Full Press Release Details
Innoviva Reports First Quarter 2023 Financial
Results and Highlights Recent
Received GSK royalties of $60.3 million, net
product revenues of $11.5 million and license revenue of $8.0
million in the first quarter of 2023
Repurchased $40.3 million of common stock and
paid off $96.2 million of 2023 convertible notes
Calif. - May 9, 2023 - Innoviva, Inc. (NASDAQ: INVA) ("Innoviva" or the "Company"),
a diversified holding company with a portfolio of royalties and other healthcare assets, today reported
financial results for the first quarter ended March 31, 2023, highlighted select corporate achievements and provided an overview
of its key business initiatives.
Gross royalty revenue from
Glaxo Group Limited ("GSK") for the first quarter 2023 was $60.3 million, which included royalties of $50.9 million from
global net sales of RELVAR /BREO ELLIPTA and royalties of $9.4 million from global net
sales of ANORO ELLIPTA , compared to $93.5 million for the first quarter of 2022. The decrease was primarily
due to the sale of our subsidiary, Theravance Respiratory Company, with its TRELEGY royalty stream in July 2022.
Net product sales and license
revenue for the first quarter of 2023 was $19.5 million, which included $9.0 million from GIAPREZA net sales, $2.5 million
from XERAVA net sales and an $8.0 million milestone payment from our partner for the approval of XERAVA
Net income was $34.9 million,
or $0.51 basic per share, for the first quarter of 2023, compared to net income of $15.8 million, or $0.23 basic per share, for the first
Cash and cash equivalents totaled
$144.0 million. Royalty, product sales and milestone receivables totaled $75.8 million as of March 31, 2023.
first quarter of 2023 was marked by strong revenues stemming from both our royalty portfolio and our internal product portfolio along
with continued execution against key corporate objectives," said Pavel Raifeld, Chief Executive Officer of Innoviva. "Also
of note, the U.S. Food and Drug Administration's Antimicrobial Drugs Advisory Committee recently returned a unanimous vote in support
of approval for sulbactam-durlobactam in adults with hospital-acquired bacterial pneumonia and ventilator-associated bacterial pneumonia.
We believe this is a critical step toward bringing this much needed treatment to patients with these life-threatening infections caused
by Acinetobacter Baumannii-calcoaceticus complex. We are disciplined with regard to managing costs and focused on realizing
synergies from our operating platform. We remain excited about the prospects of our business and continue to pursue shareholder value
accretive activities, such as share repurchases."
and Recent Highlights
Innoviva is a diversified
holding company with a portfolio of royalties and other healthcare assets. Innoviva's royalty portfolio includes respiratory assets
partnered with Glaxo Group Limited ("GSK"), including RELVAR /BREO ELLIPTA
(fluticasone furoate/ vilanterol, "FF/VI") and ANORO ELLIPTA (umeclidinium bromide/ vilanterol,
"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's other healthcare assets include infectious disease and hospital assets stemming from acquisitions
of Entasis Therapeutics, including its lead asset sulbactam-durlobactam, and La Jolla Pharmaceutical including GIAPREZA
(angiotensin II), approved to increase blood pressure in adults with septic or other distributive shock and XERAVA
(eravacycline) for the treatment of complicated intra-abdominal infections in adults.
RELVAR and BREO are trademarks of the GSK group of companies.
