Full Press Release Details
Innoviva Reports Second Quarter 2022 Financial
Results and Highlights Recent Company Progress
BURLINGAME, Calif.-(BUSINESS
WIRE)-Jul. 27, 2022-Innoviva, Inc. (NASDAQ: INVA) ("Innoviva" and "the Company"), a
diversified holding company with a portfolio of royalties and a growing portfolio of healthcare assets in infectious disease and other
areas of high unmet need, today reported financial results for the second quarter ended June 30, 2022.
Pavel Raifeld, Chief Executive
Officer of Innoviva, Inc. stated: "This has been an exciting, transformative time for Innoviva as our core royalty business continued
to deliver strong revenues, and we meaningfully advanced our strategy via key strategic and opportunistic transactions."
Mr. Raifeld continued: "We
are thrilled to complete the acquisition of Entasis with its strong pipeline anchored by differentiated, promising lead asset SUL-DUR.
Our announced acquisition of La Jolla gives us a highly complementary, profitable commercial platform, creating a fully integrated business
in the hospital and infectious disease spaces, diversifying our operations, and meaningfully enhancing long-term growth prospects. We
view the recent divestiture of our stake in Theravance Respiratory Company as a very economically and strategically compelling transaction
providing us with significant optionality. As a well-capitalized, highly cashflow generative company, we are strongly positioned for
sustained value creation in the current market environment."
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"), ANORO ELLIPTA (umeclidinium bromide/ vilanterol,
"UMEC/VI") and, formerly, 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 .
BREO , TRELEGY and ELLIPTA 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 and, formerly,
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, 2021 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 | Six Months Ended | |||||||||||||||
| June 30, | June 30, | |||||||||||||||
| 2022 | 2021 | 2022 | 2021 | |||||||||||||
| Revenue (1) | $ | 108,220 | $ | 100,806 | $ | 198,279 | $ | 186,324 | ||||||||
| Operating expenses: | ||||||||||||||||
| Research and development | 13,884 | 38 | 19,722 | 87 | ||||||||||||
| General and administrative | 11,782 | 4,228 | 18,274 | 10,214 | ||||||||||||
| Total operating expenses | 25,666 | 4,266 | 37,996 | 10,301 | ||||||||||||
| Income from operations | 82,554 | 96,540 | 160,283 | 176,023 | ||||||||||||
| Interest and dividend income | 724 | 20 | 1,046 | 50 | ||||||||||||
| Other expense, net | (528 | ) | (951 | ) | (778 | ) | (1,384 | ) | ||||||||
| Interest expense | (3,655 | ) | (4,745 | ) | (6,665 | ) | (9,439 | ) | ||||||||
| Loss on debt extinguishment | - | - | (20,662 | ) | - | |||||||||||
| Changes in fair values of equity and long-term investments, net | (58,600 | ) | 45,315 | (68,011 | ) | 100,360 | ||||||||||
| Income before income taxes | 20,495 | 136,179 | 65,213 | 265,610 | ||||||||||||
| Income tax expense (benefit), net | (876 | ) | 25,333 | 5,984 | 45,069 | |||||||||||
| Net income | 21,371 | 110,846 | 59,229 | 220,541 | ||||||||||||
| Net income attributable to noncontrolling interest | 20,432 | 21,898 | 42,517 | 37,470 | ||||||||||||
| Net income attributable to Innoviva stockholders | $ | 939 | $ | 88,948 | $ | 16,712 | $ | 183,071 | ||||||||
| Basic net income per share attributable to Innoviva stockholders | $ | 0.01 | $ | 1.01 | $ | 0.24 | $ | 1.93 | ||||||||
| Diluted net income per share attributable to Innoviva stockholders | $ | 0.05 | $ | 0.90 | $ | 0.24 | $ | 1.73 | ||||||||
| Shares used to compute basic net income per share | 69,643 | 88,423 | 69,594 | 94,858 | ||||||||||||
| Shares used to compute diluted net income per share | 95,653 | 100,639 | 94,692 | 107,096 |
(1) Total net revenue from a related party is comprised of the following (in thousands):
| Three Months Ended | Six Months Ended | |||||||||||||||
| June 30, | June 30, | |||||||||||||||
| 2022 | 2021 | 2022 | 2021 | |||||||||||||
| (unaudited) | (unaudited) | |||||||||||||||
| Royalties from a related party | $ | 111,676 | $ | 104,262 | $ | 205,191 | $ | 193,236 | ||||||||
| Amortization of capitalized fees paid to a related party | (3,456 | ) | (3,456 | ) | (6,912 | ) | (6,912 | ) | ||||||||
| Royalty revenue from a related party, net | $ | 108,220 | $ | 100,806 | $ | 198,279 | $ | 186,324 |
Condensed Consolidated Balance Sheets
| June 30, | December 31, | |||||||
| 2022 | 2021 | |||||||
| (unaudited) | (1) | |||||||
| Assets | ||||||||
| Cash and cash equivalents | $ | 283,580 | $ | 201,525 | ||||
| Other current assets | 116,748 | 112,148 | ||||||
| Property and equipment, net | 176 | 12 | ||||||
| Equity and long-term investments | 494,097 | 483,845 | ||||||
| Capitalized fees paid to a related party, net | 104,518 | 111,430 | ||||||
| Right-of-use assets | 3,545 | 97 | ||||||
| Goodwill | 5,544 | - | ||||||
| Intangible assets | 105,000 | - | ||||||
| Deferred tax assets, net | 23,274 | 17,327 | ||||||
| Other assets | 1,157 | 11 | ||||||
| Total assets | $ | 1,137,639 | $ | 926,395 | ||||
| Liabilities and stockholders' equity | ||||||||
| Other current liabilities | $ | 25,338 | $ | 1,655 | ||||
| Accrued interest payable | 4,498 | 4,152 | ||||||
| Convertible subordinated notes, due 2023, net | 96,072 | 240,364 | ||||||
| Convertible senior notes, due 2025, net | 190,235 | 154,289 | ||||||
| Convertible senior notes, due 2028, net | 252,943 | - | ||||||
| Lease liabilities, long-term | 3,091 | - | ||||||
| Innoviva stockholders' equity | 388,337 | 414,743 | ||||||
| Noncontrolling interest | 177,125 | 111,192 | ||||||
| Total liabilities and stockholders' equity | $ | 1,137,639 | $ | 926,395 |
The selected consolidated balance sheet amounts at December 31, 2021 are derived from audited financial statements.
| Six Months Ended June 30, | ||||||||
| 2022 | 2021 | |||||||
| (unaudited) | ||||||||
| Net cash provided by operating activities | $ | 177,137 | $ | 168,721 | ||||
| Net cash provided by (used in) investing activities | (145,678 | ) | 63,627 | |||||
| Net cash provided by (used in) financing activities | 50,596 | (435,570 | ) |