INVA Innoviva Inc

Core royalty platform continued strong performance, receiving GSK royalties of $67.2 million

Innoviva Specialty Therapeutics’ (IST) marketed portfolio grew 38% year-over-year, achieving net product sales of $21.7 million

Important treatment guidelines and guidance updates recognized our key products: XACDURO® by 2024 Infectious Diseases Society of America (IDSA); XERAVA® by 2024 Surgical Infection Society

XACDURO® approved in China

Innoviva, Inc. (NASDAQ: INVA) (“Innoviva” or the “Company”), a diversified holding company with a core royalties portfolio, a leading critical care and infectious disease platform known as Innoviva Specialty Therapeutics (“IST”), and a portfolio of strategic investments in healthcare assets, today reported financial results for the second quarter ended June 30, 2024, and highlighted select corporate achievements.

“Our robust second quarter continues to demonstrate the successful transformation of Innoviva. We have strong performance across multiple fronts, driven by our core GSK royalties portfolio and accelerating growth from our commercial products, GIAPREZA®, XACDURO® and XERAVA®,” said Pavel Raifeld, Chief Executive Officer of Innoviva. “We remain committed to enhancing shareholder value through thoughtful capital allocation and operational excellence. We also are excited about our portfolio of strategic healthcare assets, where we continue to see potential for significant value creation.”

Mr. Raifeld added, “In addition to driving strong operational delivery from our critical care and infectious disease platform IST, we continue to expand its global footprint and enhance recognition. Our partner in China, Zai Lab, successfully obtained regulatory approval for XACDURO®, bringing us closer to making XACDURO® available to all patients globally. In the U.S, important treatment guidelines and guidance updates recognized our key products, underscoring their life-saving potential. XACDURO® was named the preferred agent for treatment of Carbapenem-resistant Acinetobacter baumannii infections in the 2024 Infectious Diseases Society of America (IDSA) treatment guidance. XERAVA® is recommended by the 2024 Surgical Infection Society (SIS) treatment guidelines for empiric therapy in the management of complicated intra-abdominal infection.”

Financial Highlights

• Royalty revenue: Second quarter 2024 gross royalty revenue from Glaxo Group Limited (“GSK”) was $67.2 million, compared to $65.7 million for the second quarter 2023.
• Net Product Sales: Second quarter 2024 net product sales were $21.7 million, which included $13.1 million from GIAPREZA®, $6.2 million from XERAVA®, and $2.4 million from XACDURO®, a 38% increase compared to $15.7 million for the second quarter 2023.
• License Revenue: Second quarter 2024 license revenue of $14.5 million included an $8 million milestone payment from our partner for the regulatory approval of XACDURO® in China and $6.5 million in non-recurring cost-sharing reimbursements from our partner for product development.
• Equity and long-term investments: Second quarter 2024 net unfavorable change in fair values of equity and long-term investments of $90.7 million was primarily attributable to lower share price of Armata Pharmaceuticals (“Armata”), despite continued operational progress.
• Net income: The change in fair values of our investments negatively impacted second quarter 2024 earnings, resulting in a net loss of $34.7 million, or ($0.55) basic per share, compared to a net income of $1.3 million, or $0.02 basic per share, for the second quarter of 2023.
• Share repurchases: During the second quarter 2024, Innoviva completed its $100 million share repurchase program by repurchasing 0.4 million shares, for a total amount of approximately $5.3 million.
• Cash and cash equivalents: Totaled $217.0 million. Royalty and net product sales receivables totaled $94.0 million as of June 30, 2024.

