Full Press Release Details
Innoviva Announces Proposed Offering of $200
Million of Convertible Senior Notes
BURLINGAME, Calif., March 2, 2022--(BUSINESS WIRE)--Innoviva, Inc.
(NASDAQ: INVA) (the "Company" or "Innoviva") today announced its intention to offer, subject to market conditions
and other factors, $200 million aggregate principal amount of convertible senior notes due 2028 (the "Notes") in a private
offering to qualified institutional buyers pursuant to Rule 144A under the Securities Act of 1933, as amended (the "Act").
The Company also intends to grant the initial purchasers of the Notes an option to purchase, for settlement within a period of 13 days
from, and including, the date the Notes are first issued, up to an additional $40 million aggregate principal amount of the Notes.
The terms of the Notes, including the interest rate, initial conversion
rate and other terms, will be determined upon pricing of the offering.
The Company intends to use a portion the net proceeds of the offering
to fund the cost of entering into the capped call transactions described below. In addition, the Company intends to use a portion of the
remaining net proceeds to repurchase a portion of its 2.125% Convertible Subordinated Notes due 2023 (the "2023 Notes") in
the concurrent repurchases described below and to pay fees and expenses related thereto. The Company intends to use any remaining net
proceeds for general corporate purposes.
Contemporaneously with the pricing
of the Notes, the Company expects to enter into separate and individually negotiated transactions (the "concurrent repurchases")
with certain holders of the 2023 Notes to repurchase for cash a portion of the 2023 Notes on terms to be negotiated with each holder.
Such terms will depend on several factors, including the market price of the Company's common stock and the trading price of the
2023 Notes at the time of each such concurrent repurchase. No assurance can be given as to how much, if any, of the 2023 Notes will be
repurchased or the terms on which they will be repurchased.
The Company expects that certain holders of the 2023 Notes that it
agrees to repurchase that have hedged their equity price risk with respect to such notes (the "hedged holders") will, concurrently
with or shortly after the pricing of the Notes offered hereby, unwind all or a part of their hedge positions by buying the Company's
common stock and/or entering into or unwinding various derivative transactions with respect to such common stock. The amount of the Company's
common stock to be purchased by the hedged holders may be substantial in relation to the historic average daily trading volume of the
Company's common stock. Any repurchase of the 2023 Notes and the potential related market
activities by holders of the 2023 Notes participating in the concurrent repurchases could increase (or reduce the size of any decrease
in) the market price of the Company's common stock, which may affect the trading price of the Notes at that time and the initial
conversion price of the Notes. The Company cannot predict the magnitude of such market activity or the overall effect it will have on
the price of the Notes or the Company's common stock.
In connection with the pricing of the Notes, the Company expects to
enter into privately negotiated capped call transactions with one or more of the initial purchasers and/or their respective affiliates
and/or other financial institutions (the "option counterparties"). The capped call transactions will cover, subject to customary
adjustments, the number of shares of common stock initially underlying the Notes. The capped call transactions are expected generally
to reduce potential dilution to the Company's common stock upon conversion of the Notes or at the Company's election (subject to certain
conditions) offset any cash payments the Company is required to make in excess of the aggregate principal amount of converted Notes, as
the case may be, with such reduction or offset subject to a cap.
The Company has been advised that, in connection with establishing
their initial hedges of the capped call transactions, the option counterparties or their respective affiliates expect to purchase shares
of the Company's common stock and/or enter into various derivative transactions with respect to the common stock concurrently with or
shortly after the pricing of the Notes. This activity could increase (or reduce the size of any decrease in) the market price of the common
stock or the Notes at that time. In addition, the option counterparties or their respective affiliates may modify their hedge positions
by entering into or unwinding various derivatives with respect to the common stock and/or purchasing or selling the common stock or other
securities of the Company in secondary market transactions following the pricing of the Notes and prior to the maturity of the Notes (and
are likely to do so on each exercise date of the capped call transactions and in connection with any early termination event in respect
of the capped call transactions). This activity could also cause or avoid an increase or a decrease in the market price of the common
stock or the Notes, which could affect a noteholder's ability to convert the Notes and, to the extent the activity occurs during any observation
period related to a conversion of the Notes, it could affect the number of shares and value of the consideration that a noteholder will
receive upon conversion of the Notes.
