- Total net revenue increased by 43% to $78.7 million in the
first quarter of 2020, compared to the same quarter in 2019.
- Income before income taxes increased by 96% to $94.9 million in
the first quarter of 2020, compared to the same quarter in
2019.
Innoviva, Inc. (NASDAQ:INVA) ("Innoviva," or "the Company")
today reported financial results for the first quarter ended March
31, 2020.
- Gross royalty revenues of $82.1 million from Glaxo Group
Limited (“GSK”) for the first quarter of 2020 included royalties of
$56.1 million from global net sales of RELVAR®/BREO® ELLIPTA®,
royalties of $9.9 million from global net sales of ANORO® ELLIPTA®
and $16.1 million from global net sales of TRELEGY®
ELLIPTA®.[1]
- Total operating expenses for the first quarter of 2020 were
$2.6 million, compared to $3.0 million in the first quarter of
2019. Stock-based compensation for the first quarter of 2020 was
$0.4 million, compared to $0.6 million in the first quarter of
2019.
- Changes in fair values of equity investments in the amount of
$21.9 million as of March 31, 2020 reflect the unrealized gains and
fair value changes between the total estimated fair value of $46.9
million of our investment in both common stock and warrants of
Armata Pharmaceuticals, Inc. (“Armata”) and the total purchase
price of $25.0 million.
- Net cash and cash equivalents, short-term investments and
marketable securities totaled $384.0 million, and royalties
receivable from GSK totaled $82.1 million, as of March 31,
2020.
“Global net sales of RELVAR®/BREO® ELLIPTA® increased 31% versus
the first quarter of 2019. U.S. net sales increased by 47% as
increased pricing discounts in the ICS/LABA sector were offset by a
one-time significant positive prior period rebate adjustment and
continued volume growth. Non-U.S. sales increased 23% versus the
first quarter of 2019, driven by sales growth in certain European
markets and in Japan. ANORO® ELLIPTA® global net sales increased
15% in the first quarter of 2020. U.S. net sales increased 8% as
volume growth offset price pressure from increased amounts of sales
through market segments with higher rebates. Non-U.S. ANORO®
ELLIPTA® net sales grew 24% year over year in the quarter supported
by growth in certain European markets. In addition, TRELEGY®
ELLIPTA® global net sales were $248.2 million,” stated Geoffrey
Hulme, Interim Principal Executive Officer.
Hulme continued, “At this point, the impact of the COVID-19
pandemic on the global sales of our three collaboration products is
uncertain. Based on our end-market observations, first quarter
sales levels may have benefited from unspecified levels of
increased patient inventory stocking. Also, the significant RELVAR
®/BREO ®ELLIPTA® positive prior period rebate adjustment that
occurred during the first quarter is not likely to recur in future
quarters.”
Hulme concluded, “After the end of the quarter, we were pleased
to announce the first closing of a new investment in Entasis
Therapeutics, a company focused on the development of novel
antibiotics to address multi-drug resistant gram-negative bacteria.
Antibiotic-resistant bacterial infections pose an increasing global
health risk and are creating a growing need for new treatment
options. Innoviva’s investment will help Entasis continue to
develop two antibiotics currently in phase three trials. The Armata
and Entasis transactions are part of our ongoing efforts to pursue
capital allocation options that maximize future shareholder
value.”
Recent Highlights
- GSK Net Sales:
- First quarter 2020 net sales of RELVAR®/BREO® ELLIPTA® by GSK
were $374.3 million, up 31% from $284.9 million in the first
quarter of 2019, with $147.5 million in net sales from the U.S.
market and $226.8 million from non-U.S. markets.
- First quarter 2020 net sales of ANORO® ELLIPTA® by GSK were
$151.6 million, up 15% from $131.8 million in the first quarter of
2019, with $81.8 million net sales from the U.S. market and $69.8
million from non-U.S. markets.
- First quarter 2020 net sales of TRELEGY® ELLIPTA® by GSK were
$248.2 million, up significantly from $112.7 million in the first
quarter of 2019, with $172.4 million in net sales from the U.S.
market and $75.8 million in net sales from non-U.S. markets.