Key Business and R&D Highlights

• XACDURO® (sulbactam for injection; durlobactam for injection), co-packaged for intravenous use: targeted antibacterial for the treatment of patients with hospital-acquired bacterial pneumonia and ventilator-associated bacterial pneumonia (HABP/VABP) caused by susceptible isolates of Acinetobacter baumannii calcoaceticus complex.
  • In May 2024, XACDURO® was approved in China by the National Medical Products Administration (NMPA) for use in Chinese patients 18 years of age and older.
  • In July 2024, XACDURO® was named as the preferred agent for the treatment of Carbapenem-resistant Acinetobacter baumannii infections, in combination with a carbapenem, in the updated 2024 IDSA treatment guidance.
  • The World Health Organization considers Acinetobacter a top-priority pathogen worldwide that needs novel antibiotics1.
• XERAVA® (eravacycline), for injection is indicated for the treatment of complicated intra-abdominal infections (cIAI) caused by susceptible microorganisms in patients 18 years or older.
  • In July 2024, XERAVA® was named as a recommended agent for empiric therapy in the updated 2024 SIS treatment guidelines for the management of complicated intra-abdominal infections. SIS also recommended XERAVA® be reserved for high-risk patients.
• Zoliflodacin: a potential first-in-class, single dose, oral antibiotic in development for the treatment of patients with uncomplicated gonorrhea is currently being developed in partnership with The Global Antibiotic Research & Development Partnership (GARDP).
  • Zoliflodacin has successfully completed Phase 3 clinical trials and the results were reported at ESCMID Global 2024. The Company expects to submit an NDA to the U.S. FDA in early 2025.

About Innoviva

Innoviva is a diversified holding company with a core royalties portfolio, a leading critical care and infectious disease platform known as Innoviva Specialty Therapeutics (“IST”), and a portfolio of strategic investments in healthcare assets. Innoviva’s royalty portfolio includes respiratory assets partnered with Glaxo Group Limited (“GSK”). Innoviva is entitled to receive royalties from GSK on sales of RELVAR®/BREO® ELLIPTA® and ANORO® ELLIPTA®. Innoviva’s other innovative healthcare assets include infectious disease and critical care assets stemming from acquisitions of Entasis Therapeutics, including XACDURO® (sulbactam for injection; durlobactam for injection), co-packaged for intravenous use approved for the treatment of adults with hospital-acquired bacterial pneumonia and ventilator-associated bacterial pneumonia caused by susceptible strains of Acinetobacter baumannii-calcoaceticus complex and the investigational zoliflodacin currently being developed for the treatment of uncomplicated gonorrhea, and La Jolla Pharmaceutical Company, including GIAPREZA® (angiotensin II), approved to increase blood pressure in adults with septic or other distributive shock and XERAVA® (eravacycline) for the treatment of complicated intra-abdominal infections in adults.

ANORO®, RELVAR® and BREO® are trademarks of the GSK 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®, GIAPREZA®, XERAVA® and XACDURO® 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); 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”); the timing, manner and amount of capital deployment, including potential capital returns to stockholders; and risks related to the Company’s growth strategy. 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, 2023 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.

References

(1) Tala, B., Jad, A., Claude, A., Jihad, I., Chantal, L., Rakan, N.,& Eid, A. (2017). Risk Factors, Clinical Presentation, and Outcome of Acinetobacter baumannii Bacteremia. Front. Cell. Infect. Microbiol., 04 May 2017, Sec. Molecular Bacterial Pathogenesis Volume 7 – 2017: https://doi.org/10.3389/fcimb.2017.00156

INNOVIVA, INC. Condensed Consolidated Statements of Income and Comprehensive Income (in thousands, except per share data) (unaudited)   Three Months Ended Six Months Ended June 30, June 30,

 

 

 

2024

 

 

 

2023

 

 

 

2024

 

 

 

2023

 

Revenue: Royalty revenue, net (1)

$

63,742

 

$

62,265

 

$

122,157

 

$

119,123

 

Net product sales

 

21,651

 

 

15,727

 

 

40,735

 

 

27,241

 

License revenue

 

14,505

 

 

3,000

 

 

14,505

 

 

11,000

 

Total revenue

 

99,898

 

 

80,992

 

 

177,397

 

 

157,364

 

Expenses: Cost of products sold (inclusive of amortization of inventory fair value adjustments)

 

8,472

 

 

8,979

 

 

19,443

 

 

17,728

 

Cost of license revenue

 

-

 

 

-

 

 

-

 

 

1,600

 

Selling, general and administrative

 

27,740

 

 

23,542

 

 

58,145

 

 

43,277

 

Research and development

 

2,560

 

 

14,989

 

 

6,438

 

 

27,577

 

Amortization of acquired intangible assets

 

6,440

 

 

4,958

 

 

12,880

 

 

8,763

 

Changes in fair values of equity method investments, net

 

60,108

 

 

19,911

 

 

24,766

 

 

