of $19.50.
After the purchase, GlaxoSmithKline will own 25.8 million shares, boosting its stake in the company to about 26.8 percent from its previous 18.3 percent.
The deal is subject to Theravance shareholder and antitrust approvals.
Theravance is developing the lung disease and asthma drug Relovair through a partnership with GlaxoSmithKline. The companies are also working on other experimental lung drugs together.