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Innoviva Reports Third Quarter 2024 Financial Results; Highlights Recent Company Progress

INVA 11.06.2024

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Drug:zoliflodacin-unknown zoliflodacin

Drug:XACDURO-unknown XACDURO®

Drug:GIAPREZA-unknown GIAPREZA®

Drug:XERAVA-unknown XERAVA®

Diseases:uncomplicated gonorrhea

Diseases:hospital-acquired bacterial pneumonia and ventilator-associated bacterial pneumonia

Date of Upcoming Event:2024-09-01

Name of Upcoming Event:2024 Sexually Transmitted Infections Prevention Conference

Date of Upcoming Event:2024-10-01

Name of Upcoming Event:IDWeek 2024

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Core royalty platform continued strong performance, receiving GSK royalties of$60.5 millionwith 6% year-over-year growth

Innoviva Specialty Therapeutics’ (IST) marketed portfolio achievedU.S.net product sales of$19.7 million, reflecting 68% year-over-year growth

BURLINGAME, Calif.--(BUSINESS WIRE)--Nov. 6, 2024--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 third quarter endedSeptember 30, 2024, and highlighted select corporate achievements.

“For the third quarter of 2024, we continue to deliver strong revenue growth, with solid performance from our core GSK royalty assets, and accelerating sales from our IST commercial products, GIAPREZA^®, XACDURO^®and XERAVA^®. Since the formation of IST, now in its second year of operation, we have shown consistent sales expansion in our commercial products, primarily driven by increasing product demand, validating our investment in hospital-based therapeutics,” saidPavel Raifeld, Chief Executive Officer ofInnoviva. “Of special note, XACDURO^®was nominated for the Best Biotechnology Product byThe Galien Foundation USAin recognition of its pioneering science and positive impact on patients. We are proud of this recognition which highlights the commitment and innovation we are bringing to this space, where there is significant unmet medical need and an immense demand for new drugs. We also continue to further advance our pipeline and are on track to submit a New Drug Application (“NDA”) for zoliflodacin, potentially first in class, single dose oral drug for the treatment of uncomplicated gonorrhea, to theU.S.FDA in early 2025.”

Mr. Raifeldcontinued, “Over the past quarter, we also saw meaningful operational progress across our strategic healthcare assets. We remain focused on prudent capital allocation in our quest to maximize shareholder value and see multiple opportunities for continued value creation.”

Financial Highlights

Royalty revenue:Third quarter 2024 gross royalty revenue fromGlaxo Group Limited(“GSK”) was$60.5 million, compared to$57.0 millionfor the third quarter 2023.
Net Product Sales:Third quarter 2024 net product sales were$27.8 million, which includedU.S.net product sales of$19.7 millionand ex-U.S.product sales of$8.1 million.U.S.net product sales consisted of$13.1 millionfrom GIAPREZA^®,$2.3 millionfrom XERAVA^®, and$4.3 millionfrom XACDURO^®, a 68% increase compared to$11.8 millionfor the third quarter 2023.
License Revenue:Third quarter 2024 license revenue of$4.6 millionincluded product development cost-sharing reimbursements from our partner.
Equity and long-term investments:Third quarter 2024 unfavorable net change in fair value of equity and long-term investments of$35.2 millionwas primarily due to lower share price of Armata Pharmaceuticals (“Armata”).
Net income: Net income of$1.2 million, or$0.02basic per share, for the third quarter of 2024, compared to a net income of$82.0 million, or$1.26basic per share, for the third quarter of 2023.
Cash and cash equivalents: Totaled$260.6 million. Royalty and product sales receivables totaled$91.1 millionas ofSeptember 30, 2024.

Key Business and R&D Highlights

XACDURO^®(sulbactam for injection; durlobactam for injection), co-packaged for intravenous use, a targeted antibacterial treatment for patients with hospital-acquired bacterial pneumonia and ventilator-associated bacterial pneumonia (HABP/VABP) caused by susceptible isolates ofAcinetobacter baumannii-calcoaceticuscomplex.
- XACDURO^®was recently nominated for the 2024Prix Galien USAAward for Best Biotechnology Product, which recognizes excellence in scientific innovation that improves the state of human health.
Zoliflodacin: a potential first-in-class, single dose, oral antibiotic is currently being developed in partnership withThe Global Antibiotic Research & Development Partnership("GARDP") for the treatment of patients with uncomplicated gonorrhea.
- InSeptember 2024, we presented additional findings on our investigational agent zoliflodacin at the 2024Sexually Transmitted Infections Prevention ConferenceinAtlanta. The first oral presentation demonstrated that zoliflodacin had potentin vitroactivity against 200 clinical isolates, consistent with previousU.S.surveillance data. The second presentation demonstrated that microbiological cure rates for specific subgroups were comparable to the primary endpoint analysis. Safety in these subgroups was also comparable.
- InOctober 2024, we had five presentations at IDWeek 2024, which took place inLos Angeles. One oral presentation on zoliflodacin included a review of the unique public-private partnership that led the clinical development of zoliflodacin. The second presentation highlighted the activity of sulbactam-durlobactam and standard-of-care antibiotics againstAcinetobacter baumannii-calcoaceticuscomplex for hospitalized patients in theU.S.Three posters were presented including two on zoliflodacin:In vitroactivity against baseline isolates inU.S.participants from the phase 3 trial and a pharmacometrics analysis supporting dose selection. Surveillance data of eravacycline against clinical pathogens, collected worldwide from multiple infections sites during 2018-2022 was also presented.
- We continue to advance zoliflodacin following its successful Phase 3 clinical trial results and expect to submit an NDA to theU.S.FDA in early 2025.

