Innoviva Reports Third Quarter 2021 Financial Results

October 27, 2021 4:05 PM EDT
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  • Royalties increased by 10% to $101.3 million in the third quarter of 2021, compared to the same quarter in 2020.

BURLINGAME, Calif--(BUSINESS WIRE)-- Innoviva, Inc. (NASDAQ: INVA) (“Innoviva” and “the Company”) today reported financial results for the third quarter ended September 30, 2021.

  • Gross royalty revenues of $101.3 million from Glaxo Group Limited (“GSK”) for the third quarter of 2021 included royalties of $54.1 million from global net sales of RELVAR®/BREO® ELLIPTA®, royalties of $11.6 million from global net sales of ANORO® ELLIPTA® and royalties of $35.6 million from global net sales of TRELEGY® ELLIPTA®.[1]
  • Increase in fair values of strategic equity and long term investments of $33.6 million in the third quarter of 2021 was mainly due to higher net valuation as of September 30, 2021.
  • Income from operations increased by 12% to $94.6 million, compared to the same quarter in 2020.
  • Basic and diluted net income per share attributable to Innoviva stockholders increased 3.7 and 3.5 times to $1.04 and $0.90 from $0.28 and $0.26, respectively, compared to the same quarter in 2020,
  • Net cash and cash equivalents totaled $135.1 million, and receivables from GSK totaled $101.3 million as of September 30, 2021.

Pavel Raifeld, Chief Executive Officer of Innoviva, Inc., stated, “Our royalty revenues grew 10% year over year, displaying strong positive momentum in a volatile environment.”

“RELVAR®/BREO® ELLIPTA® global net sales decreased 15% compared to the third quarter of 2020 mainly because the significant favorable prior period adjustment in the U.S. in 2020 was not repeated. Non-U.S. sales increased 4% with strong growth in Japan and the EU despite generic competition and class-wide pressures. ANORO® ELLIPTA® global net sales decreased by 2% in the third quarter of 2021 due to pandemic-driven LABA/LAMA class weakness. U.S. net sales decreased with slower new patient growth. Non-U.S. ANORO® ELLIPTA® net sales increased 8% because of meaningful growth in select markets despite class challenges. TRELEGY® ELLIPTA® global net sales increased 77% in the third quarter of 2021, driven by excellent U.S. growth for the triple therapy class and favorable prior period adjustment. Non-US TRELEGY® ELLIPTA® sales also grew as Trelegy continues to launch in new markets.”

Mr. Raifeld concluded, “We are pleased with the growth and resilience in our core royalty business. In addition, we are excited by strong progress across our asset portfolio, including recent pivotal clinical data read out at Entasis Therapeutics. Our financial performance remains robust, with basic net income per share exceeding $1 for the quarter, a nearly four-fold increase over the third quarter of 2020, supported by the recently completed equity repurchase, as we continue to focus on shareholder value creation through thoughtful capital deployment and operational excellence.”

Recent Highlights

  • GSK Net Sales:
    • Third quarter 2021 net sales of RELVAR®/BREO® ELLIPTA® by GSK were $360.6 million, down 15% from $426.0 million in the same quarter of 2020, with $146.0 million in net sales from the U.S. market and $214.6 million from non-U.S. markets.
    • Third quarter 2021 net sales of ANORO® ELLIPTA® by GSK were $179.1 million, down 2% from $182.8 million in the same quarter of 2020, with $102.0 million net sales from the U.S. market and $77.1 million from non-U.S. markets.
    • Third quarter 2021 net sales of TRELEGY® ELLIPTA® by GSK were $445.6 million, up 77% from $251.9 million in the same quarter of 2020, with $314.8 million in net sales from the U.S. market and $130.8 million in net sales from non-U.S. markets.

1 For TRELEGY ® ELLIPTA®, 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®/BREO® ELLIPTA® (fluticasone furoate/ vilanterol, “FF/VI”), ANORO® ELLIPTA® (umeclidinium bromide/ vilanterol, “UMEC/VI”) and TRELEGY® ELLIPTA® (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®/BREO® ELLIPTA® and ANORO® ELLIPTA®. 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® ELLIPTA® 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®/BREO® ELLIPTA® and ANORO® ELLIPTA®.

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®/BREO® ELLIPTA®, ANORO® ELLIPTA® and TRELEGY® ELLIPTA® 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

 

Nine Months Ended

   

September 30,

 

September 30,

     

 

2021

 

 

 

2020

 

 

 

2021

 

 

 

2020

 

Revenue:                  
     Royalty revenue from a related party, net (1)    

 $

       97,862

 

 

 $

       88,694

 

 

 $

     284,186

 

 

 $

     236,318

 

     Revenue from collaborative arrangements with a related party    

 

                    -

 

 

 

                    -

 

 

 

                    -

 

 

 

          10,000

 

Total net revenue     

 

          97,862

 

 

 

          88,694

 

 

 

        284,186

 

 

 

        246,318

 

                   
Operating expenses:                  
    Research and development    

 

               449

 

 

 

            1,010

 

 

 

               536

 

 

 

            1,569

 

 General and administrative    

 