- Capital Allocation:
- On April 12, 2020, Innoviva entered into a securities purchase
agreement with Entasis Therapeutics, Inc. (NASDAQ: ETTX), pursuant
to which it will purchase, upon satisfaction of certain closing
conditions, approximately $35.0 million of Entasis common stock and
warrant securities.
- During the first quarter of 2020, the Company invested $25.0
million in 8,710,800 shares of Armata’s common stock and warrants
to purchase up to an additional 8,710,800 shares of the common
stock at $2.87 per share. As of this initial investment, Innoviva
owns approximately 47% of Armata’s common stock as of March 31,
2020.
1 For TRELEGY ® ELLIPTA®, Innoviva is entitled to 15% of royalty
payments made by GSK that are assigned to TRC, LLC.
About Innoviva
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®.
ANORO®, RELVAR®, 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 impact of the COVID-19 pandemic; 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. 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, which is 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.
INNOVIVA, INC. Condensed Consolidated Statements of Income (in
thousands, except per share data) (Unaudited)
Three Months Ended
March 31,
2020
2019
Revenue: Royalty revenue from a related party, net (1)
$
78,678
$
55,183
Operating expenses: General and administrative
2,563
3,015
Total operating expenses
2,563
3,015
Income from operations
76,115
52,168
Other income, net
68
1
Interest income
1,302
975
Interest expense
(4,516
)
(4,617
)
Changes in fair values of equity investments
21,915
-
Income before income taxes
94,884
48,527
Income tax expense, net
15,932
8,508
Net income
78,952
40,019
Net income attributable to noncontrolling interest
13,515
6,229
Net income attributable to Innoviva stockholders
$
65,437
$
33,790
Basic net income per share attributable to Innoviva
stockholders
$
0.65
$
0.33
Diluted net income per share attributable to Innoviva stockholders
$
0.59
$
0.31
Shares used to compute basic net income per share
101,235
101,059
Shares used to compute diluted net income per share
113,509
113,376
(1) Total net revenue from a related party is comprised of the
following (in thousands):
Three Months Ended
March 31,
2020
2019
(unaudited)
Royalties from a related party
$
82,134
$
58,639
Amortization of capitalized fees paid to a related party
(3,456
)
(3,456
)
Royalty revenue from a related party, net
$
78,678
$
55,183
INNOVIVA, INC. Condensed Consolidated Balance Sheets (in thousands)
March 31,
December 31,
2020
2019
(unaudited)
(1)
Assets Cash, cash equivalents and marketable securities
$
383,951
$
350,845
Other current assets
82,956
80,389
Property and equipment, net
42
33
Equity investments
46,915
-
Capitalized fees paid to a related party, net
135,620
139,076
Deferred tax assets, net
138,239
154,171
Other assets
288
312
Total assets
$
788,011
$
724,826
Liabilities and stockholders’ equity Other current
liabilities
$
1,130
$
1,219
Accrued interest payable
1,668
4,152
Convertible subordinated notes, net
239,355
239,217
Convertible senior notes, net
139,797
137,903
Other long-term liabilities
192
219
Innoviva stockholders’ equity
379,543
313,495
Noncontrolling interest
26,326
28,621
Total liabilities and stockholders’ equity
$
788,011
$
724,826
(1) The selected consolidated balance sheet amounts at
December 31, 2019 are derived from audited financial statements.
INNOVIVA, INC. Cash Flows Summary (in thousands)
Three Months Ended March 31,
2020
2019
(unaudited)
Net cash provided by operating activities
$
73,481
$
76,655
Net cash provided by (used in) investing activities
16,044
(74,167
)
Net cash provided by (used in) financing activities
(15,640
)
246
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version on businesswire.com: https://www.businesswire.com/news/home/20200429005748/en/
Investors & Media: Dan Zacchei / Alex Kovtun Sloane
& Company 212-446-9500 dzacchei@sloanepr.com /
akovtun@sloanepr.com
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