Full Press Release Details
Reports Second Quarter 2020 Financial Results
Calif., July 29, 2020 - Innoviva, Inc. (NASDAQ: INVA) (the
Company) today reported financial results for the second quarter ended June 30, 2020.
Raifeld, Chief Executive Officer, stated: "RELVAR /BREO
net sales decreased by 3% compared to the second quarter of 2019. U.S. net sales decreased by 11% as continued volume growth was
more than offset by greater price discounting in the ICS/LABA sector. Non-U.S. sales increased by 2%, driven by sales growth in
certain European markets, Japan and Canada.
net sales increased by 5% in the second quarter of 2020 compared to the second quarter of the prior year. U.S. net sales increased
by 7% due to significant volume growth, despite pricing pressure stemming from channel mix shift. Non-U.S. ANORO
sales increased 2%, supported by growth in certain European markets. In addition, TRELEGY ELLIPTA
global net sales were $240.5 million, compared to $151.4 million during
comparable period a year ago.
While the ultimate COVID-19 impact remains uncertain, we have
seen signs of normalization over the past quarter. We were pleased with the meaningful volume growth across the portfolio, despite
the challenging environment and certain pandemic-related stockpiling earlier in the year," continued Mr. Raifeld.
Mr. Raifeld concluded, "After spending several weeks at
Innoviva, I am even more excited about the potential for significant shareholder value creation. Capital allocation and cost discipline
remain our key priorities, and we expect to continue to opportunistically invest in promising, differentiated assets, such as those
developed by Armata and Entasis, that address significant unmet medical needs and offer attractive return profiles."
1 For TRELEGY 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 and ANORO 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 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; the impact of the novel coronavirus
("COVID-19"). 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 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.
Condensed Consolidated Statements of Income
(in thousands, except per share data)
| Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||
| 2020 | 2019 | 2020 | 2019 | |||||||||||||
| Revenue: | ||||||||||||||||
| Royalty revenue from a related party, net (1) | $ | 68,946 | $ | 64,107 | $ | 147,624 | $ | 119,290 | ||||||||
| Revenue from collaborative arrangements with a related party | 10,000 | - | 10,000 | - | ||||||||||||
| Total net revenue | 78,946 | 64,107 | 157,624 | 119,290 | ||||||||||||
| Operating expenses: | ||||||||||||||||
| Research and development | 559 | - | 559 | - | ||||||||||||
| General and administrative | 2,596 | 4,347 | 5,159 | 7,362 | ||||||||||||
| Total operating expenses | 3,155 | 4,347 | 5,718 | 7,362 | ||||||||||||
| Income from operations | 75,791 | 59,760 | 151,906 | 111,928 | ||||||||||||
| Other income (expense), net | 30 | (8 | ) | 98 | (7 | ) | ||||||||||
| Interest income | 158 | 1,403 | 1,460 | 2,378 | ||||||||||||
| Interest expense | (4,561 | ) | (4,661 | ) | (9,077 | ) | (9,278 | ) | ||||||||
| Changes in fair values of equity investments | 46,698 | - | 68,613 | - | ||||||||||||
| Income before income taxes | 118,116 | 56,494 | 213,000 | 105,021 | ||||||||||||
| Income tax expense, net | 19,891 | 10,433 | 35,823 | 18,941 | ||||||||||||
| Net income | 98,225 | 46,061 | 177,177 | 86,080 | ||||||||||||
| Net income attributable to noncontrolling interest | 21,381 | 8,321 | 34,896 | 14,550 | ||||||||||||
| Net income attributable to Innoviva stockholders | $ | 76,844 | $ | 37,740 | $ | 142,281 | $ | 71,530 | ||||||||
| Basic net income per share attributable to Innoviva stockholders | $ | 0.76 | $ | 0.37 | $ | 1.40 | $ | 0.71 | ||||||||
| Diluted net income per share attributable to Innoviva stockholders | $ | 0.69 | $ | 0.34 | $ | 1.27 | $ | 0.65 | ||||||||
| Shares used to compute basic net income per share | 101,324 | 101,151 | 101,280 | 101,105 | ||||||||||||
| Shares used to compute diluted net income per share | 113,545 | 113,391 | 113,527 | 113,384 |
(1) Total net revenue from a related party is comprised of the following (in thousands):
| Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||
| 2020 | 2019 | 2020 | 2019 | |||||||||||||
| (unaudited) | (unaudited) | |||||||||||||||
| Royalties from a related party | $ | 72,402 | $ | 67,563 | $ | 154,536 | $ | 126,202 | ||||||||
| Amortization of capitalized fees paid to a related party | (3,456 | ) | (3,456 | ) | (6,912 | ) | (6,912 | ) | ||||||||
| Royalty revenue from a related party, net | $ | 68,946 | $ | 64,107 | $ | 147,624 | $ | 119,290 |
Condensed Consolidated Balance Sheets
| June 30, | December 31, | |||||||
| 2020 | 2019 | |||||||
| (unaudited) | (1) | |||||||
| Assets | ||||||||
| Cash, cash equivalents and marketable securities | $ | 417,146 | $ | 350,845 | ||||
| Other current assets | 83,047 | 80,389 | ||||||
| Property and equipment, net | 37 | 33 | ||||||
| Equity investments | 128,613 | - | ||||||
| Capitalized fees paid to a related party, net | 132,164 | 139,076 | ||||||
| Deferred tax assets, net | 118,348 | 154,171 | ||||||
| Other assets | 264 | 312 | ||||||
| Total assets | $ | 879,619 | $ | 724,826 | ||||
| Liabilities and stockholders' equity | ||||||||
| Other current liabilities | $ | 1,262 | $ | 1,219 | ||||
| Accrued interest payable | 4,152 | 4,152 | ||||||
| Convertible subordinated notes, net | 239,499 | 239,217 | ||||||
| Convertible senior notes, net | 141,731 | 137,903 | ||||||
| Other long-term liabilities | 163 | 219 | ||||||
| Innoviva stockholders' equity | 456,907 | 313,495 | ||||||
| Noncontrolling interest | 35,905 | 28,621 | ||||||
| Total liabilities and stockholders' equity | $ | 879,619 | $ | 724,826 |
(1) The selected consolidated balance sheet amounts at December 31, 2019 are derived from audited financial
| Six Months Ended June 30, | ||||||||
| 2020 | 2019 | |||||||
| (unaudited) | ||||||||
| Net cash provided by operating activities | $ | 153,275 | $ | 133,151 | ||||
| Net cash provided by (used in) investing activities | 9,044 | (54,060 | ) | |||||
| Net cash provided by (used in) financing activities | (27,268 | ) | 444 |
Investor & Media Contacts:
Dan Zacchei / Alex Kovtun