- Royalties increased by 7% to $72.4 million in the second
quarter of 2020, compared to the same quarter in 2019.
- Pavel Raifeld named as Chief Executive Officer.
- Invested $35 million into common stock and warrants of Entasis
Therapeutics Holding Inc. (NASDAQ: ETTX), a leader in
anti-infectives development.
Innoviva, Inc. (NASDAQ: INVA) (the Company) today reported
financial results for the second quarter ended June 30, 2020.
- Gross royalty revenues of $72.4 million from Glaxo Group
Limited (“GSK”) for the second quarter of 2020 included royalties
of $45.6 million from global net sales of RELVAR®/BREO® ELLIPTA®,
royalties of $11.2 million from global net sales of ANORO® ELLIPTA®
and royalties of $15.6 million from global net sales of TRELEGY®
ELLIPTA®.1
- Changes in fair values of equity investments of $46.7 million
reflected the unrealized gains of $13.4 million related to our
investment in Armata Pharmaceuticals Inc. and $33.3 million related
to our investment in Entasis Therapeutics Holdings, Inc.
- Income before income taxes increased by 109% to $118.1 million,
compared to the same quarter in 2019.
- Net cash and cash equivalents, short-term investments and
marketable securities, excluding $4.9 million cash balance
attributable to a variable interest entity, totaled $412.2 million,
and receivables from GSK totaled $82.4 million, as of June 30,
2020.
Pavel Raifeld, Chief Executive Officer, stated: “RELVAR®/BREO®
ELLIPTA® global 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.
ANORO® ELLIPTA® global 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® ELLIPTA® net 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.”
Recent Highlights
- GSK Net Sales:
- Second quarter 2020 net sales of RELVAR®/BREO® ELLIPTA® by GSK
were $303.8 million, down 3% from $313.9 million in the second
quarter of 2019, with $103.3 million in net sales from the U.S.
market and $200.5 million from non-U.S. markets.
- Second quarter 2020 net sales of ANORO® ELLIPTA® by GSK were
$172.3 million, up 5% from $163.6 million in the second quarter of
2019, with $109.8 million net sales from the U.S. market and $62.5
million from non-U.S. markets.
- Second quarter 2020 net sales of TRELEGY® ELLIPTA® by GSK were
$240.5 million, up significantly from $151.4 million in the second
quarter of 2019, with $174.8 million in net sales from the U.S.
market and $65.7 million in net sales from non-U.S. markets.
- Capital Allocation:
- During the second quarter of 2020, the Company invested $35.0
million in 14.0 million shares of common stock of Entasis
Therapetutics, Inc., a company focused on development of novel
anti-bacterial therapies for multi-drug resistant Gram-negative
bacteria, which pose well acknowledged public health risk and a
rapidly growing medical need, and warrants to purchase up to an
additional 14.0 million shares of the common stock at $2.50 per
share. With this initial investment, Innoviva owned approximately
51% of Entasis’s common stock as of June 30, 2020. Innoviva has a
right to designate two members to Entasis’s board.
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 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.
INNOVIVA, INC. Condensed Consolidated Statements of Income (in
thousands, except per share data) (Unaudited) Three Months
Ended Six Months Ended June 30, 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 Six Months
Ended June 30, 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
INNOVIVA, INC. Condensed Consolidated Balance Sheets (in thousands)
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 statements.
INNOVIVA, INC. Cash Flows Summary (in thousands) 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
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version on businesswire.com: https://www.businesswire.com/news/home/20200729005918/en/
Investor & Media Contacts: Dan Zacchei / Alex Kovtun
Sloane & Company 212-486-9500 dzacchei@sloanepr.com /
akovtun@sloanepr.com
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