The following excerpt is from the company's SEC filing.
Closes $250 Million Term B Loan
Refinancing plan expected to reduce the associated current cash interest expense by nearly one-half
Brisbane, Calif. August 21, 2017
Innoviva, Inc. (Innoviva or the Company) (NASDAQ: INVA) today announced the closing of a $250 million Term B Loan (the Term B Loan), the proceeds of which were used to repay the remaining balance of the Companys LABA PhaRMA
9.0% fixed rate term notes due 2029 (the 2029 Notes). The closing of the Term B Loan follows the previously announced closing on August 7, 2017 of the Companys offering of 2.50% convertib le senior notes due 2025 (the 2025 Notes) for gross proceeds of $192.5 million in aggregate principal. The proceeds from these financings provided the Company with the capital to fully refinance the 2029 Notes, which is expected to substantially reduce Innovivas interest expenses, by lowering the Companys current total weighted average interest cost to approximately 3.6% per annum.
The Term B Loan will mature in August 2022, bears interest at a rate equal to LIBOR plus 4.5% (or, at the Companys option, a certain alternate base rate plus 3.5%) and requires a 10% minimum annual principal repayment. The Company and the Term B Loan received ratings from Standard & Poors of B+ and BB respectively with a stable outlook, and from Moodys of B3 and Ba3 respectively with a stable outlook. The Term B Loan was led by Morgan Stanley Senior Funding, Inc. as administrative agent, collateral agent, sole lead arranger and joint bookrunner and Merrill Lynch, Pierce, Fenner & Smith Incorporated as joint bookrunner.
The refinancing of Innovivas 2029 Notes has long been an important part of our strategy for dramatically reducing expenses,
said Michael W. Aguiar, President and Chief Executive Officer of Innoviva. As a result of this refinancing, based on todays rates, we have reduced our largest expense by more than $18 million on an annual run-rate basis, which we believe will increase our operating flexibility and illustrates our ongoing commitment to maximizing shareholder value.
Innoviva is focused on bringing compelling new medicines to patients in areas of unmet need by leveraging its significant expertise in the development, commercialization and financial management of bio-pharmaceuticals. Innovivas portfolio is anchored by the respiratory assets partnered with Glaxo Group Limited (GSK), including RELVAR®/BREO® ELLIPTA® and ANORO® ELLIPTA®, which were jointly developed by Innoviva and GSK. Under the agreement with GSK, Innoviva is eligible to receive associated royalty revenues from RELVAR®/BREO® ELLIPTA®, ANORO® ELLIPTA®. In addition, Innoviva retains a 15 percent economic interest in future payments made by GSK for earlier-stage programs partnered with Theravance BioPharma, Inc., including the closed triple combination therapy for Chronic Obstructive Pulmonary Disease (COPD). For more information, please visit Innovivas website at www.inva.com.
ANORO®, RELVAR®, BREO® and ELLIPTA® are trademarks of the GlaxoSmithKline group of companies.
Cautionary Note on Forward-Looking Statements
To the extent that statements contained in this press release are not descriptions of historical facts, they are forward-looking statements reflecting the current beliefs and expectations of management made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995, as amended. Forward-looking statements include any statements regarding Innovivas anticipated use of proceeds, its expected cost-savings and operating expenses, and any other statements containing the words anticipate, believe, estimate, expect, intend, may, plan, predict, project, target, potential, will, would, could, should, continue, and similar expressions. Such forward-looking statements involve substantial risks and uncertainties that could cause the Companys future results, performance or achievements to differ significantly from those expressed or implied by the forward-looking statements. The Company undertakes no obligation to update or revise any forward-looking statements. Forward-looking statements should not be relied upon as representing the Companys views as of any date subsequent to the date hereof. For a further description of the risks and uncertainties that could cause actual results to differ from those expressed in these forward-looking statements, as well as risks relating to the Companys business in general, see the Risk Factors section of the Companys Quarterly Report on Form 10-Q filed with the Securities and Exchange Commission (SEC) on Form 10-K for the year ended December 31, 2016 and Innovivas Quarterly Report on Form 10-Q for the quarter ended June 30, 2017, which are on file with the SEC and available on the SECs website at www.sec.gov. In addition to the risks described above and in Innovivas other filings with the SEC, other unknown or unpredictable factors also could affect Innovivas results. 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.
Senior Vice President and Chief Financial Officer
The above information was disclosed in a filing to the SEC. To see the filing, click here.
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Other recent filings from the company include the following: