Full Press Release Details
Innoviva Reports Second Quarter 2023 Financial
Results and Highlights Recent Company Progress
Received GSK royalties of $65.7 million, net
product revenues of $15.7 million and license revenue of $3.0 million in the second quarter of 2023
FDA approval for XACDURO for treatment of hospital-acquired bacterial pneumonia and ventilator-associated bacterial pneumonia caused
by susceptible strains of Acinetobacter
Repurchased $9.2 million of common stock
Calif. - August 2, 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 second quarter ended June 30, 2023, highlighted select corporate achievements and provided
an overview of its key business initiatives.
Gross royalty revenue from Glaxo Group Limited ("GSK") for the second quarter 2023 was $65.7 million, which included
royalties of $54.4 million from global net sales of RELVAR /BREO ELLIPTA and royalties
of $11.3 million from global net sales of ANORO ELLIPTA compared to $111.7 million for the second quarter
of 2022, which included royalties of $59.3 million from global net
sales of RELVAR /BREO ELLIPTA
and $9.6 million from global net sales of ANORO ELLIPTA ,
respectively. The decrease was primarily due to the sale of our subsidiary, Theravance Respiratory Company, and its TRELEGY
ELLIPTA royalty stream in July 2022.
Net product sales and license revenue for the second quarter of 2023 was $18.7 million, which included $11.2 million from GIAPREZA
net sales, $4.5 million from XERAVA net sales and an $3.0 million milestone payment from our partner for FDA approval
Net income was $1.3 million, or $0.02 basic per share, for the second quarter of 2023, compared to net income of $0.9 million,
or $0.01 basic per share, for the second quarter of 2022.
Cash and cash equivalents totaled $173.0 million. Royalty, product sales and milestone receivables totaled $81.0 million as of
second quarter of 2023 was marked by strong revenues stemming from our robust royalty portfolio and historically highest sales from our
internal product portfolio," said Pavel Raifeld, Chief Executive Officer of Innoviva. "We ended the quarter on a strong note
with the approval of XACDURO (sulbactam for injection; durlobactam for injection) for treatment of hospital-acquired
bacterial pneumonia and ventilator-associated bacterial pneumonia. This is the first pathogen-targeted therapy to be approved for these
life-threatening infections caused by Acinetobacter Baumannii-calcoaceticus complex, and we plan to bring this product to patients
later this year. We remained disciplined on costs and saw meaningful operational progress among our investees, market volatility
notwithstanding. We are excited about the prospects of our business and continue to pursue shareholder value accretive activities, such
as share repurchases."
and Recent Highlights
| On July 11, 2023, Innoviva's wholly owned subsidiary, Innoviva Strategic Opportunities, entered into a credit and security agreement with Armata Pharmaceuticals, Inc. (NYSE: ARMP) ("Armata") and invested $25.0 million to advance Armata's pipeline of therapeutic phage candidates and support the build-out of its state-of-the art cGMP manufacturing facility. | ||
| On July 11, 2023, Innoviva director, Deborah Birx, resigned from Innoviva Board and joined Armata as Chief Executive Officer. |
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 innovative healthcare assets include infectious disease and hospital 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 (Acinetobacter) 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 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 , 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, 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 law.
Consolidated Statements of Income
thousands, except per share data)
| Three Months Ended | Six Months Ended | |||||||||||||||
| June 30, | June 30, | |||||||||||||||
| 2023 | 2022 | 2023 | 2022 | |||||||||||||
| Revenue: | ||||||||||||||||
| Royalty revenue, net (1) | $ | 62,265 | $ | 108,220 | $ | 119,123 | $ | 198,279 | ||||||||
| Net product sales | 15,727 | - | 27,241 | - | ||||||||||||
| License revenue | 3,000 | - | 11,000 | - | ||||||||||||
| Total revenue | 80,992 | 108,220 | 157,364 | 198,279 | ||||||||||||
| Expenses: | ||||||||||||||||
