- Royalties increased by 33% to $92.2 million in the third
quarter of 2020, compared to the same quarter in 2019.
- Invested an additional $12.5 million into the 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 third quarter ended September 30,
2020.
- Gross royalty revenues of $92.2 million from Glaxo Group
Limited (“GSK”) for the third quarter of 2020 included royalties of
$63.9 million from global net sales of RELVAR®/BREO® ELLIPTA®,
royalties of $11.9 million from global net sales of ANORO® ELLIPTA®
and royalties of $16.4 million from global net sales of TRELEGY®
ELLIPTA®.1
- Decrease in fair values of equity investments of $29.4 million
was mainly due to the lower stock prices of Armata Pharmaceuticals
Inc. and Entasis Therapeutics Holdings, Inc. as of September 30,
2020.
- Income before income taxes decreased by 12% to $50.5 million,
compared to the same quarter in 2019.
- Net cash and cash equivalents, short-term investments and
marketable securities, excluding $4.3 million cash balance
attributable to a variable interest entity, totaled $474.9 million,
and receivables from GSK totaled $92.2 million, as of September 30,
2020.
Pavel Raifeld, Chief Executive Officer of Innoviva, Inc.,
stated: “RELVAR®/BREO® ELLIPTA® global 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.
ANORO® ELLIPTA® global 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
value creation.”
Recent Highlights
- GSK Net Sales:
- Third quarter 2020 net sales of RELVAR®/BREO® ELLIPTA® by GSK
were $426.0 million, up 38% from $309.5 million in the third
quarter of 2019, with $219.2 million in net sales from the U.S.
market and $206.8 million from non-U.S. markets.
- Third quarter 2020 net sales of ANORO® ELLIPTA® by GSK were
$182.8 million, up 3% from $177.7 million in the third quarter of
2019, with $111.5 million net sales from the U.S. market and $71.3
million from non-U.S. markets.
- Third quarter 2020 net sales of TRELEGY® ELLIPTA® by GSK were
$251.9 million, up 46% from $172.8 million in the third quarter of
2019, with $165.3 million in net sales from the U.S. market and
$86.6 million in net sales from non-U.S. markets.
- Capital Allocation:
- During the third quarter of 2020, the Company invested
additional $12.5 million in 4.7 million shares of common stock of
Entasis Therapeutics, 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 4.7 million shares of the common stock at
$2.675 per unit. With this additional investment, Innoviva owned
approximately 52.6% of Entasis’ outstanding common stock as of
September 30, 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 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
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
INNOVIVA, INC. Condensed Consolidated Balance Sheets (in thousands)
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.
INNOVIVA, INC. Cash Flows Summary (in thousands)
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)
View source
version on businesswire.com: https://www.businesswire.com/news/home/20201028006185/en/
Investor & Media Contacts: Dan Zacchei / Alex Kovtun
Sloane & Company 212-486-9500 dzacchei@sloanepr.com /
akovtun@sloanepr.com
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