Innoviva Reports Fourth Quarter 2019 Financial Results
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Total net revenue decreased by 4.9% to
$76.0 million in the fourth quarter of 2019, compared to the same quarter in 2018. -
Income before income taxes decreased by 3.9% to
$70.3 million in the fourth quarter of 2019, compared to the same quarter in 2018.
-
Gross royalty revenues of
$79.4 million fromGlaxo Group Limited (“GSK”) for the fourth quarter of 2019 included royalties of$53.1 million from global net sales of RELVAR®/BREO® ELLIPTA®, royalties of$11.9 million from global net sales of ANORO® ELLIPTA® and$14.4 million from global net sales of TRELEGY® ELLIPTA®.1 -
Total operating expenses for the fourth quarter of 2019 were
$2.3 million , compared with$2.6 million in the fourth quarter of 2018. Stock-based compensation for the fourth quarter of 2019 and 2018 was$0.5 million . -
Net cash and cash equivalents, short-term investments and marketable securities totaled
$350.8 million , and royalties receivable from GSK totaled$79.4 million , as ofDecember 31, 2019 .
“Global net sales of RELVAR®/BREO® ELLIPTA® decreased 18% versus the fourth quarter of 2018. U.S. net sales declined 42% as increased pricing discounts in the ICS/LABA sector offset volume growth. Non-U.S. sales increased 11% versus the fourth quarter of 2018, driven by market share gains in certain European markets and continued growth in
“ANORO® ELLIPTA® global net sales declined 2% in the fourth quarter of 2019. U.S. net sales declined 7%, as increased amounts of sales through market segments with higher rebates and reduced channel inventories offset volume growth. Non-U.S. ANORO® ELLIPTA® net sales grew 9% year over year in the quarter. Non-U.S. sales growth was negatively impacted by foreign currency translation; in constant exchange rates (CER), ANORO® ELLIPTA® non-US net sales grew 13%. In addition, TRELEGY® ELLIPTA® global net sales were
Hulme continued, “Despite new generic entrants in the U.S. ICS/LABA class at the beginning of 2019, and the resulting negative impact on BREO® ELLIPTA®’s pricing, Innoviva’s full-year income from operations rose versus 2018, its cash resources increased meaningfully, and its debt levels continued to decline. The company enters 2020 in an advantageous financial and operating position.”
Hulme concluded, “Subsequent to the end of the fourth quarter, and as part of our ongoing efforts to maximize shareholder value, we were excited to announce our pending investment in
Recent Highlights
-
GSK Net Sales:
-
Fourth quarter 2019 net sales of RELVAR®/BREO® ELLIPTA® by GSK were
$354.4 million , down 18% from$431.7 million in the fourth quarter of 2018, with$137.2 million in net sales from the U.S. market and$217.2 million from non-U.S. markets. -
Fourth quarter 2019 net sales of ANORO® ELLIPTA® by GSK were
$182.7 million , down 2% from$186.2 million in the fourth quarter of 2018, with$116.8 million net sales from the U.S. market and$65.9 million from non-U.S. markets. -
Fourth quarter 2019 net sales of TRELEGY® ELLIPTA® by GSK were
$221.4 million , up significantly from$99.0 million in the fourth quarter of 2018, with$162.4 million in net sales from the U.S. market and$59.0 million in net sales from non-U.S. markets.
-
Fourth quarter 2019 net sales of RELVAR®/BREO® ELLIPTA® by GSK were
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Capital Allocation:
-
In
December 2019 , the Company paid off the remaining principal balance of its senior secured term loans. -
On
January 27, 2020 , the Company entered into a securities purchase agreement withArmata Pharmaceuticals, Inc. (NYSE American: ARMP), pursuant to which it will purchase, upon satifisaction of certain closing conditions, approximately$25 million of Armata common stock and warrant securities.
