Full Press Release Details
Innoviva Reports Third Quarter 2020 Financial
BURLINGAME, Calif., October 28, 2020 -
Innoviva, Inc. (NASDAQ: INVA) (the "Company") today reported financial results for the third quarter ended
Raifeld, Chief Executive Officer of Innoviva, Inc., stated: "RELVAR /BREO
net sales increased by 38% compared to the third quarter of 2019. U.S. net sales increased by 79% due to a significant prior period
adjustment from favorable pricing and continued volume growth. Non-U.S. sales increased by 10%, driven by sales growth in certain
European markets, Japan and Canada.
net sales increased by 3% in the third quarter of 2020 compared to the same quarter of 2019. U.S. net sales decreased by 4% due
to competitive pricing pressure despite strong volume trends. Non-U.S. ANORO ELLIPTA
net sales increased 16%, supported by growth in certain European markets.
In addition, TRELEGY ELLIPTA global
net sales were $251.9 million, compared to $172.8 million during the comparable period a year ago.
"As the market environment has continued to normalize,
we are pleased with the performance of our products due to excellent underlying demand," said Pavel Raifeld.
Mr. Raifeld concluded, "Today's results demonstrate
the resilience of our revenues even in the face of massive global disruptions driven by COVID-19 and point to our products'
long-term sustainability, while the FDA's recent approval of the asthma indication for Trelegy reinforces strong growth potential.
Combined with our resources, focus on thoughtful capital allocation, and strict cost discipline, this positions us well for shareholder
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
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 | Nine Months Ended | |||||||||||||||
| September 30, | September 30, | |||||||||||||||
| 2020 | 2019 | 2020 | 2019 | |||||||||||||
| Revenue: | ||||||||||||||||
| Royalty revenue from a related party, net (1) | $ | 88,694 | $ | 65,755 | $ | 236,318 | $ | 185,045 | ||||||||
| Revenue from collaborative arrangements with a related party | - | - | 10,000 | - | ||||||||||||
| Total net revenue | 88,694 | 65,755 | 246,318 | 185,045 | ||||||||||||
| Operating expenses: | ||||||||||||||||
| Research and development | 1,010 | - | 1,569 | - | ||||||||||||
| General and administrative | 3,254 | 4,962 | 8,413 | 12,324 | ||||||||||||
| Total operating expenses | 4,264 | 4,962 | 9,982 | 12,324 | ||||||||||||
| Income from operations | 84,430 | 60,793 | 236,336 | 172,721 | ||||||||||||
| Other income (expense), net | (13 | ) | (115 | ) | 85 | (122 | ) | |||||||||
| Interest income | 41 | 1,624 | 1,501 | 4,002 | ||||||||||||
| Interest expense | (4,603 | ) | (4,693 | ) | (13,680 | ) | (13,971 | ) | ||||||||
| Changes in fair values of equity investments | (29,368 | ) | - | 39,245 | - | |||||||||||
| Income before income taxes | 50,487 | 57,609 | 263,487 | 162,630 | ||||||||||||
| Income tax expense, net | 8,866 | 10,558 | 44,689 | 29,499 | ||||||||||||
| Net income | 41,621 | 47,051 | 218,798 | 133,131 | ||||||||||||
| Net income attributable to noncontrolling interest | 13,403 | 7,242 | 48,299 | 21,792 | ||||||||||||
| Net income attributable to Innoviva stockholders | $ | 28,218 | $ | 39,809 | $ | 170,499 | $ | 111,339 | ||||||||
| Basic net income per share attributable to Innoviva stockholders | $ | 0.28 | $ | 0.39 | $ | 1.68 | $ | 1.10 | ||||||||
| Diluted net income per share attributable to Innoviva stockholders | $ | 0.26 | $ | 0.36 | $ | 1.53 | $ | 1.01 | ||||||||
| Shares used to compute basic net income per share | 101,358 | 101,191 | 101,306 | 101,134 | ||||||||||||
| Shares used to compute diluted net income per share | 113,572 | 113,415 | 113,543 | 113,394 |
(1) Total net revenue from a related
party is comprised of the following (in thousands):
| Three Months Ended | Nine Months Ended | |||||||||||||||
| September 30, | September 30, | |||||||||||||||
| 2020 | 2019 | 2020 | 2019 | |||||||||||||
| (unaudited) | (unaudited) | |||||||||||||||
| Royalties from a related party | $ | 92,150 | $ | 69,211 | $ | 246,686 | $ | 195,413 | ||||||||
| Amortization of capitalized fees paid to a related party | (3,456 | ) | (3,456 | ) | (10,368 | ) | (10,368 | ) | ||||||||
| Royalty revenue from a related party, net | $ | 88,694 | $ | 65,755 | $ | 236,318 | $ | 185,045 |
Condensed Consolidated Balance Sheets
| September 30, | December 31, | |||||||
| 2020 | 2019 | |||||||
| (unaudited) | (1) | |||||||
| Assets | ||||||||
| Cash, cash equivalents and marketable securities | $ | 479,193 | $ | 350,845 | ||||
| Other current assets | 92,848 | 80,389 | ||||||
| Property and equipment, net | 33 | 33 | ||||||
| Equity investments | 111,745 | - | ||||||
| Capitalized fees paid to a related party, net | 128,708 | 139,076 | ||||||
| Deferred tax assets, net | 109,490 | 154,171 | ||||||
| Other assets | 239 | 312 | ||||||
| Total assets | $ | 922,256 | $ | 724,826 | ||||
| Liabilities and stockholders' equity | ||||||||
| Other current liabilities | $ | 2,230 | $ | 1,219 | ||||
| Accrued interest payable | 1,668 | 4,152 | ||||||
| Convertible subordinated notes, net | 239,638 | 239,217 | ||||||
| Convertible senior notes, net | 143,712 | 137,903 | ||||||
| Other long-term liabilities | 136 | 219 | ||||||
| Innoviva stockholders' equity | 485,556 | 313,495 | ||||||
| Noncontrolling interest | 49,316 | 28,621 | ||||||
| Total liabilities and stockholders' equity | $ | 922,256 | $ | 724,826 |
(1) The selected consolidated balance
sheet amounts at December 31, 2019 are derived from audited financial statements.
| Nine Months Ended September 30, | ||||||||
| 2020 | 2019 | |||||||
| (unaudited) | ||||||||
| Net cash provided by operating activities | $ | 227,833 | $ | 190,553 | ||||
| Net cash provided by (used in) investing activities | 544 | (69,997 | ) | |||||
| Net cash used in financing activities | (27,280 | ) | (10,027 | ) |
Investor & Media Contacts:
Dan Zacchei / Alex Kovtun