4,094

 

Changes in fair values of equity and long-term investments, net

 

30,556

 

 

83

 

 

43,891

 

 

2,247

 

Interest and dividend income

 

(3,474

)

 

(3,553

)

 

(7,873

)

 

(6,918

)

Interest expense

 

5,802

 

 

4,382

 

 

11,653

 

 

8,809

 

Other expense, net

 

973

 

 

1,896

 

 

2,209

 

 

3,242

 

Total expenses, net

 

139,177

 

 

75,187

 

 

171,552

 

 

110,419

 

Income (loss) before income taxes

 

(39,279

)

 

5,805

 

 

5,845

 

 

46,945

 

Income tax expense (benefit), net

 

(4,594

)

 

4,525

 

 

3,998

 

 

10,800

 

Net income (loss) and comprehensive income (loss)

$

(34,685

)

$

1,280

 

$

1,847

 

$

36,145

 

  Net income (loss) per share Basic

$

(0.55

)

$

0.02

 

$

0.03

 

$

0.54

 

Diluted

$

(0.55

)

$

0.02

 

$

0.03

 

$

0.46

 

  Shares used to compute net income (loss) per share Basic

 

62,526

 

 

65,341

 

 

62,856

 

 

66,557

 

Diluted

 

62,526

 

 

65,489

 

 

63,064

 

 

88,175

 

(1) Total net revenue is comprised of the following (in thousands):   Three Months Ended Six Months Ended June 30, June 30,

 

 

 

2024

 

 

 

2023

 

 

 

2024

 

 

 

2023

 

(unaudited) (unaudited)   Royalties

$

67,198

 

$

65,721

 

$

129,069

 

$

126,035

 

Amortization of capitalized fees

 

(3,456

)

 

(3,456

)

 

(6,912

)

 

(6,912

)

Royalty revenue, net

$

63,742

 

$

62,265

 

$

122,157

 

$

119,123

 

  INNOVIVA, INC. Condensed Consolidated Balance Sheets (in thousands) (unaudited)   June 30, December 31,

2024

2023

Assets Cash and cash equivalents

$

217,003

$

193,513

Royalty and product sale receivables

 

93,980

 

84,075

Inventory

 

36,664

 

40,737

Prepaid expense and other current assets

 

10,630

 

25,894

Property and equipment, net

 

427

 

483

Equity and long-term investments

 

536,435

 

560,978

Capitalized fees paid, net

 

76,872

 

83,784

Right-of-use assets

 

3,118

 

2,536

Goodwill

 

17,905

 

17,905

Intangible assets

 

217,455

 

230,335

Deferred tax asset, net

 

11,446

 

-

Other assets

 

2,982

 

3,267

Total assets

$

1,224,917

$

1,243,507

    Liabilities and stockholders’ equity Other current liabilities

$

23,929

$

33,435

Accrued interest payable

 

3,422

 

3,422

Deferred revenue

 

855

 

1,277

Convertible senior notes, due 2025, net

 

191,659

 

191,295

Convertible senior notes, due 2028, net

 

255,623

 

254,939

Other long-term liabilities

 

72,065

 

71,870

Deferred tax liabilities, net

 

-

 

563

Income tax payable, long-term

 

11,849

 

11,751

Innoviva stockholders’ equity

 

665,515

 

674,955

Total liabilities and stockholders’ equity

$

1,224,917

$

1,243,507

INNOVIVA, INC. Cash Flows Summary (in thousands) (unaudited)   Six Months Ended June 30,

 

 

2024

 

 

 

2023

 

Net cash provided by operating activities

$

80,765

 

$

63,866

 

Net cash used in investing activities

 

(43,038

)

 

(35,722

)

Net cash used in financing activities

 

(14,237

)

 

(146,168

)

Net change

$

23,490

 

$

(118,024

)

Cash and cash equivalents at beginning of period

 

193,513

 

 

291,049

 

Cash and cash equivalents at end of period

$

217,003

 

$

173,025

 

 

View source version on businesswire.com: https://www.businesswire.com/news/home/20240731216589/en/

Innoviva, Inc. David Patti Corporate Communications (908) 421-5971 david.patti@inva.com

Investors and Media: Argot Partners (212) 600-1902 innoviva@argotpartners.com