Full Press Release Details
First Quarter 2024 Financial Results; Highlights Recent Company Progress
Core royalty platform on track;
receiving GSK royalties of $61.9 million
Achieved net product
revenues of $19.1 million, representing 66% year-over-year growth driven by launch of XACDURO and growth of key core
Strong pipeline progress: positive Phase 3 zoliflodacin clinical trial
results in uncomplicated gonorrhea highlighted at ESCMID Global 2024; on track to submit NDA in early 2025
Derek Small appointed to the Company's
BURLINGAME, Calif. - May 8,
2024 - Innoviva, Inc. (NASDAQ: INVA) ("Innoviva" or the "Company"), a
diversified holding company with a core royalties portfolio, a leading
critical care and infectious disease platform known as Innoviva Specialty Therapeutics ("IST"),
and a portfolio of strategic investments in healthcare assets, today reported financial results for the first quarter ended March 31,
2024, and highlighted select corporate achievements.
"Our first quarter financial results continue to demonstrate the successful transformation for Innoviva. We had a strong performance
driven by resilient cash flows from our core GSK royalties portfolio and robust revenue growth across our commercial products marketed
by IST, a leader in critical care medicine and infectious disease," said Pavel Raifeld, Chief Executive Officer of Innoviva. "We
also remain laser focused on utilizing our strong financials to drive shareholder value by continuing to exercise cost discipline, investing
prudently in our strategic healthcare assets, and completing our share buyback plan."
Matt Ronsheim, Ph.D., President of IST, noted: "Our IST platform
is a powerful engine for growth anchored by a robust portfolio of differentiated life saving therapies. We are pleased with our first
quarter performance, led by the strong launch of our novel therapeutic XACDURO . Our core products GIAPREZA
and XERAVA continue to grow, propelled by increasing awareness of our strong data underscoring the value of our
products. We are also excited about our lead pipeline product, zoliflodacin, a potential first in class well tolerated oral drug for
uncomplicated gonorrhea, whose Phase 3 data was highlighted in an oral presentation by our non-profit partner GARDP at ESCMID Global
2024, the largest global infectious disease congress. We remain on track to submit our New Drug Application for zoliflodacin in early
Financial Highlights
Key Business and R&D
Strategic Healthcare Assets
is a diversified holding company with a core royalties portfolio, a leading critical
care and infectious disease platform known as Innoviva Specialty Therapeutics ("IST"),
and a portfolio of strategic investments in healthcare assets. Innoviva's royalty portfolio includes respiratory assets
partnered with Glaxo Group Limited ("GSK"). Innoviva is entitled to receive royalties from GSK on sales of RELVAR /BREO
ELLIPTA and ANORO ELLIPTA . Innoviva's other innovative healthcare assets
include infectious disease and critical care assets stemming from acquisitions of Entasis Therapeutics, including XACDURO
(sulbactam for injection; durlobactam for injection), co-packaged for intravenous use approved for the treatment of adults with hospital-acquired
bacterial pneumonia and ventilator-associated bacterial pneumonia caused by susceptible strains of Acinetobacter baumannii-calcoaceticus
complex and the investigational zoliflodacin currently being developed for the treatment of uncomplicated gonorrhea, and La Jolla
Pharmaceutical Company, 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
and BREO are trademarks of the GSK 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 , GIAPREZA ,
XERAVA and XACDURO 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, 2023 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 law.
