INVA Innoviva Inc

Core royalty platform on track; receiving GSK royalties of $61.9 million

Achieved net product revenues of $19.1 million, representing 66% year-over-year growth driven by launch of XACDURO® and growth of key core product GIAPREZA®

Strong pipeline progress: positive Phase 3 zoliflodacin clinical trial results in uncomplicated gonorrhea highlighted at ESCMID Global 2024; on track to submit NDA in early 2025

Derek Small appointed to the Company’s Board of Directors

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 first quarter ended March 31, 2024, and highlighted select corporate achievements.

“Our first quarter financial results continue to demonstrate the successful transformation for Innoviva. We had a strong performance driven by resilient cash flows from our core GSK royalties portfolio and robust revenue growth across our commercial products marketed by IST, a leader in critical care medicine and infectious disease,” said Pavel Raifeld, Chief Executive Officer of Innoviva. “We also remain laser focused on utilizing our strong financials to drive shareholder value by continuing to exercise cost discipline, investing prudently in our strategic healthcare assets, and completing our share buyback plan.”

Matt Ronsheim, Ph.D., President of IST, noted: “Our IST platform is a powerful engine for growth anchored by a robust portfolio of differentiated life saving therapies. We are pleased with our first quarter performance, led by the strong launch of our novel therapeutic XACDURO®. Our core products GIAPREZA® and XERAVA® continue to grow, propelled by increasing awareness of our strong data underscoring the value of our products. We are also excited about our lead pipeline product, zoliflodacin, a potential first in class well tolerated oral drug for uncomplicated gonorrhea, whose Phase 3 data was highlighted in an oral presentation by our non-profit partner GARDP at ESCMID Global 2024, the largest global infectious disease congress. We remain on track to submit our New Drug Application for zoliflodacin in early 2025.”

Financial Highlights

• Royalty revenue: First quarter 2024 gross royalty revenue from Glaxo Group Limited (“GSK”) was $61.9 million, compared to $60.3 million for the first quarter of 2023.
• Net Product Sales: First quarter 2024 net product sales and license revenue were $19.1 million, which included $12.1 million from GIAPREZA®, $4.8 million from XERAVA®, and $2.2 million from XACDURO®, a 66% increase compared to $11.5 million for the first quarter of 2023.
• Equity and long-term investments: First quarter 2024 net change in fair values of equity and long-term investments of $22.0 million was primarily attributable to Armata Pharmaceuticals (“Armata”) share price appreciation.
• Net income: First quarter 2024 net income was $36.5 million, or $0.58 basic per share, compared to a net income of $34.9 million, or $0.51 basic per share, for the first quarter of 2023.
• Share repurchases: During the first quarter 2024, Innoviva repurchased 0.6 million shares of its outstanding common stock for $9.7 million. Subsequent to March 31, 2024, and through April 25, 2024, we completed the program by repurchasing 0.4 million shares for a total amount of approximately $5.3 million.
• Cash and cash equivalents: Totaled $178.4 million. Royalty and net product sales receivables totaled $76.0 million as of March 31, 2024.

Key Business and R&D Highlights

• XACDURO® (sulbactam for injection; durlobactam for injection), co-packaged for intravenous use: targeted antibacterial for patients with HABP/VABP caused by Acinetobacter
  • Following the launch in September 2023, commercial efforts continue to deliver strong performance with growing number of health systems integrating XACDURO® into their protocols.
• Zoliflodacin: a potential first-in-class, single dose, oral antibiotic in development for the treatment of patients with uncomplicated gonorrhea
  • Positive Phase 3 zoliflodacin clinical trial results highlighted in an oral presentation given by the Company’s non-profit partner, The Global Antibiotic Research & Development Partnership (GARDP), at the European Society of Clinical Microbiology and Infectious Disease Global Congress (ESCMID Global 2024).
  • The data showed that in the micro-intent-to-treat population (n=744), zoliflodacin achieved a microbiological cure rate of 90.9%, a 5.3% difference compared to ceftriaxone and azithromycin, the current global standard of care, which achieved a 96.2% cure rate (95% CI: 1.4%, 8.7%). Microbiological cure rates at extragenital sites were comparable between treatment arms (secondary endpoints). Zoliflodacin was generally well tolerated and emergent adverse events were comparable between treatment arms (46.2% vs 46.4%). No deaths or other serious adverse events were reported.
  • The Company expects a New Drug Application to be submitted to the U.S. FDA in early 2025.

