Full Press Release Details
Reports First Quarter 2020 Financial Results
BURLINGAME, Calif., April 29, 2020 -
Innoviva, Inc. (NASDAQ: INVA) ("Innoviva", or the "Company") today reported financial results
for the first quarter ended March 31, 2020.
net sales of RELVAR /BREO
31% versus the first quarter of 2019. U.S. net sales increased by 47% as increased pricing discounts in the ICS/LABA sector were
offset by a one-time significant positive prior period rebate adjustment and continued volume growth. Non-U.S. sales increased
23% versus the first quarter of 2019, driven by sales growth in certain European markets and in Japan. ANORO ELLIPTA
global net sales increased 15% in the first quarter of 2020. U.S. net sales increased 8% as volume growth offset price pressure
from increased amounts of sales through market segments with higher rebates. Non-U.S. ANORO ELLIPTA
net sales grew 24% year over year in the quarter supported by growth in certain European markets. In addition, TRELEGY
ELLIPTA global net sales were $248.2 million," stated Geoffrey Hulme, Interim Principal Executive Officer.
continued, "At this point, the impact of the COVID-19 pandemic on the global sales of our three collaboration products is
uncertain. Based on our end-market observations, first quarter sales levels may have benefited from unspecified levels of increased
patient inventory stocking. Also, the significant RELVAR /BREO
prior period rebate adjustment that occurred during the first quarter is not likely to recur in future quarters."
Hulme concluded, "After the end of the quarter, we were
pleased to announce the first closing of a new investment in Entasis Therapeutics, a company focused on the development of novel
antibiotics to address multi-drug resistant gram-negative bacteria. Antibiotic-resistant bacterial infections pose an increasing
global health risk and are creating a growing need for new treatment options. Innoviva's investment will help Entasis continue
to develop two antibiotics currently in phase three trials. The Armata and Entasis transactions are part of our ongoing efforts
to pursue capital allocation options that maximize future shareholder value."
ELLIPTA , Innoviva is entitled to 15% of royalty payments made by GSK that are assigned to TRC, LLC.
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
BREO , TRELEGY and ELLIPTA are trademarks of the GlaxoSmithKline group of companies.
Forward Looking Statements
This press release contains certain "forward-looking"
statements as that term is defined in the Private Securities Litigation Reform Act of 1995 regarding, among other things, statements
relating to goals, plans, objectives and future events. Innoviva intends such forward-looking statements to be covered by the safe
harbor provisions for forward-looking statements contained in Section 21E of the Securities Exchange Act of 1934 and the Private
Securities Litigation Reform Act of 1995. The words "anticipate", "expect", "goal", "intend",
"objective", "opportunity", "plan", "potential", "target" and similar
expressions are intended to identify such forward-looking statements. Such forward-looking statements involve substantial risks,
uncertainties and assumptions. These statements are based on the current estimates and assumptions of the management of Innoviva
as of the date of this press release and are subject to known and unknown risks, uncertainties, changes in circumstances, assumptions
and other factors that may cause the actual results of Innoviva to be materially different from those reflected in the forward-looking
statements. Important factors that could cause actual results to differ materially from those indicated by such forward-looking
statements include, among others, risks related to: expected cost savings; lower than expected future royalty revenue from respiratory
products partnered with GSK; the commercialization of RELVAR /BREO ELLIPTA , ANORO
ELLIPTA and TRELEGY ELLIPTA in the jurisdictions in which these products have been
approved; the impact of the COVID-19 pandemic; the strategies, plans and objectives of Innoviva (including Innoviva's
growth strategy and corporate development initiatives beyond the existing respiratory portfolio); the timing, manner, and amount
of potential capital returns to shareholders; the status and timing of clinical studies, data analysis and communication of results;
the potential benefits and mechanisms of action of product candidates; expectations for product candidates through development
and commercialization; the timing of regulatory approval of product candidates; and projections of revenue, expenses and other
financial items. Other risks affecting Innoviva are described under the headings "Risk Factors" and "Management's
Discussion and Analysis of Financial Condition and Results of Operations" contained in Innoviva's Annual Report on
Form 10-K for the year ended December 31, 2019, which is on file with the Securities and Exchange Commission ("SEC")
and available on the SEC's website at www.sec.gov. 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.
