The terms, per the Form 8-K Zymeworks Inc. filed on June 29, 2026: each Theravance Biopharma ordinary share is converted into $17.00 in cash plus one contingent value right. The agreement, dated June 28, 2026 and disclosed under Items 1.01, 7.01 and 9.01, sets up a reverse triangular merger in which Zymeworks Merger Sub 1, a wholly owned Cayman Islands subsidiary of Zymeworks, merges with and into Theravance Biopharma, with Theravance surviving as a wholly owned subsidiary of Zymeworks. Read the exhibit, not the headline number, and the structure is a cash deal with a contingent tail bolted onto one asset.

Start with the parties, because the mechanics turn on them. Zymeworks Inc., a Delaware corporation, is the acquirer and is labeled "Parent" throughout the Merger Agreement. Merger Sub 1 is the disposable acquisition vehicle — an exempted Cayman company formed to be merged out of existence. Theravance Biopharma, Inc., itself a Cayman exempted company, is the target. At the effective time, every outstanding ordinary share (other than treasury shares and shares held by the parties' subsidiaries, plus dissenting shares) is canceled and swapped for the Per Share Merger Consideration: the $17.00 Per Share Cash Consideration and one CVR. The 8-K is signed by Kenneth Galbraith, Zymeworks' Chair, President and Chief Executive Officer.

What the CVR actually pays, and when

The cash number is the part holders can bank; the CVR is the part that may never pay. Per the filing, each CVR is a non-tradeable contractual right tied entirely to ampreloxetine. It carries three possible payments: a pro rata share of 80% of the net License Proceeds Zymeworks or its affiliates receive from any license, divestiture or other monetization of ampreloxetine executed within ten years of closing; a pro rata share of a $50 million First Commercial Sale Milestone Payment upon the first commercial sale of ampreloxetine in the U.S., UK, Spain, France, Germany or Italy on or before that ten-year date; and a pro rata share of 10% of net sales as royalties, running country by country from first commercial sale until the later of the tenth anniversary, patent expiration or loss of exclusivity. The filing is blunt about the contingency:

The CVRs are contractual rights only and are not transferable except under certain limited circumstances, will not be evidenced by a certificate or other instrument and will not be registered with the SEC or listed for trading.— Zymeworks Inc., Form 8-K (SEC), source

That structure matters for how to read the deal. The disclosed cash figure — $17.00 per share — is the certain consideration; the CVR value is undetermined and, per the 8-K's own cautionary language, may never be paid at all. Zymeworks writes that there can be no assurance a monetization transaction will be executed, that the milestone will occur, or that any License Proceeds or royalties will become payable. For a deal desk, the takeaway is to treat the CVR as optionality on a single program rather than as headline value, and to price the transaction off the cash leg the seller's shareholders receive at closing.

Financing, break fees and the closing path

Zymeworks says it expects to fund the acquisition with a combination of cash on hand and new debt. Concurrently with signing, it entered a debt commitment letter dated June 28, 2026 with OCM IP Healthcare Portfolio LP — identified in the filing as OMERS Life Sciences — under which the lender agreed to purchase senior secured notes to be issued by newly formed special purpose vehicles in an aggregate principal amount of up to $350,000,000, subject to customary conditions. That is the disclosed outer bound of the debt piece; the balance of the purchase price comes off the balance sheet.

The break-fee architecture is symmetrical. If the Merger Agreement is terminated in specified circumstances — including Theravance accepting a Superior Proposal or its board effecting a Change of Recommendation before the shareholder vote — Theravance owes Zymeworks a termination fee of $32,515,000. Zymeworks owes Theravance a reverse termination fee of the same $32,515,000 if the deal fails in certain circumstances tied to antitrust clearance not being obtained. The agreement also carries customary non-solicitation covenants with a fiduciary-out exception that lets Theravance's board respond to an unsolicited proposal its Strategic Review Committee determines could constitute a Superior Proposal.

Closing conditions are the usual set for a take-private of this size: expiration or termination of the waiting period under the Hart-Scott-Rodino Act, the absence of a continuing material adverse effect at Theravance, no legal restraints, and shareholder approval. The vote threshold is notable — Theravance shareholders representing at least two-thirds of the ordinary shares present and voting at an extraordinary general meeting must approve, a higher bar than the simple majority common in Delaware deals and a function of the target's Cayman incorporation. The parties set an End Date of December 28, 2026, automatically extendable for two three-month periods if the only open items relate to HSR clearance, and say they expect to close in the second half of 2026.

The equity awards and the disclosure timeline

Equity holders are cashed out on the same terms as shareholders, with a CVR attached to each underlying share. Per the 8-K, each vested or unvested Company Option is canceled for the spread between the $17.00 cash consideration and its exercise price, multiplied by the underlying shares, plus one CVR per underlying share; options struck at or above $17.00 are canceled for no consideration. Restricted stock units and performance stock units are similarly converted into cash plus one CVR per underlying share. The company also agreed to wind down its employee stock purchase plan ahead of closing. These are the standard equity mechanics of a cash merger, and they confirm the deal is structured as a clean cash-out rather than a stock exchange.

On the disclosure choreography: the Merger Agreement was signed June 28, 2026; Zymeworks announced it via press release on June 29 and furnished an investor presentation the same day under Item 7.01, which — as the filing notes — is furnished rather than filed and so is not subject to Section 18 liability. The Merger Agreement itself is attached as Exhibit 2.1 with schedules omitted under Item 601(b)(2), and the form of CVR Agreement is Exhibit 10.1. The forward-looking-statements section references several disclosed assets around the transaction — YUPELRI, the Trelegy royalty interests, and zanidatamab among them — as items whose future economics management flags as uncertain. None of that changes the core of what the 8-K discloses: a cash acquisition at $17.00 per share, a single-asset CVR that may pay nothing, up to $350 million of committed debt, and matching $32.515 million break fees on both sides. Announced, not closed — the filing is careful to say the transaction remains subject to the shareholder vote, antitrust clearance and the other conditions before any of it becomes final.