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THERAVANCE, INC.

901 GATEWAY BLVD.

SOUTH SAN FRANCISCO, CA 94080

(650) 808-6000

  November 5, 2010

Via
Edgar

Securities
and Exchange Commission

Division
of Corporation Finance

100
F Street, N.E.

Washington,
D.C. 20549

Attention:                          Jeffrey P.
Riedler

Michael Rosenthall

Re:               October 25,
2010 Supplemental Staff Comment Letter Concerning Theravance, Inc. Form 10-K
for the Fiscal Year ended December 31, 2009 filed February 26, 2010
and Definitive Proxy Statement on Schedule 14A filed March 24, 2010 File No. 000-30319

Dear Messrs. Riedler and Rosenthal:

This
letter responds to the further comment of the staff (the “Staff”) of
the Securities and Exchange Commission (the “Commission”) to the filing of the
above-referenced annual report (the “2009 10-K”) and proxy statement (the “2010
Proxy”, and together with the 2009 10-K, the “Filings”), which were the subject of
your supplemental letter dated October 25, 2010 (the “Comment Letter”).

In
this letter, we have reproduced your comment in italicized print and have
followed the comment with our response.
References in this letter to “we,” “our” or “us” mean Theravance, Inc.

Definitive Proxy Statement on
Schedule 14A

Annual Incentive Compensation, page 35

1.                                      We note
your response to our prior comment 4.
Notwithstanding your disclosure in general terms of your named executive
officers’ performance goals for the 2009 bonus program, however, a more
specific description of each of the goals and the extent of actual achievement
of these objectives is necessary for investors to judge for themselves whether
bonus awards were reasonably tied to performance.  Therefore, please confirm that you will
include in next year’s CD&A disclosure and thereafter:

·                  Each of
the specific binary performance goals that was set for use in determining the
officer’s performance, disclosed with sufficient detail that investors
understand  what was required for the
officer to earn his or her bonus;

·                  The
weighting assigned to each of those goals, if the goals did not apply equally;
and

·                  Whether
each of the goals was achieved or not achieved, such that a reader can
understand how the aggregate level of achievement for each officer was
computed.

RESPONSE TO COMMENT 1:  We agree to provide additional disclosure in
the CD&A of our 2011 Proxy Statement and thereafter concerning the
following:

·                  Each of the
specific binary performance goals that was set for use in determining the
officer’s performance, disclosed with sufficient detail that investors
understand what was required for the officer to earn his or her bonus;

·                  Whether each of
the goals was achieved or not achieved, such that a reader can understand how
the aggregate level of achievement for each officer was computed.

However,
we continue to object to the Staff’s request that we disclose the weighting
assigned to each of the goals for the following reasons:

1.                                      We do not
believe the individual weighting assigned to each goal to be material to an
investor’s understanding of our bonus program, in which case disclosure is not
required by Item 402(b) of Regulation S-K.

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2.                                      An important
aspect of our business strategy is to partner with global pharmaceutical
companies to accelerate the development and commercialization of our product
candidates at the strategically appropriate time.  Many of our goals relate to programs that
have been or will be partnered with another company.  Requiring us to disclose the specific
percentage weighting for each goal risks sending to our partners the wrong
message about a program (e.g., a partner could view a high weighting on its
program as a reason to give it leverage in the normal, day-to-day issues that
surface between corporate partners; similarly, a partner could view a low
weighting on its program as a question about our commitment to the program and
create unnecessary conflict or tension between us and a partner).  Such disclosure also  risks putting an as-yet un-partnered program
at a competitive disadvantage (e.g., a potential partner could use our
weighting against us, either extracting more favorable terms from us or
insisting on terms that it might not otherwise attempt to impose).

3.                                      In addition,
when assessing our disclosure it is important to note that we are a small
company (less than 200 full-time employees) and the operating goals used in the
cash bonus plan at our company apply to all employees equally, not just the
officers.  Historically, the percentage
weightings assigned to the goals for purposes of the plan was information that
has been kept confidential from all employees other than the senior
officers.  The reason for this
confidentiality is because we believe it would be highly de-motivating for our
general employee population to know the specific percentage weightings, since a
low relative weighting on a goal attached to a program on which particular
employees were spending a lot of their effort could adversely impact their
individual morale and cause conflicts among our employees.

As
noted above, in response to the Staff’s comments we have agreed to disclose
each of the specific binary performance goals that was established for use in
determining officer performance and whether each of the goals was achieved or
not achieved.  Further, we will also
agree to include disclosure about the aggregate weightings achieved, as we did
in our 2010 Proxy Statement.  We
respectfully submit that in light of the reasons set forth above, this level of
disclosure properly balances the internal needs of the Company with investors’
need to be able to assess whether bonus awards were reasonably tied to
performance.

We
acknowledge that:

·                  we are
responsible for the adequacy and accuracy of the disclosure in the Filings;

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·                  Staff comments
or changes to disclosure in response to Staff comments do not foreclose the
Commission from taking any action with respect to the Filings; and

·                  we may not
assert Staff comments as a defense in any proceeding initiated by the
Commission or any person under the federal securities laws of the United
States.

Please
do not hesitate to contact me at (650) 808-6171 or Heather M. Shane, our
Assistant General Counsel, at (650) 808-4078 if you have any questions or would
like additional information regarding this matter.

  Very
  truly yours,

  /s/
  Bradford J. Shafer

  Bradford
  J. Shafer

  Senior
  Vice President and General Counsel

  cc:

  Rick
  E Winningham

  William
  D. Young

  Heather
  M. Shane, Esq.

  Elizabeth
  Webb, Esq.

  David
  T. Young, Esq.

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