Strategic Healthcare Assets

• Our portfolio of strategic assets under the Company’s various subsidiaries was valued at $628.4 million as of March 31, 2024, compared to $561.0 million as of December 31, 2023. In the first quarter 2024, Innoviva invested an additional $35.0 million in one of our assets, Armata, to help advance its lead therapeutic phage candidates. In addition, Innoviva invested an additional $5.8 million, with accrued interest, in Gate Neurosciences to support its strategy of developing next generation targeted CNS therapies, and an additional $2.7 million into ImaginAb Inc. to support its radiopharmaceutical platform.

Corporate Updates

• In April 2024, Derek Small, an accomplished biopharmaceutical entrepreneur and executive, joined the Company’s Board of Directors.
• Management will participate in the upcoming Bank of America Securities Health Care Conference, taking place on May 15, 2024, in Las Vegas. A live webcast of the Company’s corporate presentation is scheduled for 9:20 a.m. PT and can be accessed here. An archived replay will be available following the event.

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.

  INNOVIVA, INC. Condensed Consolidated Statements of Income and Comprehensive Income (in thousands, except per share data) (Unaudited)   Three Months Ended March 31,

 

2024

 

 

2023

 

Revenue: Royalty revenue, net (1)

$

58,415

 

$

56,858

 

Net product sales

 

19,084

 

 

11,514

 

License Revenue

 

-

 

 

8,000

 

Total revenue

 

77,499

 

 

76,372

 

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

 

10,971

 

 

8,749

 

Cost of license revenue

 

-

 

 

1,600

 

Selling, general and administrative

 

30,405

 

 

19,735

 

Research and development

 

3,878

 

 

12,588

 

Amortization of acquired intangible assets

 

6,440

 

 

3,805

 

Changes in fair values of equity method investments, net

 

(35,342

)

 

(15,817

)

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

 

13,335

 

 

2,164

 

Interest and dividend income

 

(4,399

)

 

(3,365

)

Interest expense

 

5,851

 

 

4,427

 

Other expense, net

 

1,236

 

 

1,346

 

Total expenses

 

32,375

 

 

35,232

 

Income before income taxes

 

45,124

 

 

41,140

 

Income tax expense

 

8,592

 

 

6,275

 

Net income and comprehensive income

$

36,532

 

$

34,865

 

  Net income per share Basic

$

0.58

 

$

0.51

 

Diluted

$

0.46

 

$

0.42

 

  Shares used to compute net income per share Basic

 

63,185

 

 

67,786

 

Diluted

 

84,531

 

 

89,788

 

(1) Total net revenue is comprised of the following (in thousands):   Three Months Ended March 31,

 

2024

 

 

2023

 

(unaudited)   Royalties

$

61,871

 

$

60,314

 

Amortization of capitalized fees

 

(3,456

)

 

(3,456

)

Royalty revenue, net

$

58,415

 

$

56,858

 

  INNOVIVA, INC. Condensed Consolidated Balance Sheets (in thousands) (unaudited)  

March 31,

December 31,

2024

2023

Assets Cash and cash equivalents

$

178,357

$

193,513

Royalty and product sale receivables

 

76,010

 

84,075

Inventory, net

 

37,437

 

40,737

Prepaid expense and other current assets

 

19,538

 

25,894

Property and equipment, net

 

324

 

483

Equity and long-term investments

 

628,437

 

560,978

Capitalized fees

 

80,328

 

83,784

Right-of-use assets

 

2,269

 

2,536

Goodwill

 

17,905

 

17,905

Intangible assets

 

223,895

 

230,335

Other assets

 

3,112

 

3,267

Total assets

$

1,267,612

$

1,243,507

    Liabilities and stockholders’ equity Other current liabilities

$

28,059

$

33,435

Accrued interest payable

 

833

 

3,422

Deferred revenues

 

987

 

1,277

Convertible senior notes, due 2025, net

 

191,476

 

191,295

Convertible senior notes, due 2028, net

 

255,283

 

254,939

Other long term liabilities

 

71,686

 

71,870

Deferred tax liabilities

 

3,807

 

563

Income tax payable - long term

 

11,800

 

11,751

Innoviva stockholders’ equity

 

703,681

 

674,955

Total liabilities and stockholders’ equity

$

1,267,612

$

1,243,507

  INNOVIVA, INC. Cash Flows Summary (in thousands) (unaudited)   Three Months Ended March 31,

 

2024

 

 

2023

 

Net cash provided by operating activities

$

37,047

 

$

25,684

 

Net cash used in investing activities

 

(43,038

)

 

(35,722

)

Net cash used in financing activities

 

(9,165

)

 

(136,962

)

Net change

$

(15,156

)

$

(147,000

)

Cash and cash equivalents at beginning of period

 

193,513

 

 

291,049

 

Cash and cash equivalents at end of period

$

178,357

 

$

144,049

 

 

View source version on businesswire.com: https://www.businesswire.com/news/home/20240508594441/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