AboutInnoviva

Innovivais 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 withGlaxo Group Limited(“GSK”).Innovivais 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 ofEntasis 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 ofAcinetobacter baumannii-calcoaceticuscomplex and the investigational zoliflodacin currently being developed for the treatment of uncomplicated gonorrhea, andLa 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.Innovivaintends 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 ofInnovivaas 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 ofInnovivato 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 ofInnoviva(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 affectingInnovivaare 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 endedDecember 31, 2023and Quarterly Reports on Form 10-Q, which are on file with theSecurities and Exchange Commission(“SEC”) and available on the SEC’s website atwww.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, andInnovivaassumes 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						Nine Months Ended
	September 30,						September 30,
		2024			2023			2024			2023
Revenue:
Royalty revenue, net (1)	$	57,056		$	53,558		$	179,213		$	172,681
Net product sales		27,822			13,701			68,557			40,942
License revenue		4,630			-			19,135			11,000
Total revenue		89,508			67,259			266,905			224,623
Expenses:
Cost of products sold (inclusive of amortization of inventory fair value adjustments)		9,990			10,182			29,433			27,910
Cost of license revenue		-			-			-			1,600
Selling, general and administrative		26,219			28,636			84,364			71,913
Research and development		3,551			3,989			9,989			31,566
Amortization of acquired intangible assets		6,511			6,511			19,391			15,274
Changes in fair values of equity method investments, net		18,231			(71,980	)		42,997			(67,886	)
Changes in fair values of equity and long-term investments, net		16,936			2,640			60,827			4,887
Interest and dividend income		(5,500	)		(4,114	)		(13,373	)		(11,032	)
Interest expense		5,807			4,396			17,460			13,205
Other expense, net		914			1,047			3,123			4,289
Total expenses, net		82,659			(18,693	)		254,211			91,726
Income before income taxes		6,849			85,952			12,694			132,897
Income tax expense, net		5,636			3,906			9,634			14,706
Net income and comprehensive income	$	1,213		$	82,046		$	3,060		$	118,191

Net income per share
Basic	$	0.02		$	1.26		$	0.05		$	1.79
Diluted	$	0.02		$	0.98		$	0.05		$	1.45

Shares used to compute net income per share
Basic		62,569			64,953			62,759			66,016
Diluted		62,951			86,164			63,020			87,504

(1) Total net revenue is comprised of the following (in thousands):

	Three Months Ended						Nine Months Ended
	September 30,						September 30,
		2024			2023			2024			2023
	(unaudited)						(unaudited)

Royalties	$	60,512		$	57,014		$	189,581		$	183,049
Amortization of capitalized fees		(3,456	)		(3,456	)		(10,368	)		(10,368	)
Royalty revenue, net	$	57,056		$	53,558		$	179,213		$	172,681

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

	September 30,		December 31,
		2024		2023
Assets
Cash and cash equivalents	$	260,630	$	193,513
Royalty and product sale receivables		91,058		84,075
Inventory		34,236		40,737
Prepaid expense and other current assets		14,697		25,894
Property and equipment, net		544		483
Equity and long-term investments		507,718		560,978
Capitalized fees paid, net		73,416		83,784
Right-of-use assets		2,789		2,536
Goodwill		17,905		17,905
Intangible assets		210,944		230,335
Deferred tax asset, net		14,875		-
Other assets		2,800		3,267
Total assets	$	1,231,612	$	1,243,507


Liabilities and stockholders’ equity
Other current liabilities	$	30,357	$	33,435
Accrued interest payable		833		3,422
Deferred revenue		717		1,277
Convertible senior notes, due 2025, net		191,843		191,295
Convertible senior notes, due 2028, net		255,972		254,939
Other long-term liabilities		71,449		71,870
Deferred tax liabilities, net		-		563
Income tax payable, long-term		11,899		11,751
Innovivastockholders’ equity		668,542		674,955
Total liabilities and stockholders’ equity	$	1,231,612	$	1,243,507

INNOVIVA, INC.
Cash Flows Summary
(in thousands)
(unaudited)

	Nine Months Ended
	September 30,
		2024			2023
Net cash provided by operating activities	$	129,451		$	107,808
Net cash used in investing activities		(48,308	)		(61,610	)
Net cash used in financing activities		(14,026	)		(157,250	)
Net change		67,117			(111,052	)
Cash and cash equivalents at beginning of period		193,513			291,049
Cash and cash equivalents at end of period	$	260,630		$	179,997

View source version onbusinesswire.com:https://www.businesswire.com/news/home/20241106330461/en/

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

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

Source:Innoviva, Inc.

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