- Total net revenue decreased by 4% to $64.1 million in the
second quarter of 2019, compared to the same quarter in 2018.
- Income before income taxes decreased slightly to $56.5 million
in the second quarter of 2019, compared to the same quarter in
2018.
Innoviva, Inc. (NASDAQ:INVA) (the Company) today reported
financial results for the second quarter ended June 30, 2019.
- Gross royalty revenues of $67.6 million from Glaxo Group
Limited (“GSK”) for the second quarter of 2019 included royalties
of $47.1 million from global net sales of RELVAR®/BREO® ELLIPTA®,
royalties of $10.6 million from global net sales of ANORO® ELLIPTA®
and $9.9 million from global net sales of TRELEGY® ELLIPTA®.1
- Total operating expenses for the second quarter of 2019 were
$4.3 million, compared with $4.4 million in the second quarter of
2018. Stock-based compensation for the second quarter of 2019 was
$0.5 million compared to $1.5 million for the second quarter of
2018.
- Net cash and cash equivalents, short-term investments and
marketable securities totaled $249.7 million, and royalties
receivable from GSK totaled $67.6 million, as of June 30,
2019.
“Global net sales of RELVAR®/BREO® ELLIPTA® decreased 18% versus
the second quarter of 2018. U.S. net sales declined 44% as
increased pricing discounts in the ICS/LABA sector offset volume
growth. Non-U.S. sales growth accelerated from the first quarter of
2019 and increased 13% versus the second quarter of 2018, driven by
continued market share gains in certain European markets and growth
in Japan. Non-U.S. growth was negatively impacted by foreign
currency translation; in constant exchange rates (CER),
RELVAR®/BREO® ELLIPTA® non-U.S. net sales grew 19%.”
“ANORO® ELLIPTA® global net sales decreased slightly versus the
second quarter of 2018. U.S. net sales fell 9%, compared to the
same quarter of 2018, as increased pricing pressure, a negative
inventory adjustment, and higher levels of sales through market
segments with higher rebates offset growth in the LAMA/LABA class.
Non-U.S. ANORO® ELLIPTA® net sales grew 18% year over year in the
quarter. The rate of growth increased from the first quarter of
2019 even after a negative impact from foreign currency
translation. On a CER basis, ANORO® ELLIPTA® non-U.S. net sales
grew 24%. In addition, TRELEGY® ELLIPTA global net sales were
$151.4 million,” stated Geoffrey Hulme, interim Principal Executive
Officer.
Hulme continued, “In the quarter, U.S. RELVAR®/BREO® ELLIPTA®
net sales were impacted in part by weaker pricing that occurred in
the wake of the launch of generic versions of Advair. Non-U.S. net
sales for RELVAR®/BREO® ELLIPTA® grew strongly year over year and
comprised nearly two-thirds of global net sales of RELVAR®/BREO®
ELLIPTA®.”
“During the second quarter, our core operating expenses were
similar to the levels in the first quarter. Some additional
expenses were incurred in the second quarter in the evaluation of
strategic options. The ratio of operating cash flow to net royalty
revenues remained strong. Management and the board continue to
examine potential strategic actions to maximize future shareholder
value.”
Recent Highlights
- GSK Net Sales:
- Second quarter 2019 net sales of RELVAR®/BREO® ELLIPTA® by GSK
were $313.9 million, down 18% from $383.4 million in the second
quarter of 2018, with $116.4 million in net sales from the U.S.
market and $197.5 million from non-U.S. markets.
- Second quarter 2019 net sales of ANORO® ELLIPTA® by GSK were
$163.6 million, down slightly from $163.9 million in the second
quarter of 2018, with $102.2 million net sales from the U.S. market
and $61.4 million from non-U.S. markets.
- Second quarter 2019 net sales of TRELEGY® ELLIPTA® by GSK were
$151.4 million, up significantly from $36.5 million in the second
quarter of 2018, with $109.5 million in net sales from the U.S.
market and $41.9 million in net sales from non-U.S. markets.
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 focused on royalty management.
Innoviva’s portfolio includes the 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. 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, 2018, 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 Operations (in
thousands, except per share data) (Unaudited)
Three Months Ended
Six Months Ended
June 30,
June 30,
2019
2018
2019
2018
Revenue: Royalty revenue from a related party, net (1)
$
64,107
$
67,086
$
119,290
$
119,466
Operating expenses: General and administrative
4,347
4,411
7,362
10,222
General and administrative - cash severance expenses
-
-
-
3,174
General and administrative - related party
-
-
-
2,700
Total operating expenses
4,347
4,411
7,362
16,096
Income from operations
59,760
62,675
111,928
103,370
Other income (expense), net
(8
)
39
(7
)
(3,060
)
Interest income
1,403
380
2,378
771
Interest expense
(4,661
)
(6,478
)
(9,278
)
(14,135
)
Income before income taxes
56,494
56,616
105,021
86,946
Income tax expense, net
10,433
-
18,941
-
Net income
46,061
56,616
86,080
86,946
Net income attributable to noncontrolling interest
8,321
1,990
14,550
2,739
Net income attributable to Innoviva stockholders
$
37,740
$
54,626
$
71,530
$
84,207
Basic net income per share attributable to Innoviva
stockholders
$
0.37
$
0.54
$
0.71
$
0.84
Diluted net income per share attributable to Innoviva stockholders
$
0.34
$
0.49
$
0.65
$
0.77
Shares used to compute basic net income per share
101,151
100,873
101,105
100,739
Shares used to compute diluted net income per share
113,391
113,399
113,384
113,483
(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,
2019
2018
2019
2018
(unaudited)
Royalties from a related party
$
67,563
$
70,542
$
126,202
$
126,378
Amortization of capitalized fees paid to a related party
(3,456
)
(3,456
)
(6,912
)
(6,912
)
Royalty revenue from a related party, net
$
64,107
$
67,086
$
119,290
$
119,466
INNOVIVA, INC. Condensed Consolidated Balance Sheets (in thousands)
June 30,
December 31,
2019
2018
(unaudited)
(1)
Assets Cash, cash equivalents and marketable securities
$
249,663
$
114,908
Other current assets
68,022
84,135
Property and equipment, net
136
160
Operating lease right-of-use asset
1,348
-
Capitalized fees paid to a related party, net
145,987
152,899
Deferred tax assets
177,114
196,054
Other assets
37
37
Total assets
$
642,307
$
548,193
Liabilities and stockholders’ equity Other current
liabilities
$
3,213
$
1,436
Accrued interest payable
4,262
4,264
Convertible subordinated notes, net
238,939
238,664
Convertible senior notes, net
134,239
130,734
Senior secured term loans, net
13,497
13,457
Other long-term liabilities
1,455
586
Innoviva stockholders’ equity
226,683
153,583
Noncontrolling interest
20,019
5,469
Total liabilities and stockholders’ equity
$
642,307
$
548,193
(1) The selected consolidated balance sheet amounts at December 31,
2018 are derived from audited financial statements. INNOVIVA, INC.
Cash Flows Summary (in thousands)
Six Months Ended June 30,
2019
2018
(unaudited)
Net cash provided by operating activities
$
133,151
$
101,639
Net cash provided by (used in) investing activities
(54,060
)
35,591
Net cash provided by (used in) financing activities
444
(123,340
)
View source
version on businesswire.com: https://www.businesswire.com/news/home/20190724005763/en/
Investors & Media: Dan Zacchei / Alex Kovtun Sloane
& Company 212-446-9500 dzacchei@sloanepr.com /
akovtun@sloanepr.com
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