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In
1 For TRELEGY ® ELLIPTA®,
About
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, INC. Condensed Consolidated Statements of Income (in thousands, except per share data) (Unaudited) |
|||||||||||||||
Three Months Ended December 31, |
Year Ended December 31, |
||||||||||||||
|
2019 |
|
|
|
2018 |
|
|
|
2019 |
|
|
|
2018 |
||
Revenue: | |||||||||||||||
Royalty revenue from a related party, net (1) |
$ |
75,971 |
|
$ |
79,858 |
|
$ |
261,016 |
|
$ |
261,004 |
||||
Operating expenses: | |||||||||||||||
General and administrative |
|
2,332 |
|
|
2,638 |
|
|
14,656 |
|
|
14,349 |
||||
General and administrative - cash severance expenses |
|
- |
|
|
- |
|
|
- |
|
|
5,704 |
||||
General and administrative - related party |
|
- |
|
|
- |
|
|
- |
|
|
2,700 |
||||
Total operating expenses |
|
2,332 |
|
|
2,638 |
|
|
14,656 |
|
|
22,753 |
||||
Income from operations |
|
73,639 |
|
|
77,220 |
|
|
246,360 |
|
|
238,251 |
||||
Other expense, net |
|
(223 |
) |
|
(16 |
) |
|
(345 |
) |
|
(5,702) |
||||
Interest income |
|
1,538 |
|
|
519 |
|
|
5,540 |
|
|
1,660 |
||||
Interest expense |
|
(4,689 |
) |
|
(4,581 |
) |
|
(18,660 |
) |
|
(23,954) |
||||
Income before income taxes |
|
70,265 |
|
|
73,142 |
|
|
232,895 |
|
|
210,255 |
||||
Income tax benefit (expense), net |
|
(12,403 |
) |
|
196,073 |
|
|
(41,902 |
) |
|
196,073 |
||||
Net income |
|
57,862 |
|
|
269,215 |
|
|
190,993 |
|
|
406,328 |
||||
Net income attributable to noncontrolling interest |
|
11,913 |
|
|
5,455 |
|
|
33,705 |
|
|
11,272 |
||||
Net income attributable to Innoviva stockholders |
$ |
45,949 |
|
$ |
263,760 |
|
$ |
157,288 |
|
$ |
395,056 |
||||
Basic net income per share attributable to Innoviva stockholders |
$ |
0.45 |
|
$ |
2.61 |
|
$ |
1.55 |
|
$ |
3.92 |
||||
Diluted net income per share attributable to Innoviva stockholders |
$ |
0.42 |
|
$ |
2.34 |
|
$ |
1.43 |
|
$ |
3.53 |
||||
Shares used to compute basic net income per share |
|
101,199 |
|
|
100,979 |
|
|
101,150 |
|
|
100,849 |
||||
Shares used to compute diluted net income per share |
|
113,453 |
|
|
113,299 |
|
|
113,409 |
|
|
113,408 |
||||
(1) Total net revenue is comprised of the following (in thousands): | |||||||
Three Months Ended | Year Ended | ||||||
December 31, | December 31, | ||||||
2019 |
|
2018 |
|
2019 |
|
2018 |
|
(unaudited) | (unaudited) | ||||||
Royalties from a related party |
$ 79,426 |
$ 83,313 |
$ 274,839 |
$ 274,827 |
|||
Amortization of capitalized fees paid to a related party |
(3,455) |
(3,455) |
(13,823) |
(13,823) |
|||
Royalty revenue from a related party, net |
$ 75,971 |
$ 79,858 |
$ 261,016 |
$ 261,004 |
|||
|
||||||
INNOVIVA, INC. Condensed Consolidated Balance Sheets (in thousands) |
||||||
December 31, 2019 |
December 31, 2018 |
|||||
(unaudited) |
|
(1) |
||||
Assets | ||||||
Cash, cash equivalents and marketable securities |
$ |
350,845 |
$ |
114,908 |
|
|
Other current assets |
|
80,389 |
|
84,135 |
|
|
Property and equipment, net |
|
33 |
|
160 |
|
|
Capitalized fees paid to a related party, net |
|
139,076 |
|
152,899 |
|
|
Deferred tax assets |
|
154,171 |
|
196,054 |
|
|
Other assets |
|
312 |
|
37 |
|
|
Total assets |
$ |
724,826 |
$ |
548,193 |
|
|
Liabilities and stockholders’ equity | ||||||
Other current liabilities |
$ |
1,219 |
$ |
1,436 |
|
|
Accrued interest payable |
|
4,152 |
|
4,264 |
|
|
Convertible subordinated notes, net |
|
239,217 |
|
238,664 |
|
|
Convertible senior notes, net |
|
137,903 |
|
130,734 |
|
|
Senior secured term loans, net |
|
- |
|
13,457 |
|
|
Other long-term liabilities |
|
219 |
|
586 |
|
|
Innoviva stockholders’ equity |
|
313,495 |
|
153,583 |
|
|
Noncontrolling interest |
|
28,621 |
|
5,469 |
|
|
Total liabilities and stockholders’ equity |
$ |
724,826 |
$ |
548,193 |
|
|
(1) The selected consolidated balance sheet amounts at December 31, 2018 are derived from audited financial statements. |
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INNOVIVA, INC. Cash Flows Summary (in thousands) |
|||||||
Year Ended December 31, |
|||||||
2019 |
|
|
2018 |
||||
(unaudited) | |||||||
Net cash provided by operating activities |
$ |
257,458 |
|
$ |
223,531 |
||
Net cash provided by (used in) investing activities |
(18,003 |
) |
|
3,519 |
|||
Net cash used in financing activities |
(23,776 |
) |
|
(237,969) |
View source version on businesswire.com: https://www.businesswire.com/news/home/20200205005679/en/
Source:
Investors & Media:
Dan Zacchei / Alex Kovtun
Sloane & Company
212-446-9500
dzacchei@sloanepr.com / akovtun@sloanepr.com