In addition, if any such capped call transaction fails to become effective,
whether or not this offering of the Notes is completed, the option counterparty party thereto may unwind its hedge positions with respect
to the common stock, which could adversely affect the value of the common stock and, if the Notes have been issued, the value of the Notes.
The Notes will be offered to qualified institutional buyers pursuant
to Rule 144A under the Act. Neither the Notes nor the shares of the Company's common stock issuable upon conversion of the
Notes, if any, have been or will be registered under the Act or the securities laws of any other jurisdiction and may not be offered or
sold in the United States absent registration or an applicable exemption from such registration requirements.
This announcement is neither an offer to sell nor a solicitation of
an offer to buy any of these securities (including the 2023 Notes), and shall not constitute an offer, solicitation, or sale in any jurisdiction
in which such offer, solicitation, or sale is unlawful.
Innoviva, Inc. (referred to as "Innoviva", the "Company",
or "we" and other similar pronouns), is a company with a portfolio of royalties that include respiratory assets partnered
with Glaxo Group Limited ("GSK"), including RELVAR /BREO ELLIPTA (fluticasone
furoate/ vilanterol, "FF/VI"), ANORO ELLIPTA (umeclidinium bromide/ vilanterol, "UMEC/VI")
and TRELEGY ELLIPTA (the combination FF/UMEC/VI). Under the Long-Acting Beta2 Agonist ("LABA")
Collaboration Agreement, Innoviva is entitled to receive royalties from GSK on sales of RELVAR /BREO
ELLIPTA and ANORO ELLIPTA . Innoviva is also entitled to 15% of royalty payments made by
GSK under its agreements originally entered into with us, and since assigned to Theravance Respiratory Company, LLC ("TRC"),
relating to TRELEGY ELLIPTA and any other product or combination of products that may be discovered and
developed in the future under the LABA Collaboration Agreement and the Strategic Alliance Agreement with GSK (referred to herein as the
"GSK Agreements"), which have been assigned to TRC other than RELVAR /BREO ELLIPTA
ANORO , RELVAR , BREO ,
TRELEGY and ELLIPTA are trademarks of the GlaxoSmithKline group of companies.
Cautionary Note on Forward-Looking Statements
To the extent that statements contained in this
press release are not descriptions of historical facts, they are forward-looking statements reflecting the current beliefs and expectations
of management made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995, as amended. Forward-looking
statements include any statements regarding Innoviva's completion of the offering, the anticipated principal amount of securities
sold, the final terms of the offering, Innoviva's anticipated use of proceeds, Innoviva's ability to repurchase
the 2023 Notes and any other statements containing the words "anticipate," "believe," "estimate,"
"expect," "intend," "may," "plan," "predict," "project," "target,"
"potential," "will," "would," "could," "should," "continue,"
and similar expressions. Such forward-looking statements involve substantial risks and uncertainties that could cause the Company's
future results, performance or achievements to differ significantly from those expressed or implied by the forward-looking statements.
The Company undertakes no obligation to update or revise any forward-looking statements. Forward-looking statements should not be relied
upon as representing the Company's views as of any date subsequent to the date hereof. For a further description of the risks and
uncertainties that could cause actual results to differ from those expressed in these forward-looking statements, as well as risks relating
to the Company's business in general, see the "Risk Factors" section of the Company's Annual Report on Form 10-K
filed with the Securities and Exchange Commission ("SEC") on February 28, 2022, which is on file with the SEC and available
on the SEC's website at www.sec.gov. In addition to the risks described above and in Innoviva's other filings
with the SEC, other unknown or unpredictable factors also could affect Innoviva's results. Past performance is not necessarily
indicative of future results. No forward-looking statements can be guaranteed and actual results may differ materially from such statements.
Given these uncertainties, you should not place undue reliance on these forward-looking statements. The information in this press release
is provided only as of the date hereof, and Innoviva assumes no obligation to update its forward-looking statements on account of new
information, future events or otherwise, except as required by law.
Trademark reference: Innoviva and the Innoviva logo are registered
trademarks or trademarks of Innoviva, Inc. or its affiliates in the United States and/or other countries. All other trademarks referenced
herein are the property of their respective owners.