The following excerpt is from the company's SEC filing.
Royalties increased by 44% to $104.3 million in the second quarter of 2021,
compared to the same quarter in 2020.
Repurchased GSK’s full 32% equity stake in Innoviva for $392 million
purchase price.
Strategically invested an additional $20 million into Entasis Therapeutics
Holdings Inc. (NASDAQ:ETTX), a leader in anti-infectives development.
BURLINGAME, Calif., July 28, 2021
Innoviva, Inc. (NASDAQ: INVA) (“Innoviva” and “the Company”) today reported financial results
for the second quarter ended June 30, 2021.
Gross royalty revenues of $104.3 million from Glaxo Group Limited (“GSK”)
for
the second quarter of 2021 included royalties of $65.9 million from global net sales of RELVAR
ELLIPTA
, royalties of $12.0 million from global net sales of ANORO
ELLIPTA
and royalties
of $26.4 million from global net sales of TRELEGY
Increase in fair values of strategic equity and long-term investments of
$45.3 million in the second quarter of 2021 was mainly due to higher net valuation, as of June 30, 2021.
Income before income taxes increased by 15% to $136.2 million, compared to
the same quarter in 2020.
Net cash and cash equivalents, excluding $3.2 million cash balance attributable
to a variable interest entity, totaled $40.1 million, and receivables from GSK totaled $104.3 million as of June 30, 2021.
Pavel Raifeld, Chief Executive Officer of Innoviva, Inc., stated:
“Our royalty revenues grew 44% year over year, demonstrating continued strength and resilience in the face of the pandemic.”
“RELVAR
global net sales increased meaningfully compared to the second quarter of 2020. U.S. net sales increased
significantly, driven in part by a favorable adjustment. Non-U.S. sales increased by 13% as the ICS/LABA class growth decline
was more than offset by beneficial adherence trends among existing patients. ANORO
global
net sales increased by 7% in the second quarter of 2021. U.S. net sales decreased by 3% due to negative volume dynamics.
Non-U.S.
ANORO
net
sales increased by 25% as the environment normalized. TRELEGY
global
net sales increased by 69% in the second quarter of 2021, driven by strong volume growth and a favorable adjustment in the U.S. as
well as strong launches in non-U.S. markets.”
Mr. Raifeld concluded, “Over the past quarter, we continued
to execute on our strategy of creating shareholder value through operational excellence and strategic investments, deploying in excess
of $400 million. We are pleased with the superior performance across all key aspects of our business, and we believe GSK equity stake
repurchase to be a strategically and economically attractive transaction that ushered a new chapter in our story and strongly positioned
us for continued success.”
Recent Highlights
GSK Net Sales:
Second quarter 2021 net sales of RELVAR
by GSK were $439.5 million, up 45% from $303.8 million in the same quarter of 2020, with $212.3 million in net
sales from the U.S. market and $227.2 million from non-U.S. markets.
Second quarter 2021 net sales of ANORO
by GSK were $184.0 million, up 7% from $172.3 million in the same quarter of 2020, with $106.0 million net sales from the U.S. market
and $78.0 million from non-U.S. markets.
Second quarter 2021 net sales of TRELEGY
by GSK were $405.9 million, up 69% from $240.5 million in the same quarter of 2020, with $285.5 million in net sales from the U.S. market
and $120.4 million in net sales from non-U.S. markets.
Capital Allocation:
In May 2021, the Company repurchased 32,005,260 shares of its common
stock from GSK at $12.25 per share for a total amount (including related transaction fees) of $394.1 million. The repurchased shares represented
all of GSK’s equity stake in the Company, which was approximately 32% of the Company’s shares.
During the second quarter of 2021, the Company’s wholly owned subsidiary, Innoviva
Strategic Opportunities LLC, invested $20.0 million to acquire 10 million shares of Entasis’ common stock and warrants to purchase
up to an additional 10 million shares of common stock at $2.00 per share. With this additional investment, Innoviva collectively
owned approximately 60.6% of Entasis’ common stock as of June 30, 2021 in addition to the warrants.
For TRELEGY
,
the amount represents 100% of royalty payments made by GSK to Theravance Respiratory Company, LLC (“TRC”). Innoviva owns 15%
of the economic interest in TRC.
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
(fluticasone
furoate/ vilanterol, “FF/VI”), ANORO
(umeclidinium bromide/ vilanterol, “UMEC/VI”)
and TRELEGY
(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
and ANORO
. 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
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
and 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
and TRELEGY
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, 2020 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
Six Months Ended
Revenue:
Royalty revenue from a related party, net
100,806
68,946
186,324
147,624
Revenue from collaborative arrangements with a related party
10,000
Total net revenue
78,946
157,624
Operating expenses:
Research and development
General and administrative
10,214
Total operating expenses
10,301
Income from operations
96,540
75,791
176,023
151,906
Other income (expense), net
(1,384
Interest income
Interest expense
(4,745
(4,561
(9,439
(9,077
Changes in fair values of equity and long-term investments, net
45,315
46,698
100,360
68,613
136,179
118,116
265,610
213,000
Income tax expense, net
25,333
19,891
45,069
35,823
Net income
110,846
98,225
220,541
177,177
Net income attributable to noncontrolling interest
21,898
21,381
37,470
34,896
Net income attributable to Innoviva stockholders
88,948
76,844
183,071
142,281
Basic net income per share attributable to Innoviva stockholders
Diluted net income per share attributable to Innoviva stockholders
Shares used to compute basic net income per share
88,423
101,324
94,858
101,280
Shares used to compute diluted net income per share
100,639
113,545
107,096
113,527
(1) Total net revenue from a related party is comprised of the following (in thousands):
(unaudited)
Royalties from a related party
104,262
72,402
193,236
154,536
Amortization of capitalized fees paid to a related party
(3,456
(6,912
Condensed Consolidated Balance Sheets
Assets
Cash, cash equivalents and marketable securities
43,265
246,487
Other current assets
104,996
95,571
Property and equipment, net
Equity and long-term investments
473,677
438,258
Capitalized fees paid to a related party, net
118,341
125,253
Deferred tax assets, net
48,690
93,759
Other assets
Total assets
789,150
999,570
Liabilities and stockholders’ equity
Other current liabilities
Accrued interest payable
Convertible subordinated notes, net
240,072
239,783
Convertible senior notes, net
149,917
145,734
Other long-term liabilities
Innoviva stockholders’ equity
329,780
539,912
Noncontrolling interest
63,965
67,925
Total liabilities and stockholders’ equity
(1) The
selected consolidated balance sheet amounts at December 31, 2020 are derived from audited financial statements.
Cash Flows Summary
Six Months Ended June 30,
Net cash provided by operating activities
168,721
153,275
Net cash provided by investing activities
63,627
Net cash used in financing activities
(435,570
(27,268
Investor & Media Contacts:
Sloane & Company
James Goldfarb
212-486-9500
jgoldfarb@sloanepr.com
The above information was disclosed in a filing to the SEC. To see the filing, click here.
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