Innoviva Reports Fourth Quarter 2020 Financial Results
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Royalties increased by 18% to
$93.9 million in the fourth quarter of 2020, compared to the same quarter in 2019. -
Invested
$300 million into a fund advised bySarissa Capital Management LP as a part of a strategic partnership designed to enhance returns on our capital and accelerate execution of our strategy. -
Announced an additional investment of
$20 million intoArmata Pharmaceuticals, Inc. (NYSE: ARMP), an anti-infectives leader, inJanuary 2021 .
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Gross royalty revenues of
$93.9 million fromGlaxo Group Limited (“GSK”) for the fourth quarter of 2020 included royalties of$55.9 million from global net sales of RELVAR®/BREO® ELLIPTA®, royalties of$13.1 million from global net sales of ANORO® ELLIPTA® and royalties of$24.9 million from global net sales of TRELEGY® ELLIPTA®.[1] -
Increase in fair values of equity investments of
$11.0 million in the fourth quarter of 2020 was mainly due to higher net valuation of our various investments including common stock and warrants as ofDecember 31, 2020 . -
Income before income taxes increased by 29% to
$90.8 million , compared to the same quarter in 2019. -
Net cash and cash equivalents, short-term investments and marketable securities, excluding
$3.2 million cash balance attributable to a variable interest entity, totaled$243.3 million , and receivables from GSK totaled$93.9 million , as ofDecember 31, 2020 .
Recent Highlights
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GSK Net Sales:
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Fourth quarter 2020 net sales of RELVAR®/BREO® ELLIPTA® by GSK were
$372.8 million , up 5% from$354.4 million in the fourth quarter of 2019, with$141.0 million in net sales from the U.S. market and$231.8 million from non-U.S. markets. -
Fourth quarter 2020 net sales of ANORO® ELLIPTA® by GSK were
$200.9 million , up 10% from$182.7 million in the fourth quarter of 2019, with$119.4 million net sales from the U.S. market and$81.5 million from non-U.S. markets. -
Fourth quarter 2020 net sales of TRELEGY® ELLIPTA® by GSK were
$313.6 million , up 42% from$221.4 million in the fourth quarter of 2019, with$212.9 million in net sales from the U.S. market and$100.7 million in net sales from non-U.S. markets.
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Fourth quarter 2020 net sales of RELVAR®/BREO® ELLIPTA® by GSK were
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Capital Allocation:
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During the fourth quarter of 2020, the Company signed a strategic partnership agreement with
Sarissa Capital Management LP (“Sarissa Capital”) designed to accelerate the execution of our strategy and enhance returns on our capital. As a part of the agreement,Sarissa Capital will assistInnoviva in the development of our acquisition strategy. In addition, the Company’s wholly-owned subsidiary,Innoviva Strategic Partners LLC , became a limited partner ofISP Fund LP (the “Partnership”) and made an initial contribution of$300 million for the purposes of investing in “long-only” securities in the healthcare, pharmaceutical and biotechnology industries. The general partner of the Partnership is an affiliate ofSarissa Capital , which acts as the investment adviser to the Partnership. -
In
January 2021 , the Company entered into an agreement withArmata Pharmaceuticals, Inc. ("Armata"), pursuant to which it will invest, subject to certain closing conditions, additional$20.0 million in 6.2 million shares of Armata common stock and an equal number of warrants with$3.25 strike price in two tranches. At the closing of the first tranche,Innoviva acquired approximately 1.9 million shares of Armata common stock and 1.9 million warrants for an aggregate purchase price of$6.1 million . Upon closing of the second tranche,Innoviva expects to own approximately 60% of Armata’s outstanding stock.
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During the fourth quarter of 2020, the Company signed a strategic partnership agreement with
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.
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Condensed Consolidated Statements of Income |
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(in thousands, except per share data) |
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(Unaudited) |
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Three Months Ended | Year Ended | ||||||
2020 |
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2019 |
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2020 |
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2019 |
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Revenue: | |||||||
Royalty revenue from a related party, net (1) |
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|
|
|
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Revenue from collaborative arrangements with a related party |
- |
- |
10,000 |
- |
|||
Total net revenue |
90,476 |
75,971 |
336,794 |
261,016 |
|||
Operating expenses: | |||||||
Research and development |
219 |
- |
1,788 |
- |
|||
General and administrative |
5,470 |
2,332 |
13,883 |
14,656 |
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Total operating expenses |
5,689 |
2,332 |
15,671 |
14,656 |
|||
Income from operations |
84,787 |
73,639 |
321,123 |
246,360 |
|||
Other expense, net |
(433) |
(223) |
(348) |
(345) |
|||
Interest income |
23 |
1,538 |
1,524 |
5,540 |
|||
Interest expense |
(4,651) |
(4,689) |
(18,331) |
(18,660) |
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Changes in fair values of equity investments |
11,032 |
- |
50,277 |
- |
|||
Income before income taxes |
90,758 |
70,265 |
354,245 |
232,895 |
|||
Income tax expense, net |
15,742 |
12,403 |
60,431 |
41,902 |
|||
Net income |
75,016 |
57,862 |
293,814 |
190,993 |
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Net income attributable to noncontrolling interest |
21,113 |
11,913 |
69,412 |
33,705 |
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Net income attributable to |
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|
|
|
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Basic net income per share attributable to |
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|
|
|
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Diluted net income per share attributable to |
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|
|
|
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Shares used to compute basic net income per share |
101,361 |
101,199 |
101,320 |
101,150 |
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Shares used to compute diluted net income per share |
113,590 |
113,453 |
113,554 |
113,409 |
(1) Total net revenue from a related party is comprised of the following (in thousands):
Three Months Ended | Year Ended | |||||
2020 |
2019 |
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2020 |
|
2019 |
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(unaudited) | (unaudited) | |||||
Royalties from a related party |
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|
|
|
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Amortization of capitalized fees paid to a related party |
(3,455) |
(3,455) |
(13,823) |
(13,823) |
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Royalty revenue from a related party, net |
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|
|
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Condensed Consolidated Balance Sheets | |||
(in thousands) | |||
2020 |
2019 |
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(1) |
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Assets | |||
Cash, cash equivalents and marketable securities |
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|
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Other current assets |
95,571 |
80,389 |
|
Property and equipment, net |
28 |
33 |
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Equity and other long term investments |
438,258 |
- |
|
Capitalized fees paid to a related party, net |
125,253 |
139,076 |
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Deferred tax assets, net |
93,759 |
154,171 |
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Other assets |
214 |
312 |
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Total assets |
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|
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Liabilities and stockholders’ equity | |||
Other current liabilities |
|
|
|
Accrued interest payable |
4,152 |
4,152 |
|
Convertible subordinated notes, net |
239,783 |
239,217 |
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Convertible senior notes, net |
145,734 |
137,903 |
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Other long-term liabilities |
106 |
219 |
|
539,912 |
313,495 |
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Noncontrolling interest |
67,925 |
28,621 |
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Total liabilities and stockholders’ equity |
|
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(1) The selected consolidated balance sheet amounts at
Cash Flows Summary | |||
(in thousands) | |||
Year Ended |
|||
2020 |
2019 |
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(unaudited) | |||
Net cash provided by operating activities |
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|
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Net cash used in investing activities |
(314,937) |
(18,003) |
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Net cash used in financing activities |
(29,785) |
(23,776) |
View source version on businesswire.com: https://www.businesswire.com/news/home/20210203005916/en/
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