            2,860

 

 

 

            3,254

 

 

 

          13,074

 

 

 

            8,413

 

Total operating expenses    

 

            3,309

 

 

 

            4,264

 

 

 

          13,610

 

 

 

            9,982

 

                   
Income from operations    

 

          94,553

 

 

 

          84,430

 

 

 

        270,576

 

 

 

        236,336

 

                   
Other income (expense), net    

 

             (652

)

 

 

               (13

)

 

 

          (2,036

)

 

 

                 85

 

Interest income     

 

               453

 

 

 

                 41

 

 

 

               503

 

 

 

            1,501

 

Interest expense    

 

          (4,790

)

 

 

          (4,603

)

 

 

        (14,229

)

 

 

        (13,680

)

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

 

          33,613

 

 

 

        (29,368

)

 

 

        133,973

 

 

 

          39,245

 

Income before income taxes    

 

        123,177

 

 

 

          50,487

 

 

 

        388,787

 

 

 

        263,487

 

Income tax expense, net    

 

          20,531

 

 

 

            8,866

 

 

 

          65,600

 

 

 

          44,689

 

          Net income    

 

        102,646

 

 

 

          41,621

 

 

 

        323,187

 

 

 

        218,798

 

          Net income attributable to noncontrolling interest    

 

          30,208

 

 

 

          13,403

 

 

 

          67,678

 

 

 

          48,299

 

          Net income attributable to Innoviva stockholders    

 $

       72,438

 

 

 $

       28,218

 

 

 $

     255,509

 

 

 $

     170,499

 

                   
Basic net income per share attributable to Innoviva stockholders    

 $

           1.04

 

 

 $

           0.28

 

 

 $

           2.96

 

 

 $

           1.68

 

Diluted net income per share attributable to Innoviva stockholders    

 $

           0.90

 

 

 $

           0.26

 

 

 $

           2.63

 

 

 $

           1.53

 

                   
Shares used to compute basic net income per share    

 

          69,458

 

 

 

        101,358

 

 

 

          86,298

 

 

 

        101,306

 

Shares used to compute diluted net income per share    

 

          81,699

 

 

 

        113,572

 

 

 

          98,536

 

 

 

        113,543

 

(1) Total net revenue from a related party is comprised of the following (in thousands):
     

Three Months Ended

 

Nine Months Ended

 

September 30,

September 30,

     

 

2021

 

 

 

2020

 

 

 

2021

 

 

 

2020

 

 
     

(unaudited)

 

(unaudited)

 
                     
Royalties from a related party    

 $

   101,318

 

 

 $

     92,150

 

 

 $

       294,554

 

 

 $

   246,686

 

 
Amortization of capitalized fees paid to a related party    

 

         (3,456

)

 

 

         (3,456

)

 

 

          (10,368

)

 

 

       (10,368

)

 
     Royalty revenue from a related party, net    

 $

     97,862

 

 

 $

     88,694

 

 

 $

       284,186

 

 

 $

   236,318

 

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

September 30,

 

 

December 31,

     

 

2021

 

 

 

2020

 

     

(unaudited)

 

 

 

(1)

             
Assets            
Cash, cash equivalents and marketable securities    

 $

                  135,115

   

 $

                  246,487

 

Other current assets    

 

                     101,813

   

 

                       95,571

 

Property and equipment, net      

 

                              15

   

 

                              28

 

Equity and long-term investments    

 

                     507,116

   

 

                     438,258

 

Capitalized fees paid to a related party, net    

 

                     114,885

   

 

                     125,253

 

Deferred tax assets, net    

 

                       28,159

   

 

                       93,759

 

Other assets    

 

                            136

   

 

                            214

 

          Total assets    

 $

                  887,239

   

 $

                  999,570

 

             
             
Liabilities and stockholders’ equity            
Other current liabilities     

 $

                      1,457

   

 $

                      1,958

 

Accrued interest payable    

 

                         1,668

   

 

                         4,152

 

Convertible subordinated notes, net    

 

                     240,215

   

 

                     239,783

 

Convertible senior notes, net    

 

                     152,080

   

 

                     145,734

 

Other long-term liabilities     

 

                              14

   

 

                            106

 

             
Innoviva stockholders’ equity     

 

                     402,811

   

 

                     539,912

 

Noncontrolling interest    

 

                       88,994

   

 

                       67,925

 

             
          Total liabilities and stockholders’ equity     

 $

                  887,239

   

 $

                  999,570

 

(1) The selected consolidated balance sheet amounts at December 31, 2020 are derived from audited financial
INNOVIVA, INC.
Cash Flows Summary
(in thousands)
   
 

Nine Months Ended September 30,

 

 

2021

 

 

 

2020

 

 

(unaudited)

Net cash provided by operating activities  

 $

       265,432

 

 

 $

           227,833

 

Net cash provided by investing activities  

 

            63,627

 

 

 

                     544

 

Net cash used in financing activities  

 

        (440,431

)

 

 

              (27,280

)

 

Investor & Media:
Sloane & Company
James Goldfarb
212-486-9500
jgoldfarb@sloanepr.com

Source: Innoviva, Inc.



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