Forward Looking Statements
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 ,
GIAPREZA and XERAVA in the jurisdictions in which these products have been approved; the strategies, plans
and objectives of Innoviva (including Innoviva's growth strategy and corporate development initiatives); 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; the impact of the novel coronavirus ("COVID-19"); the timing, manner and amount of capital deployment, including potential
capital returns to stockholders; and risks related to the Company's growth strategy. 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, 2022 and Quarterly
Reports on Form 10-Q, which are 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
Condensed Consolidated Statements of Income
(in thousands, except per share data)
| Three Months Ended | ||||||||
| March 31, | ||||||||
| 2023 | 2022 | |||||||
| Revenue: | ||||||||
| Royalty revenue, net (1) | $ | 56,858 | $ | 90,059 | ||||
| Net product sales | 11,514 | - | ||||||
| License revenue | 8,000 | - | ||||||
| Total revenue | 76,372 | 90,059 | ||||||
| Expenses: | ||||||||
| Cost of products sold (inclusive of amortization of inventory fair value adjustments, excluding depreciation and amortization of intangible assets) | 8,749 | - | ||||||
| Cost of license revenue | 1,600 | - | ||||||
| Selling, general and administrative | 19,735 | 6,492 | ||||||
| Research and development | 12,588 | 5,838 | ||||||
| Amortization of acquired intangible assets | 3,805 | - | ||||||
| Loss on debt extinguishment | - | 20,662 | ||||||
| Changes in fair values of equity method investments, net | (15,817 | ) | 11,950 | |||||
| Changes in fair values of equity and long-term investments, net | 2,164 | (2,539 | ) | |||||
| Interest and dividend income | (3,365 | ) | (322 | ) | ||||
| Interest expense | 4,427 | 3,010 | ||||||
| Other expense, net | 1,346 | 250 | ||||||
| Total expenses | 35,232 | 45,341 | ||||||
| Income before income taxes | 41,140 | 44,718 | ||||||
| Income tax expense | 6,275 | 6,860 | ||||||
| Net income | 34,865 | 37,858 | ||||||
| Net income attributable to noncontrolling interest | - | 22,085 | ||||||
| Net income attributable to Innoviva stockholders | $ | 34,865 | $ | 15,773 | ||||
| Basic net income per share attributable to Innoviva stockholders | $ | 0.51 | $ | 0.23 | ||||
| Diluted net income per share attributable to Innoviva stockholders | $ | 0.42 | $ | 0.20 | ||||
| Shares used to compute basic net income per share | 67,786 | 69,544 | ||||||
| Shares used to compute diluted net income per share | 89,788 | 93,730 |
(1) Total net revenue is comprised of the following (in thousands):
| Three Months Ended | ||||||||
| March 31, | ||||||||
| 2023 | 2022 | |||||||
| (unaudited) | ||||||||
| Royalties | $ | 60,314 | $ | 93,515 | ||||
| Amortization of capitalized fees | (3,456 | ) | (3,456 | ) | ||||
| Royalty revenue, net | $ | 56,858 | $ | 90,059 |
Condensed Consolidated
| March 31, | December 31, | |||||||
| 2023 | 2022 | |||||||
| Assets | ||||||||
| Cash and cash equivalents | $ | 144,049 | $ | 291,049 | ||||
| Royalty and product sale receivables | 75,804 | 64,073 | ||||||
| Inventory, net | 49,653 | 55,897 | ||||||
| Prepaid expense and other current assets | 26,940 | 32,492 | ||||||
| Property and equipment, net | 180 | 170 | ||||||
| Equity and long-term investments | 455,865 | 403,013 | ||||||
| Capitalized fees | 94,151 | 97,607 | ||||||
| Right-of-use assets | 2,973 | 3,265 | ||||||
| Goodwill | 27,946 | 26,713 | ||||||
| Intangible assets | 248,314 | 252,919 | ||||||
| Other assets | 3,893 | 4,299 | ||||||
| Total assets | $ | 1,129,768 | $ | 1,231,497 | ||||
| Liabilities and stockholders' equity | ||||||||
| Other current liabilities | $ | 35,210 | $ | 32,322 | ||||
| Accrued interest payable | 833 | 4,359 | ||||||
| Deferred revenue | 2,094 | 2,094 | ||||||
| Convertible subordinated notes, due 2023, net | - | 96,193 | ||||||
| Convertible senior notes, due 2025, net | 190,759 | 190,583 | ||||||
| Convertible senior notes, due 2028, net | 253,933 | 253,597 | ||||||
| Other long term liabilities | 70,133 | 70,918 | ||||||
| Deferred tax liabilities | 5,392 | 5,771 | ||||||
| Income tax payable - long term | 9,921 | 9,872 | ||||||
| Innoviva stockholders' equity | 561,493 | 565,788 | ||||||
| Total liabilities and stockholders' equity | $ | 1,129,768 | $ | 1,231,497 |
| Three Months Ended March 31, | ||||||||
| 2023 | 2022 | |||||||
| Net cash provided by operating activities | $ | 25,684 | $ | 98,102 | ||||
| Net cash used in investing activities | (35,722 | ) | (143,156 | ) | ||||
| Net cash (used in) provided by financing activities | (136,962 | ) | 60,331 | |||||
| Net change | $ | (147,000 | ) | $ | 15,277 | |||
| Cash and cash equivalents at beginning of period | 291,049 | 201,525 | ||||||
| Cash, cash equivalents and restricted cash at end of period | $ | 144,049 | $ | 216,802 |