| INNOVIVA, INC. | ||||||||
| Condensed Consolidated Statements of Income | ||||||||
| (in thousands, except per share data) | ||||||||
| (Unaudited) | ||||||||
| Three Months Ended | ||||||||
| March 31, | ||||||||
| 2020 | 2019 | |||||||
| Revenue: | ||||||||
| Royalty revenue from a related party, net (1) | $ | 78,678 | $ | 55,183 | ||||
| Operating expenses: | ||||||||
| General and administrative | 2,563 | 3,015 | ||||||
| Total operating expenses | 2,563 | 3,015 | ||||||
| Income from operations | 76,115 | 52,168 | ||||||
| Other income, net | 68 | 1 | ||||||
| Interest income | 1,302 | 975 | ||||||
| Interest expense | (4,516 | ) | (4,617 | ) | ||||
| Changes in fair values of equity investments | 21,915 | - | ||||||
| Income before income taxes | 94,884 | 48,527 | ||||||
| Income tax expense, net | 15,932 | 8,508 | ||||||
| Net income | 78,952 | 40,019 | ||||||
| Net income attributable to noncontrolling interest | 13,515 | 6,229 | ||||||
| Net income attributable to Innoviva stockholders | $ | 65,437 | $ | 33,790 | ||||
| Basic net income per share attributable to Innoviva stockholders | $ | 0.65 | $ | 0.33 | ||||
| Diluted net income per share attributable to Innoviva stockholders | $ | 0.59 | $ | 0.31 | ||||
| Shares used to compute basic net income per share | 101,235 | 101,059 | ||||||
| Shares used to compute diluted net income per share | 113,509 | 113,376 |
(1) Total net revenue from a related party is comprised of the following (in thousands):
| Three Months Ended | ||||||||
| March 31, | ||||||||
| 2020 | 2019 | |||||||
| (unaudited) | ||||||||
| Royalties from a related party | $ | 82,134 | $ | 58,639 | ||||
| Amortization of capitalized fees paid to a related party | (3,456 | ) | (3,456 | ) | ||||
| Royalty revenue from a related party, net | $ | 78,678 | $ | 55,183 |
| INNOVIVA, INC. | ||||||||
| Condensed Consolidated Balance Sheets | ||||||||
| (in thousands) | ||||||||
| March 31, | December 31, | |||||||
| 2020 | 2019 | |||||||
| (unaudited) | (1) | |||||||
| Assets | ||||||||
| Cash, cash equivalents and marketable securities | $ | 383,951 | $ | 350,845 | ||||
| Other current assets | 82,956 | 80,389 | ||||||
| Property and equipment, net | 42 | 33 | ||||||
| Equity investments | 46,915 | - | ||||||
| Capitalized fees paid to a related party, net | 135,620 | 139,076 | ||||||
| Deferred tax assets, net | 138,239 | 154,171 | ||||||
| Other assets | 288 | 312 | ||||||
| Total assets | $ | 788,011 | $ | 724,826 | ||||
| Liabilities and stockholders' equity | ||||||||
| Other current liabilities | $ | 1,130 | $ | 1,219 | ||||
| Accrued interest payable | 1,668 | 4,152 | ||||||
| Convertible subordinated notes, net | 239,355 | 239,217 | ||||||
| Convertible senior notes, net | 139,797 | 137,903 | ||||||
| Other long-term liabilities | 192 | 219 | ||||||
| Innoviva stockholders' equity | 379,543 | 313,495 | ||||||
| Noncontrolling interest | 26,326 | 28,621 | ||||||
| Total liabilities and stockholders' equity | $ | 788,011 | $ | 724,826 |
(1) The selected consolidated
balance sheet amounts at December 31, 2019 are derived from audited financial statements.
| INNOVIVA, INC. | ||||||||
| Cash Flows Summary | ||||||||
| (in thousands) | ||||||||
| Three Months Ended March 31, | ||||||||
| 2020 | 2019 | |||||||
| (unaudited) | ||||||||
| Net cash provided by operating activities | $ | 73,481 | $ | 76,655 | ||||
| Net cash provided by (used in) investing activities | 16,044 | (74,167 | ) | |||||
| Net cash provided by (used in) financing activities | (15,640 | ) | 246 |
Investor & Media Contacts:
Dan Zacchei / Alex Kovtun