Corporate Communications
Investors and Media:
Condensed Consolidated Statements of Income and Comprehensive Income
(in thousands, except per share data)
| Three Months Ended March 31, | ||||||||
| 2024 | 2023 | |||||||
| Revenue: | ||||||||
| Royalty revenue, net (1) | $ | 58,415 | $ | 56,858 | ||||
| Net product sales | 19,084 | 11,514 | ||||||
| License Revenue | - | 8,000 | ||||||
| Total revenue | 77,499 | 76,372 | ||||||
| Expenses: | ||||||||
| Cost of products sold (inclusive of amortization of inventory fair value adjustments) | 10,971 | 8,749 | ||||||
| Cost of license revenue | - | 1,600 | ||||||
| Selling, general and administrative | 30,405 | 19,735 | ||||||
| Research and development | 3,878 | 12,588 | ||||||
| Amortization of acquired intangible assets | 6,440 | 3,805 | ||||||
| Changes in fair values of equity method investments, net | (35,342 | ) | (15,817 | ) | ||||
| Changes in fair values of equity and long-term investments, net | 13,335 | 2,164 | ||||||
| Interest and dividend income | (4,399 | ) | (3,365 | ) | ||||
| Interest expense | 5,851 | 4,427 | ||||||
| Other expense, net | 1,236 | 1,346 | ||||||
| Total expenses | 32,375 | 35,232 | ||||||
| Income before income taxes | 45,124 | 41,140 | ||||||
| Income tax expense | 8,592 | 6,275 | ||||||
| Net income and comprehensive income | $ | 36,532 | $ | 34,865 | ||||
| Net income per share | ||||||||
| Basic | $ | 0.58 | $ | 0.51 | ||||
| Diluted | $ | 0.46 | $ | 0.42 | ||||
| Shares used to compute net income per share | ||||||||
| Basic | 63,185 | 67,786 | ||||||
| Diluted | 84,531 | 89,788 |
(1) Total net revenue is comprised of the following (in thousands):
| Three Months Ended March 31, | ||||||||
| 2024 | 2023 | |||||||
| (unaudited) | ||||||||
| Royalties | $ | 61,871 | $ | 60,314 | ||||
| Amortization of capitalized fees | (3,456 | ) | (3,456 | ) | ||||
| Royalty revenue, net | $ | 58,415 | $ | 56,858 |
Condensed Consolidated Balance Sheets
| March 31, | December 31, | |||||||
| 2024 | 2023 | |||||||
| Assets | ||||||||
| Cash and cash equivalents | $ | 178,357 | $ | 193,513 | ||||
| Royalty and product sale receivables | 76,010 | 84,075 | ||||||
| Inventory, net | 37,437 | 40,737 | ||||||
| Prepaid expense and other current assets | 19,538 | 25,894 | ||||||
| Property and equipment, net | 324 | 483 | ||||||
| Equity and long-term investments | 628,437 | 560,978 | ||||||
| Capitalized fees | 80,328 | 83,784 | ||||||
| Right-of-use assets | 2,269 | 2,536 | ||||||
| Goodwill | 17,905 | 17,905 | ||||||
| Intangible assets | 223,895 | 230,335 | ||||||
| Other assets | 3,112 | 3,267 | ||||||
| Total assets | $ | 1,267,612 | $ | 1,243,507 | ||||
| Liabilities and stockholders' equity | ||||||||
| Other current liabilities | $ | 28,059 | $ | 33,435 | ||||
| Accrued interest payable | 833 | 3,422 | ||||||
| Deferred revenues | 987 | 1,277 | ||||||
| Convertible senior notes, due 2025, net | 191,476 | 191,295 | ||||||
| Convertible senior notes, due 2028, net | 255,283 | 254,939 | ||||||
| Other long term liabilities | 71,686 | 71,870 | ||||||
| Deferred tax liabilities | 3,807 | 563 | ||||||
| Income tax payable - long term | 11,800 | 11,751 | ||||||
| Innoviva stockholders' equity | 703,681 | 674,955 | ||||||
| Total liabilities and stockholders' equity | $ | 1,267,612 | $ | 1,243,507 |
| Three Months Ended March 31, | ||||||||
| 2024 | 2023 | |||||||
| Net cash provided by operating activities | $ | 37,047 | $ | 25,684 | ||||
| Net cash used in investing activities | (43,038 | ) | (35,722 | ) | ||||
| Net cash used in financing activities | (9,165 | ) | (136,962 | ) | ||||
| Net change | $ | (15,156 | ) | $ | (147,000 | ) | ||
| Cash and cash equivalents at beginning of period | 193,513 | 291,049 | ||||||
| Cash and cash equivalents at end of period | $ | 178,357 | $ | 144,049 |