| Cost of products sold (inclusive of amortization of inventory fair value adjustments, excluding depreciation and amortization of intangible assets) | 8,979 | - | 17,728 | - | ||||||||||||
| Cost of license revenue | - | - | 1,600 | - | ||||||||||||
| Selling, general and administrative | 23,542 | 11,782 | 43,277 | 18,274 | ||||||||||||
| Research and development | 14,989 | 13,884 | 27,577 | 19,722 | ||||||||||||
| Amortization of acquired intangible assets | 4,958 | - | 8,763 | - | ||||||||||||
| Loss on debt extinguishment | - | - | - | 20,662 | ||||||||||||
| Changes in fair values of equity method investments, net | 19,911 | 42,823 | 4,094 | 54,773 | ||||||||||||
| Changes in fair values of equity and long-term investments, net | 83 | 15,777 | 2,247 | 13,238 | ||||||||||||
| Interest and dividend income | (3,553 | ) | (724 | ) | (6,918 | ) | (1,046 | ) | ||||||||
| Interest expense | 4,382 | 3,655 | 8,809 | 6,665 | ||||||||||||
| Other expense, net | 1,896 | 528 | 3,242 | 778 | ||||||||||||
| Total expenses | 75,187 | 87,725 | 110,419 | 133,066 | ||||||||||||
| Income before income taxes | 5,805 | 20,495 | 46,945 | 65,213 | ||||||||||||
| Income tax expense | 4,525 | (876 | ) | 10,800 | 5,984 | |||||||||||
| Net income | 1,280 | 21,371 | 36,145 | 59,229 | ||||||||||||
| Net income attributable to noncontrolling interest | - | 20,432 | - | 42,517 | ||||||||||||
| Net income attributable to Innoviva stockholders | $ | 1,280 | $ | 939 | $ | 36,145 | $ | 16,712 | ||||||||
| Basic net income per share attributable to Innoviva stockholders | $ | 0.02 | $ | 0.01 | $ | 0.54 | $ | 0.24 | ||||||||
| Diluted net income per share attributable to Innoviva stockholders | $ | 0.02 | $ | 0.05 | $ | 0.46 | $ | 0.24 | ||||||||
| Shares used to compute basic net income per share | 65,341 | 69,643 | 66,557 | 69,594 | ||||||||||||
| Shares used to compute diluted net income per share | 65,489 | 95,653 | 88,175 | 94,692 |
net revenue is comprised of the following (in thousands):
| Three Months Ended | Six Months Ended | |||||||||||||||
| June 30, | June 30, | |||||||||||||||
| 2023 | June 30, | 2023 | 2022 | |||||||||||||
| (unaudited) | (unaudited) | |||||||||||||||
| Royalties | $ | 65,721 | $ | 111,676 | $ | 126,035 | $ | 205,191 | ||||||||
| Amortization of capitalized fees | (3,456 | ) | (3,456 | ) | (6,912 | ) | (6,912 | ) | ||||||||
| Royalty revenue, net | $ | 62,265 | $ | 108,220 | $ | 119,123 | $ | 198,279 |
Consolidated Balance Sheets
| June 30, | December 31, | |||||||
| 2023 | 2022 | |||||||
| Assets | ||||||||
| Cash and cash equivalents | $ | 173,025 | $ | 291,049 | ||||
| Royalty and product sale receivables | 80,996 | 64,073 | ||||||
| Inventory, net | 46,846 | 55,897 | ||||||
| Prepaid expense and other current assets | 22,671 | 32,492 | ||||||
| Property and equipment, net | 161 | 170 | ||||||
| Equity and long-term investments | 433,001 | 403,013 | ||||||
| Capitalized fees | 90,695 | 97,607 | ||||||
| Right-of-use assets | 2,719 | 3,265 | ||||||
| Goodwill | 14,882 | 26,713 | ||||||
| Intangible assets | 243,356 | 252,919 | ||||||
| Deferred tax assets | 6,327 | - | ||||||
| Other assets | 3,562 | 4,299 | ||||||
| Total assets | $ | 1,118,241 | $ | 1,231,497 | ||||
| Liabilities and stockholders' equity | ||||||||
| Other current liabilities | $ | 32,722 | $ | 32,322 | ||||
| Accrued interest payable | 3,422 | 4,359 | ||||||
| Deferred revenue | 3,254 | 2,094 | ||||||
| Convertible subordinated notes, due 2023, net | - | 96,193 | ||||||
| Convertible senior notes, due 2025, net | 190,937 | 190,583 | ||||||
| Convertible senior notes, due 2028, net | 254,264 | 253,597 | ||||||
| Other long term liabilities | 68,584 | 70,918 | ||||||
| Deferred tax liabilities | - | 5,771 | ||||||
| Income tax payable - long term | 9,971 | 9,872 | ||||||
| Innoviva stockholders' equity | 555,087 | 565,788 | ||||||
| Total liabilities and stockholders' equity | $ | 1,118,241 | $ | 1,231,497 |
| Six Months Ended June 30, | ||||||||
| 2023 | 2022 | |||||||
| Net cash provided by operating activities | $ | 63,866 | $ | 177,137 | ||||
| Net cash used in investing activities | (35,722 | ) | (145,678 | ) | ||||
| Net cash (used in) provided by financing activities | (146,168 | ) | 50,596 | |||||
| Net change | $ | (118,024 | ) | $ | 82,055 | |||
| Cash and cash equivalents at beginning of period | 291,049 | 201,525 | ||||||
| Cash, cash equivalents and restricted cash at end of period | $ | 173,025 | $ | 283,580 |